Welcome to today's Covenant Logistics Group third quarter earnings release conference call. Our host for today's call is Tripp Grant. At this time, all participants will be in a listen-only mode, where we will conduct a question-and-answer session. I would now like to turn the call over to your host. Tripp, you may begin. Thanks, Ross. Good morning, everyone, and welcome to the Covenant Logistics Group third quarter 2023 conference call. As a reminder, this call will contain forward-looking statements under the Private Securities Litigation Reform Act, which are subject to risks and uncertainties that could cause actual results to differ materially. Please review our SEC filings and most recent risk factors. We undertake no obligation to publicly update or revise any forward-looking statements. A copy of the proposed comments and additional financial information is available on our website at www.covenantlogistics.com/investors. I'm joined on the call today by Paul-- David Parker and Paul Bunn. We are pleased with our third quarter's results, which benefited from the full quarter effect of the Lew Thompson & Son Trucking the second quarter reflected in our dedicated segment. In addition, our expedited segment benefited incrementally from the increase in demand for team driver freight as a result of the closure of Yellow. However, more broadly, the overall freight environment remained challenging, with few signs of immediate macroeconomic improvement. Compared to a year ago, consolidated freight revenue was down 5%. The decline is primarily attributable to the combination of little to no overflow freight handled by our Managed Freight segment and a lower tractor count in our Dedicated segment. The reduction of tractors assigned to dedicated resulted from exiting underperforming legacy contracts, partially offset by acquiring Lew Thompson & Son. The result was higher earnings on fewer trucks. Adjusted operating income declined approximately $4.6 million, or 20% compared to the prior year quarter, primarily as a result of our Managed Freight segment, which declined by approximately $4.7 million. Adjusted net income decreased 32% to $15.3 million, and adjusted earnings per share decreased 26% to $1.13 per share compared to the year-ago quarter. Weighted average diluted shares decreased as a result of our share repurchase program. Key highlights include freight revenue for the quarter was the highest for any quarter of the year, surpassing the second quarter by 4%. The Lew Thompson & Son Trucking operation continued to perform well with our first new poultry-related customer start-up in late September and a strong pipeline of additional bids. The average age of our fleet at September 30th, 2023 improved to 23 months, compared to 29 months in the prior year, and 26 months at June 30th, 2023. Within our Combined Truckload segment, compared to the prior year, operations and maintenance-related expenses declined by $0.06, or 21%. Equipment costs, including leased revenue equipment, expenses, depreciation, and gains on sale, remained flat on a total cents per mile basis. Gain on sale of revenue equipment was [audio distortion] in the quarter, compared to $0.2 million in the prior year. Our TEL leasing company investment produced $0.28 per diluted share, compared to $0.38 per diluted share versus a year ago period. Our net indebtedness as of September 30th, 2023 was $183.4 million, yielding a leverage ratio of approximately 1.7x and a debt-to-equity ratio of 31.8%. On an adjusted basis, return on invested capital was 10.6% for the current quarter versus 17.5% in the prior year. Now Paul will provide a little more color on the items affecting the individual business segments. Thanks, Tripp. The performance of Expedited during the third quarter provided for a 9.7 adjusted OR in the midst of a historically weak freight environment. We believe this says a lot about the work we have done to deploy assets with the right customers to lower our cost per mile, improve our utilization, and focus on what we can control. In the context of an 8% decline in revenue per mile, we believe a 12% improvement in utilization and a lower cost per mile are significant accomplishments. The improvement in utilization was principally attributable to newer equipment in the fleet and reduced downtime, which we will look to continue as year-over-year freight revenue per total mile compressions are expected to continue and be challenging for the remainder of 2023 and into 2024. Dedicated reflected another success story centered around our disciplined approach to capital allocation. Dedicated improved its adjusted operating ratio to approximately 93.6 by effectively weeding and feeding. We reduced the overall size of the fleet by 170 trucks, while nearly doubling adjusted operating income. Trading out approximately 400 legacy contract units for Lew Thompson & Son aligns with our strategy of exiting unprofitable or underperforming business and replacing it when opportunities arise that meet our profitability and return requirements. We are pleased with the year-over-year improvement to adjusted margin and expect this to continue to improve upon both the segment size and profitability over the long term. Managed Freight experienced an 11% reduction in total freight revenue and a 57% reduction of consolidated adjusted operating profit. This significant reduction in revenue and operating profit was primarily the product of little to no high-margin overflow freight from our asset-based truckload segments in the 2024 quarter, 2023 quarter. The brokerage environment remains highly competitive, with numerous brokers aggressively competing for volumes at the expense of profit or margin. We anticipate continued margin pressure in this environment. Our Warehouse segment saw a 15% increase in revenue and an 82% increase in adjusted operating profit compared to the prior year. The top line growth is a result of new customer startups over the last 12 months, and the operating profit improvement was a result of the combination of new customer business and improved rates for existing customers. Although we are pleased with the improved profitability within this segment, we will continue to focus on improving profitability more through improved labor utilization and rate increases with existing customers. Our minority investment in TEL contributed pre-tax net income of $5.3 million for the quarter, compared to $7.4 million in the prior year period. The decline was largely the result of reduced gains on sale of used equipment compared to a year ago. TEL's revenue in the quarter declined 8% and pre-tax net income decreased by 28% versus the third quarter of 2022. TEL increased its truck fleet in the quarter versus a year ago, by 42 trucks to 2,195, and grew its trailer fleet by 100 to 7,013. Due to its business model, gains and losses on the sale of equipment are the normal part of business for TEL and can cause earnings to fluctuate from quarter to quarter. Our investment in TEL is included in other assets in our consolidated balance sheet and has grown to $61.6 million as of September 30th, 2023, from $4.9 million back in 2011. In 2022, we received $14.7 million in cash dividends from TEL, and year- to- date, we received $9.8 million in dividends in the third quarter of 2023. For the fourth quarter, we expect our revenue and earnings to experience a modest decline sequentially due to cyber attacks on a major customer and the ongoing United Auto Workers strike, which has temporarily depressed load volumes and revenue per truck in our Expedited and Dedicated divisions. More broadly, however, we are optimistic that the trough of the freight cycle is behind us, but remain cautious about the rate at which we'll see improvements. For 2024, we believe that the first half of the year may continue to be challenging, and expect capacity to continue exiting the market. Although we're eager for the freight environment to improve, our primary focus remains on the long term, by continuing to invest in areas that provide opportunities for us to make forward progress on our strategic plan, by exiting underperforming capital tied to underperforming customers, and investing capital in business units and customers to provide adequate returns, improving our safety culture and investing in our people. Thank you for your time, and we will now open up the call for questions. If you would like to ask a question, please press star one on your telephone keypad now, and you'll be placed into the queue in the order received. Please be prepared to ask your question when prompted. Once again, if you would like to ask a question, please press star one on your phone now. Our first question comes from Jason Seidl from TD Cowen. Please go ahead, Jason. Thank you, operator. Good morning, gentlemen. Appreciate you guys taking my question. Could you talk a little bit about the experience with Lew Thompson? Seems to be going pretty well. I know initially when you guys bought them, sort of the theory was that you could really start helping them grow. Maybe sort of how should we expect that into 2024 and beyond? And then maybe can you expand upon sort of uses of cash going forward? You've done a pretty good job of dispersing it between timely acquisitions and also the buyback. Yeah, yeah, Jason, this is Tripp. I'll be happy to talk about Lew Thompson first. You know, when we first got Lew Thompson, in April of this year, they were about a 225-truck fleet, because some of those trucks are shuttle trucks. But, had a really, really good business, liked it, good culture, good fit, fit with exactly, you know, what we were looking for in our strategic plan. And one of the silver linings behind that, which is one of the silver linings that we look for with any acquisition, is the opportunity to grow. And if you look back at Lew Thompson and how they've operated in the past, they've really been confined to one, you know, smaller region and, kind of call it Northwest Arkansas. One of the things that we've brought to them in terms of growth potential is something they've never had before. Certainly, the family had the capital to grow, but, you know, getting outside of that wheelhouse of their region is something that they have not done before, and that's something that we've experienced starting to experiment with and see success with. Evidence being in September this year, our first startup in Tennessee, with a 20-truck fleet. I could see more substantial growth outside of the Northwest Arkansas or Tennessee wheelhouse, step up in the next year. But because of the, you know, there's a couple of nuances with Lew Thompson that we've got to make sure that we're not, as we grow this business, that don't suffer. One, it's service, and we have to maintain that gold level of service that Lew Thompson maintains. And so we're very careful about the growth and making sure that we're not sacrificing legacy business or new business by just trying to grow for the sake of growth. Two is, you know, capital, making sure that we can acquire the capital, that we can grow with because they do. One of the reasons why we like them is because of their unique environments, whether they're new, spectrum, you know, it sets us apart a little bit. So capital is a big hurdle, but I do think that, there is lots of opportunity. I'd be hesitant to kind of give numbers right now because we've got a lot of things in the pipeline. But that is a big, kind of just call it feather in our cap next year with just the opportunities that I believe that we have with Lew Thompson over the next, you know, call it and beyond. Jason, to add on, this is what Tripp said, there is Lew Thompson each and every year for the foreseeable future. But the exact pace of that growth, I agree, you know, it's, you know, getting the right equipment and, you know, we're some customer, there's a lot of stuff in the pipeline, [audio distortion] business growth. Going back to your original questions on use of cash, and here's what I can say, that, you know, if we can grow Lew Thompson, there will be some opportunities for some growth CapEx involved next year. And I can't really comment on, you know, future capital allocation plans or decisions that have been made, but what I can do is kind of talk about just in strategy. But giving you a glimpse of what we've done since January 1st, 2022, we've repurchased $110 million of stock, paid $10 million of dividends, had three very accretive acquisitions for $156 million. So paid out a total of $275 million that are moving the business forward and moving the valuation forward. You know, in turn, we've had to sell capital. We've had to sell underperforming capital, two terminals that weren't producing a return on investment. And, you know, certainly, you know, you guys have seen the truck counts come down over the previous quarters. We're selling off underperforming capital to help finance these things that are producing above market, you know, the cap. The secret sauce is doing more in the past, but without getting into any more specifics about, you know, our specific plans about the next 12 months. No, but listen, that, that makes sense. And, and one question, one more question, I'll turn it over to some other people here. So, you know, we hear a lot on the dry van side about sort of where we are with sort of the destocking. It seems like that's largely over. When do you think the sort of restocking will take place? What are your customers telling you about sort of what to expect in the coming quarters? You know, Jason, I agree with you. I think the destock is nothing, and I think we're probably... hopefully, in the next six months, we would believe we have to get in some sort of more normalized restocking pattern. You know, if fuel prices stay high, hopefully capacity continues to exit the market and, you know, about six to nine months, we can get this thing back in balance a little bit. I'll keep my fingers crossed for you guys. Appreciate the time, as always, gentlemen. Thank you, Jason. Our next question comes from Scott Group, from Wolfe Research. Please go ahead, Scott. Oh, looks like Scott actually went out of the queue, so our next question comes from Jack Atkins from Stephens. Please go ahead, Jack. Hello, Jack, are you on mute? I'm here. Sorry about that. Yeah, can you hear me now, guys? Yes, sir. Okay. Sorry about that. And, thanks for taking my question. Good morning. So I guess, maybe just a couple of follow-up questions here. I'd love to maybe go back, Paul, to your comments and prepared remarks about, you know, the trough for the cycle is behind us, and I know you maybe touched on it a bit in that last answer to Jason's question, but I mean, what's kind of driving that confidence? Is it maybe you're just seeing capacity exit? Is it a function of maybe the comments around inventory destocking? Well, what's giving you confidence we're beyond the trough of the cycle, or maybe we've seen the trough? Yeah, I think we're probably in it too, to have seen it, Jack, and I think some of it's the inventory destocking. I mean, you know, a lot of the... You're seeing a lot of these brokers bid stuff at these crazy low rates, and then two weeks later, a month later, you turn around and the same freight's back on the market because they can't get carriers to service it. And, you know, your fee, you know, in addition to small fleets, be challenged and the capacity exiting there, you're starting to see some capacity exit in the broker space, where this whole notion of buying business and just trying to grow revenue for the sake of growing and taking losses on it, I think people are seeing that model doesn't work. So, you know, I do believe that over time, and again, over the next six to nine months, all that'll continue to shake out. I mean, you're coming up on people having to buy tags and pay for their annual insurance, and with all the geopolitical things, if fuel goes up, we're gonna get to a breaking point here before long, where, you know, folks can't run stuff and lose cash in perpetuity. Yeah. No, that, that makes sense. I just wanted to kind of get you to, to flesh it out a bit. So just, you know, a couple other questions for—handed over, but, you know, when we think about the fourth, some related to either the auto strike, the, the cyberattack at a customer, you know, before your fourth quarter all absent, but we expected maybe, you know, results to be flat or maybe improve sequentially from an earnings perspective? Jack, I would tell you, absent those, we probably would have been around flattish quarter-over-quarter. Okay. You know, there's less work days in Q4 with all the holidays, and there's really not quite much in the peak anymore. There's not much peak out there. And so, you know, I would have told you we would have probably been flattish. And, you know, like we said, I think we'll be down sequentially, but I think it'll be a nice for. Okay. It's not gonna fall out from under [audio distortion] Right. Yeah. Yeah. Okay, that makes sense. I guess maybe kind of shifting gears to one other topic, and that's my Dedicated operations. You know, margins could include the additional Lew Thompson. But could you maybe... You know, I know it's been through a long strategic focus to improve the quality of the core Dedicated business. But could you maybe talk about you're making there in terms of the organic Dedicated operations? Yeah. Yeah, we talked a little bit in Indigo, about Lew Thompson, and so I think you'll see that truck grow next year. I think we're probably 90% the lead in. And so, you know, Dedicated has been hard to grow environment with the one-way load market being as low as it is. I would say our pipeline is really robust, but you know, folks are reluctant to pull whatever in the one-way world. But I think you'll see a lot of that capacity come back into dedicated when rates start heading north. I think you'll see a lot of Dedicated contracts start getting signed. And so, again, just to summarize that, I think we're through the majority of the weed and feed. There's only, I would say, you know, 10% of the business we're probably still not happy with. I think you're gonna see Lew Thompson grow, and we've got a strong pipeline with the non-poultry Dedicated. It is just, you know, when one-way truckload rates start moving the other direction, some folks, I think, start locking in on some work we've been working on for the last year. Okay. All right. Yeah, I'm gonna hand it over to you. Good time. Thank you. Our next question comes from Michael Vermut, Newland Capital. Go ahead, Michael. Hey, guys. How you doing? Hi, Mike. It's been an amazing turn at the company to be putting up these kind of numbers at a trough environment. Two quick things. When you're looking on the acquisition front, and you know if there are what you know what I mean looks like now, are there more potential sellers coming to the market and the verticals that you're focusing on? Yeah, a couple things. We continue to look in the market, Mike, for niche-y, you know, above average return acquisitions that we think we can grow. That's the answer to the first question. As far as... there are some of those in the market right now. And so we just continue to look and see what might be a fit, and that kind of answers the second part of your question. We see something great within one of the areas of the company, you know, be it Expedited or Dedicated or Managed Trans or Warehousing. And so we're just gonna... Tripp said it early on, we're gonna continue down that path of capital deployment, that if investing in growth, CapEx is the best return, that's what we're gonna do. If it's buying shares back, that's what we'll do. If the right acquisition with the right profile comes along, that's what we'll do. And so I think Tripp laid it out really good earlier. We're just gonna kind of keep working down that path because it has really turned around the way we operate the business and the results. And you can see it was evident from where we were to where we're at. So we're probably just keep doing more of the same. Yeah. I think, Mike, the key to that is being really disciplined with our approach. I mean, we get a lot of, you know, CIM decks of those, maybe 2% of them, we look at them for a day and talk about them and then turn them down. You know, we've been real fortunate, at least with the last three, that have just come up. I think that, you know, we've talked about it internally, when folks publicly know what we're after and what we're looking for and what we're interested in, we're getting to see more volumes of those. We're gonna continue to be disciplined in our allocation approach, capital allocation approach as it comes to M&A. But if the uptick has been really helpful or has really picked up, a lot of which is because we've been public about, you know, what we're trying to do. Got it. Next question, I guess this maybe is for David or, I don't know. Yeah, phenomenal job changing the company between the volatility and, valuation, pretty much where it was five years, under 10x, 9x. The group trades closer to 20. So, you know, there's nothing really comparable we have through this cycle. Is there a point where you think about taking the company private or doing something, you know, internally with management? Hey, Mike, it's David. Hey, number one, I got your same sentiments. Yes. You know, I don't disagree with anything you just said there. Of course, we can't, we can't talk about going private or anything like that, but that's why we got a board. We got a board to talk about all the issues that are there, and we're busting our butts. And as I said, two or three years ago, when we started down this road of where we should be at in the Wall Street, bought back 25% of the company, and we're doing a great job. This team is doing unbelievable. I could not be any more excited about what the group is doing and, you know, just, they're doing great. And I think that Wall Street will reward us. I think one day that it will wake up and say, "They are doing well," and we will get rewarded. But again, we bought back 25% of the company. Somebody's gonna love us, determine who's gonna love us. Excellent. And then one, one other thing. When, when we look at, you know, let's say we're, we're near the trough here, and we're doing, you know, $4-$4.50 at trough earnings. When we look at what was added in here, layered in the acquisitions, what's on the table here, is there any reason to think we won't be getting back up to the $5.50-$6.50 as we approach another peak? You know, is the earnings stronger at the company now than it was? Without a doubt. Without a doubt. But, you know, we're working on five-year strategy. Of course, you know, five-year strategy, as we all know, is we love our strategic planning and looking out the next five years, 'cause we've been doing this for about a solid three years during this time that you've seen us do what we've, you know, what we have achieved has been a great strategic plan. And then we got five-year plans, and again, those can change in a year depending upon, you know, the conditions out there. But hey, in this... I couldn't be any more happier. The numbers are—we are gonna get back to when things turn around, we're gonna shoot off very nicely. There's no doubt in my mind that we've got the company positioned to have outstanding, an outstanding future. Again, I couldn't be more proud of where we're at during a probably the most difficult environment. I mean, we could compare it to 2008, 2009, and we all could say that it may even be worse than 2008 or 2009, because to be honest with you, I'll never forget, October of 2008, ISM was at 38, and by June, July next, the following year, about eight months later, we were showing extremely nice, positive internal numbers on utilization and revenue and, you know, those kind of things. And none of us in the industry are seeing that in this environment today. And nobody knows it. And performing the way we're performing, I say hallelujah. Yeah, for sure. Look, there's no company that I can find right now in this environment that's performing as well as we are. So, you know, you said it five years ago, and the company is a completely different company now. So, you know, great job, guys. Hey, thank you, Mike. Thanks, Mike. Our next question comes from Scott Group for Wolfe Research. Please go ahead, Scott. Hey, thanks. Good morning. Sorry about that earlier. I was just wondering, as we get to 2024 bid season, how are you thinking about expediter rates, dedicated rates? Do you think rates can start moving up next year, or do you think there's some further downside risk to rates? What's your approach early on to bid season? Hey, Scott, this is Paul. You know, here's what I think. As you know, a lot of the bids come out early in the year, and I tell you what we're thinking. Expedited is probably flattish to maybe down 1% or 2%. Dedicated, we think, is probably flattish, 'cause a lot of that gets done early in the year. I think on the Managed Trans side, you know, a lot of that's more in the spot market, so I think they'll get the benefit of things as the year goes along, Nick. I think there will be some rate opportunity by this time next year, but I think there won't be in the early part of the year. We're... You could kind of say we're kind of in the flattish world. Because, you know, a lot of the folks we talk to, I mean, it's costs keep going up, small guys keep going out of business. I mean, this thing will... It's getting to a point where folks aren't gonna do this for practice, whether it's small carriers that are, you know, keeping rates depressed through brokerages or large carriers. Most people are kind of at the place where they're they are where they are. Makes sense. And so in an environment where rates are flat, maybe down slightly, you said, we saw some cost inflation, are we confident about the ability to sort of grow earnings from this low $4 level next year? Yeah, I think we think we can incrementally grow earnings next year. I mean, I think there's a few, you know, key things. You know, what does our maintenance cost do? What does our insurance cost do? You know, how does some of this pipeline that we were talking about a minute ago, you know, when does that come on board, and how quick does it get to the, you know, kind of modeled profitability level? But yeah, we think that we can have some incremental earnings growth in 2024 off 2023. Nothing significant next year, but as soon as we're talking about with Mike a minute ago, as soon as things pop, I think it's gonna you, you'll see a more material amount of earnings growth. That's kind of the way we're modeling it out now. Okay. Makes sense. Thank you, guys, for the time. Appreciate it. Thank you. At this time, there are no further questions. I'd like to turn the call back over to Tripp for closing remarks. Yeah. We'd just like to thank everybody for your participation today and, wish everybody a good rest of the week and a good weekend, and, we'll talk to you next quarter. Thank you very much. This concludes today's conference call. Thank you for attending.