Covenant Logistics Group, Inc. (NASDAQ:CVLG) Q3 2023 Earnings Call Transcript

Paul Bunn: Hi, Scott. This is Paul. You know, here’s what I think. As you know, a lot of the bids are come out early in the year and, and so I’d tell you what we’re thinking. Expedited is probably flattish to maybe down 1% or 2% and Dedicated, we think, is probably flattish, because 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 next year. And so 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. So we’re — you can kind of say, we’re kind of in the flattish world. Because, you know, a lot of the folks we talked to, I mean, it’s costs keep going up, small guys keep going out of business and then this thing – it’s getting to a point where folks are going to do this for practice, whether it’s small carriers that are, you know, keeping rights depressed through brokerages or large carriers.

Most people are kind of at the place where they are — they are where they are.

Scott Group: Makes sense. And so in an environment where rates are flat to 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?

Paul Bunn: Yes. 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, what — how is this — 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 yes, we think that we can have some incremental earnings growth in ’24 of ’23. Nothing significant next year. But as soon as we’re talking about with Mike coming to go, as soon as things pop, I think it’s going to — you’ll see a more material amount of earnings growth. And so that’s kind of the way we’re modeling it out right now.

Scott Group: Okay. Makes sense. Thank you guys for the time. Appreciate it.

Paul Bunn: Thank you.

Operator: And at this time, there are no further questions. I’d like to turn the call back over to Tripp for closing remarks.

Tripp Grant: Yes. We 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.

Operator: This concludes today’s conference call. Thank you for attending.