Forward Air Q4 2008 Earnings Call Transcript

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2009-02-10 12:23:15.0

Tags: Revenue, Call Transcript, Quarter, Yield, Earnings, Rodney, Supply Chain, Operational Accounting, Business Operations, Finance, Seeking Alpha, Forward Air Corp.

Question-and-Answer Session

Operator: Thank you. (Operator Instructions). Thus your first question is from the line of Todd Fowler with KeyBanc Capital Markets. Please proceed.

Todd Fowler - KeyBanc Capital Markets

Hey, good morning Bruce. Good morning, Rodney.

Bruce Campbell

Good morning.

Rodney Bell

Hey, Todd.

Todd Fowler - KeyBanc Capital Markets

Bruce or Rodney, could you go back over on the yield trends during the quarter and just talk a little bit about where yield ended up at the end of the quarter and then the impact of the fuel comparisons going into the first quarter of this year?

Bruce Campbell

The yield basically was negative throughout the year, primarily driven by our entry into shorter haul business. And so it was anticipated from that standpoint. The quick and dirty of current yield is that we have seen it stabilized. We are happy to see it stabilized. Part of that was again driven by, we are now into a normal comp since we began the short haul operation a year ago. So to this point, our yield is holding, we are happy with that; and hopefully it will continue through the quarter.

And Rodney, you want to...

Rodney Bell

Yeah. Last week, for instance, Todd, the yield was down... peer yield was down 0.3%, so we think it's flattened out with the lapsing of that short haul business we talked about. Now the impact of fuel going into as you recall, we started fuel, the cost of diesel started ramping up in the first quarter last year. I am not sure exactly when it hits peek in Q2 or early Q3 and then start to back down. So we'll have that headwind to negotiate. But really guessing what field is going to do is we don't know.

Todd Fowler - KeyBanc Capital Markets

Okay, no, that's very helpful, that's perfect. And then I guess, talking little bit about the logistics revenue here in the quarter, I guess, I was surprised to see it up nearly 40%. It sounds like during the prepared comments, there was some integral effort to do some network balancing.

Can you talk a little bit about specifically what you are doing there? And then also what's the driver for the net revenue margin for logistics segment was revenue was up by where they are. Net revenue margin was a little bit lower than what we would have expected. So maybe a little bit about the dynamics that are going on with that mix.

 

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