Good afternoon. My name is Tracy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Knight Transportation First Quarter 2015 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. [Operator Instructions]. Thank you. Speakers for today’s call will be Dave Jackson, President and CEO; and Adam Miller, CFO. Mr. Miller, the meeting is now yours.

Thank you, Tracy. Good afternoon everyone and thank you to those who have joined the call. We have slides to accompany this call posted on our website at investors.knighttrans.com/events. So if you had a chance to download those. Our call is scheduled to go until 5:30 PM Eastern Time. Following our commentary, we hope to answer as many questions as time will allow. If we’re not able to get to your question due to time restrictions, you may call (602) 606-6315 following the call, and we will return your call. Again, that number is (602) 606-6315. The rules for questions remain the same in the past. One question per participant and if we did not clearly answer the question a follow-up question may be asked. More often than not, we end up with people in the queue that are not able to ask a question. So again we ask that we keep it to one question per participant. To begin, I’ll first refer you to the disclosure on Page 2 of the presentation and I’ll also read the following. This conference call and presentation may contain forward-looking statements made by the company that involve risks, assumptions and uncertainties that are difficult to predict. Investors are directed to the information contained in Item 1A, Risk Factors, or Part 1 of the company’s annual report on Form 10-K filed with the United States SEC for a discussion of the risks that may affect the company’s future operating results. Actual results may differ. Now I'll begin by covering some of the numbers in detail, including a brief recap of the first quarter results starting with Slide 3. For the first quarter of 2015, we earned $0.36 per diluted share versus $0.23 from the previous year. Net income increased 55.1% year-over-year to $29.6 million…

Thanks, Adam. Good afternoon everybody. Now to Slide 8, in the first quarter our asset-based trucking businesses operated at 79.2% operating ratio which represents our fourth consecutive trucking OR in the 70s. We continue to see positive results from tight capacity, improved market demand and our internal initiative centered around improving yield, increasing productivity and managing our cost per mile. Our non-asset based logistics businesses again experienced significant revenue and income growth year-over-year during the quarter with 25.7% revenue growth and 95.3% operating income growth. It’s important to point out that our brokerage business, which is the largest piece of our logistics segment, grew revenues at 46.4% despite declining fuel prices which had a negative top line impact. Load volumes in brokerage increased 53% on a year-over-year basis. In terms of profitability, our logistics segment operated at a 92.4% operating ratio. Our logistics performance continues to confirm the opportunities for growth as well as the value provided to our customers through our offering of brokerage and intermodal services in addition to the asset based services. Next on to Slide 9. Each of our business segments is designed in a way to yield double-digit returns on invested capital. These current businesses include dry van truck load, refrigerated truck load, port and rail, truck load drayage, various forms of dedicated brokering freight using subcarriers and intermodal services. There will be additional services to come in the future. We avoid deploying capital into areas that we do not believe will yield returns that will more than exceed our weighted average cost of capital. However, this is not the only requirement. We also want to see a pathway for long term revenue growth and incremental ROIC improvement. In each of our businesses they’re built with the culture measurements, people and strategy that we believe…

Thanks, Dave. Slide 13 is the final slide where we discuss our guidance. Based on the favorable truck load market and recent trends we are updating our previously announced second quarter 2015 guidance of $0.34 to $0.37 per diluted share to $0.35 to $0.38 per diluted share. We are establishing our expected range for the third quarter of 2015 which is $033 to $0.36. We’re also updating our full year 2015 guidance from $1.37 to $1.41 per diluted share to $1.41 to $1.49 per diluted share. Some of the assumptions made by the management will include growing our tractor fleet, as Dave mentioned, 16% to 17% from where we ended 2014, we would expect the growth to develop consistent throughout the year. I’m sorry, when I say 16% to 17% that’s the average tractors we had for 2014 versus what the average tractor count would be for 2015. We expect rates to continue to improve year-over-year in that 4% to 5% range; when we talk about rates we’re referring to total rate per mile so factoring in the impact from empty miles. And then we expect to run similar miles per tractor as we did last year and they continue to grow our logistics segments in that 25% plus range while operating with a low to mid 90s operating ratio. And for the remainder of 2015, our guidance is conservative with regard to fuel as we do not expect to see the same benefit of declining fuel price we experienced in the fourth quarter of 2014 as well as in the first quarter of 2015, and we do expect driver wages and hiring related costs will continue to be inflationary. We also expect second quarter gain on sales to be relatively similar to last year; however, third quarter may be modestly lower. And as far as our tax rate, we expect that to normalize in 2015 in the kind of a mid 39% percent range excluding any unusual items that may occur. So these estimates represent management’s best estimates based on the current information available. Again, actual results may differ materially from these estimates; again we would refer you to the risk factor section of the company’s annual report for discussion of the risk that may affect results. So this concludes our prepared remarks. We would like to remind you that this call will end at 5:30 Eastern Time. We will answer as many questions as time will allow. Again, please keep it to one question. If we’re not able to get to your question due to time constraints please call (602) 606-6315 and we’ll do our best to follow up promptly. Tracy, we will now entertain questions.

[Operator Instructions]. Your first question is from John Byrne, if you could please state your company name; your line is now open.

RBC Capital Markets. Thanks guys for taking my question. Just talk a little bit about the progression of the freight environment in the quarter and maybe what you’ve seen into April and specifically have you noticed any weakness even geographically or by customer vertical that you serve?

Yes, I think it was a good quarter. The January, February timeframe we were off to a pretty good start, we felt pretty good. Fuel obviously helped us from the earnings side, but the demand felt okay and I think we felt March ended off strong from a demand perspective. We didn’t -- all that being said, trying to compare that to last year where we had a first quarter that had an unprecedented amount of kind of spot demand, if you will, it didn’t compare in those respects of course, it seemed a little bit more orderly, but as far as first quarters go one of the best first quarters we've ever seen from just consistent freight demand perspective. I think what we've seen happen is customers have done a good job at securing commitments probably over the last 12 to 14 months to avoid and prevent being in maybe the position that some of them found themselves in last year in the first quarter with weather and challenges on the rail. And so I think for that matter we saw it more efficient proportionally we've seen good progress on the contractual rate side. I think if we fast forward look into April, we've got a little more than half way through. I would say freight demand continues to be good. We would expect to see a ramp up as we get a little bit more into their seasonal time of things which typically by middle of May we start to see the effects of the warm weather driving more beverage and then produce give or take a week is starting to hit to pull capacity away from the things that are more of a staple nature and more consistent and that we see 12 months out of the year, so. So the outlook continues to be good positive, and strong, and did I answer your question, John?

Yes, that was really good. Thanks for the color. And then you brought it up, the contractual rates hike, can you just comment a little bit on kind of the success you had in the quarter, have you seen any weakness in pricing at all?

Well, I think if we talk about pricing in general, pricing has remained strong I would say everywhere on a year-over-year basis pricing is strong. Now this whole idea of a spot market I think that there is more attention to it today because there is websites that track that that didn’t use to exist, and so I think if we’re just trying to judge a freight market on one little data point like that I think we might come to the wrong conclusion. I think if you look at us in particularly, maybe I’ll go a little deeper than what your question is, because if you don’t ask it the next guy will so. I think that to try and look at us in particular and say okay we’re a 75% committed, 25% spot would probably be an over simplification of things. The truth is the regular route freight market is a living breathing dynamic machine and I think the best way to kind of understand at least how we’re positioned would be first that we’re close to the market on a daily basis, we’re in tune with where the opportunities are, where things are hot, where we need more loads in addition to being in tune with what that corresponding pricing is. Then second of all our business has the flexibility or agility to transfer that information immediately in real time and do something with it in order to make day-to-day decisions that can enhance the revenue production on our trucks or the loads that get hauled by a third party carrier. And so this allows us to have more exposure when we want it, but frankly that whole world is so much more complex than a more, the more static view and straight forward view that happens…

Thanks, that was great color. And I agree with you, there seems to be an obsession with spot rates these days unlike anything I’ve seen before, so thanks for that color. I appreciate your time today.

Your next question comes from the line of Bill Greene with Morgan Stanley. Your line is now open.

Hi there, good afternoon.

Hi.

Dave, I wanted to ask you about inventories at your customers do you have a sense for how they are running because as you know we’ve seen some weak consumer spending data and I’m just curious if you have insights into that based on your customer base?

Bill, I wish we did. We don’t have great - a great visibility into that, and as you know even our biggest customer where really we do a fraction of what that customer even does. So, we don’t - we don’t have the best visibility into that. I would tell you that they - that our customers are highly focused on efficiency. So my sense is that those inventories may not be very deep and that’s more anecdotally driven than anything else. But when I look at how many of our customers want to touch the load just one time. So we would come to a distribution center and they want to be in a position where they can unload it and immediately move that freight and, for example, we have an inbound of one product and they want to go take that product across three or four trailers into their stores and they want to pull it off and load those other trailers all at the same time, that speaks to a fairly high level of efficiency from an inventory perspective and I think what that means for us in the trucking world a little bit at least speaking to that efficiency at the dock is customers want trailers, they want trailer pools, they want - because in order to do something like that they need to have some trailers sitting there, they need us to bring in, unload it and drop it and take it empty and they take some time and based on their schedule, they unloaded so they can line everything up optimally, which it takes assets; you got to be -- you got be a truck line to do that, you got to have trucks and you got to have trailers as opposed to a live unload world that you would be left to if you are purely a non-asset player. So, that’s about as big as my window in inventories for customers, sorry Bill, I don’t have more for you.

No worries, no, no, that’s fair enough. Dave, you’ve also made a comment on the drivers and you hope to get them more wage increases or perhaps that was Adam but do you have a sense for what that inflation rate should be this year or would be based on your model?

Well, we – it’s interactive obviously because we have competitors that are also doing the same thing since so we’re all kind of moving based on what we’re getting in rate and what - where the market is with drivers. And so we have consistently been between that 7% and 10% range now for more than a year, almost probably better than a year and half. And so that seems to be kind of the pace - a steady pace for us. I would say right now in the first quarter our driver wages were up about 8% year-over-year and if we’re to go to a year ago they were up somewhere in that same neighborhood. So, over a two-year period and that’s pretty good inflation but that pace we probably see that pace continuing throughout the year.

We instituted an increase in the back half of the first quarter which we’ll start to see some of that in the second quarter which again only to what Dave said about continuing inflation in that line item.

Okay. Thank you, David, I appreciate it.

Your next question comes from the line of Brad Delco from Stephens, Inc. Your line is now open.

Dave, the question I had related to your comments talking about sort of the diversity of your model. I don’t know if I want to read in too much this comment but you basically said you will be looking to add some additional services. Can you expand on that at all or kind of what sort of things you are sort of looking at growing that are outside the scope of what you do today?

I probably won’t go into the tremendous detail but what we’re finding is that our customers have logistics needs and we know how to help them, and we have many of the resources and tools already to help them. And so in that logistics space there’s probably more we can do. And so the thing about us, Brad, and I think you know this but we like to kind of work on it and get it rolling and going and then tell you about that after we’re kind of down the highway a little bit. So we I would say that we gradually been heading in this direction just as we got more involved in the non-asset play, our dedicated services offering has gotten -- has expanded from maybe the more traditional pure truck load, we’ve kind of expanded and something so little bit different in that space. And so there’s a natural migration for us to get involved and just and perhaps more sophisticated soup to nuts logistics as we relate transportation for many of our customers. We’ve got hundreds and hundreds of customers nearly a thousand active customers today. And so once you get past about the biggest 75 or 100, they get very small and a lot of those, there is a lot of need there and I think we've seen some of the non-asset based players get involved in some of those areas as well and what we're finding is with a little bit of technology, with our knowledge and understanding, and our ability to provide capacity both owned and purchased through brokerage there is just a lot. We’re not -- we haven't fully tapped into the capabilities and network that we've created.

Got you. Well I respect your request and leave it at one but thanks guys for the time.

Hey, thank you, Brad. Appreciate that.

Your next question comes from the line of Chris Wetherbee with Citi. Your line is now open.

Just a little bit about the guidance and sort of doing the math here it feels like maybe it's a little bit conservative outlook or implied outlook for the fourth quarter. Just in terms of sort of the paper business is there actually a reason that I think that it should be sort of flattish as we get into the back half of the year, I know you mentioned fuel but I just want to get a rough estimate about how you guys should think about capacity and growth?

Yes. So we're looking specifically at fourth quarter. For one we're lapping our acquisition with Barr-Nunn in that quarter. As well as fuel, we saw I think we quoted on our conference call last quarter that fuel was a benefit of about $0.02 to $0.03 that we're just not, we're just not expecting to get in this, this year so that's going to be a challenge. And then if you look at our other income line that was pretty significant as well I mean just over $3.5 million on that line item which is not that we would -- we wouldn't guide to that as well. So there's just some headwinds there particularly in the fourth quarter that would just be a challenge and hey, naturally we've always been conservative from a guidance standpoint and but we feel comfortable with what we've put out.

Okay. That's very helpful. I appreciate the time guys. Thanks.

Your next question comes from the line of Todd Fowler with KeyBanc Capital Markets. Your line is now open.

Dave, I was hoping you could comment a little bit on the fleet growth expectations. It seems like you made a little bit of progress here organically if I back off what, I think Barr-Nunn ended here in the quarter. Can you talk a little bit about what you're seeing with respect to drivers and then I think on the release you comment on adding some new service centers or adding some trucks to new service centers, is that saying that you've opened some new service centers or is that just something that you're anticipating going forward?

Yes, okay, good question. So first off on drivers continues to be difficult I think obviously we're all trying to grow because everybody is increasing driver wages at a fastest pace. We've seen in decades if not ever and so it continues to be a challenge, we -- you are correct in your assumption with organic, we have made some progress. If you back away Barr-Nunn we were somewhere between 5.5% and 6% fleet growth without the Barr-Nunn acquisition helping on a year-over-year basis which we've traditionally tried to target that, we've been at that 5% to 7% now for a little while which we wish it could be more. We wish that was double-digits but in this environment and getting the kind of revenue production on a per truck basis that doesn't lead to get you to more than 10% growth just on the fleet side. So but it's not getting any easier, and then what was your second question?

Just on the comment about --

Service centers

Yes.

Yes, I did make a comment that we had begun some operations in expanding our service centers and so most of that's been done in an existing service center but that didn't offer that particular service like refrigerated for example. And so we've got some, we've got a few new openings where we've begun to add tractors and we don't, we probably won't announce more details that that, we won't announce the locations, probably won't even talk about how many of them we're doing but we've done a few and we expect to do more of those. Main reason we're not talking about it is for the reason I just had been explaining which is how difficult the drivers are and we just assume not telegraph that per se all over to everybody and all over the country so.

Sure, and that makes sense. And just a follow-up on the driver side, is it that retentions a little bit better right now or is that recruitment that's helping with the organic growth or is that a combination?

It's really -- it's a combination although retention has been difficult, it's been, we saw a little bit of -- we saw some good progress in the back half of the year and it's not been as easy for us not dramatically different but we're -- we would get good lead generation that whole world has changed its all gone digital. It's just I think it can be very confusing for drivers they are absolutely inundated with offers for employment and so we just -- we're working hard to make sure that its very high quality job and so we've obviously been making some progress to be able to have some growth on top of what we had going and of course we would put all of our numbers, revenue production numbers, revenue per truck based on total truck not season trucks not seated trucks. So that's -- that gives you a full effect of trucks that have been added and any trucks that may be open that's all factored in there.

Sure, okay. That makes sense. Congratulations on a good quarter.

Your next question comes from the line of Allison Landry with Credit Suisse. Your line is now open.

I was wondering if you could give us a sense of route guide compliance during the quarter perhaps relative to the first quarter 2014 and then also compared with may be the average for the full year 2014?

I missed the first part of your question Allison, do you mind repeating that?

Sure, sure no problem. I was asking about route guide compliance and what that was like during the quarter compared with the same quarter of the prior year. And then, if you had a sense of comparing that with the average route guide compliance in the full-year of 2014?

Well I'm not sure that we'd have a real good read on the route guide compliance and may be you'll have to explain more of what you mean. Are you talking from the customer's perspective?

Yes, so customers that are looking for sort of, sort of like contractual business I guess more committed business?

Yes, I would say that we saw shippers, our customers indeed had done a better job of finding capacity that was willing to be committed to move allow the freight in the first quarter which was much different than what it was a year ago. In the year ago I think it was typical, I think perhaps we had a lot of customers in a committed freight on the rail and with the challenges associated with weather and the rail service, they found themselves without a commitment and out there somewhat scrambling to find capacity. And so I think that over the year through mini bids and full blown bids I think they'd find a way to try and get capacity. Now they've done that at higher rates as we've seen. And I think -- so it's been a little bit more orderly we didn't see the same level of disruption that we had previously seen in prior years that typically drive to spot market. Now I think that that's going to be different in the second quarter. We're not accustomed to strong spot activity, if you will, in the first quarter, like we saw last year, but we are used to it as an industry in the second quarter. Other than 2009, we've seen a very, we've seen that strong seasonal demand with a lot of freight that just pops up out of nowhere that just can't be committed 12 months out of the year. So you don't see some of that spot activity take place. In terms of route guide compliance that's -- we don't get a whole lot of visibility into exactly where we are with customers, and we go through bids, we sometimes will get awarded the primary or but we'll still get phone calls to all other lanes but we want the primary on. Often times because of the short to medium length of haul, nature of our business, and our ability to respond very quickly, will sometimes benefit from some of those retendered loads where whoever was the primary wasn't able to service the load and so we're able to come in and provide a solution either with our own assets or with our brokerage. And so we do a lot of that both in good times and in bad it seems. But all in all may be the best answer to your question would be the first quarter was much more orderly but that doesn't -- I don't think you should draw a sweeping conclusion from that about the freight market in general.

Okay. Thank you. That was a really comprehensive answer. I appreciate it.

Your next question comes from the line of Scott Group with Wolfe Research. Your line is now open.

So four quarters sort of would be the operating ratio. Wanted to get your thoughts on like, I know you haven't done it before but is there a reason why you couldn't get to a mid-70s operating ratio on the asset base side or just may be call your thoughts if you think that's realistic or not. And it's -- it's the margin side of the story gets tougher, may be just help us think about the earnings drivers beyond that, can you sustain double-digit fleet growth into next year? Do you think you can sustain mid-single-digit pricing into next year?

Okay. So what you're saying is the OR is not good enough for you, I got you there. And there is not any of us there content. So we look at this quarter and think there is still a lot of meat left on that bone because on our miles we're not positive on a year-over-year basis there is -- there are some challenges that come with your kind of rate raising environment like we are and so there is obviously been some changes with lanes and whatnot that can sometimes hamper productivity. Of course the West Coast ports had a negative impact that we saw in the first quarter but that's reversed towards the end of the first quarter and we'll have fully reverse year throughout the second quarter we would expect. So nobody here is content. I don't think that we're actually trying to do it, we're not trying to manage to one particular number, we're just trying to be the very best we can be at about 30 different areas that lead you to an 80 or better operating ratio. And so we're -- we're trying to, as you can tell, we're pushing the needle on growth at the same time. So we're trying to make sure we've got the kind of returns we want, coupled with the growth. So our sole focus is in trying to get to a particular OR number and then settle there and be happy. It's -- the OR is the result of a lot of effort and a lot of work in a whole bunch of different areas and I don't know if one of those 30 some odd areas within our company that we manage closely that has hit its full stride and we've made good progress in maintenance on…

Yes, very helpful thanks. I appreciate it.

Thank you.

Your next question comes from the line of Matt Brooklier with Longbow Research. Your line is now open.

So conversation around West Coast ports being a negative during the quarter may be you could kind of provide a little bit more color in terms of how much of the headwind or negative it was. And then I guess how much catch-up do we have do you think that will benefit second quarter?

Yes, well we have a Port and Rail Services business that obviously was the most impacted. There would been a residual impact on the West Coast which we had a lot of trucks out there too. So there is an impact but frankly there was an impact in the third and fourth quarter of last year as the port was operating on a very slow pace. And so things there have become much more efficient. I think they cleaned things out very fast may be even faster than some had expected, and so good progress has been made. I think now the port will still have some challenges where unless there is very large ships and ships are larger in many cases and they are just as congestion it just happens based on how it's all step up over there. To say nothing for the fact that there may be a rebound effect as all these boxes finally get to Asia that's been starts for empty boxes. And so there could be another way it kind of hits to say nothing for the fact that we're about to go into the seasonal strength in the Southwest from the produce and beverage perspective that could pull capacity away from some of these port loads. So we'll just have to kind of see how all plays out still I think it's somewhat we can tell we've still got couple two or three months or something may be of digging out. But that's a dynamic world as more ships come in. So there will be a little bit of help in the second quarter. But I wouldn't say it's overly material just because I wouldn't say it was overly material in the first quarter. Does that make sense?

Okay, helpful. Thanks for the time.

You bet. Thank you.

Your next question comes from the line of Rob Salmon with Deutsche Bank. Your line is now open.

You know someone just asked question about the optimization of the truckload margins. When I think of the logistic segment loads historically I've always thought you're doing a great job if you can get to a 5% operating margin gross of fuel. You guys are now in the high-single-digits, so if any sort of constraints with regard to your model how high that can go?

Well I don't know that it gets much better than that. I think the challenge is the barriers to entry in that space are so much lower than they are on the asset base side. So you could see -- we could see massive consolidation and I think we have across large brokers and large non-asset based logistics companies and I don't -- I don't -- I'm smart enough to know, I don't know if that is -- if that consolidation is going to lead to any kind of pricing leverage for that those large companies because there are just so many agents. And the fact that there is load boards may get where you can find tractors if you have any kind of loads even make-believe the loads that you post on a load board you get responses from carriers. And so the world is becoming much more transparent in that regard. And so the -- I'm not sure that that speaks that those margins are going to -- are going to change a lot. The thing we have going for us is we can start with a lower gross margin but drop more to the bottom-line just because of the efficiency. We can just do it in a much more efficient rate and when you look at the earnings generated by our logistics business based on those revenues and compare those throughout the industry, you'll find that we're just much more profitable, we're much more efficient from an overhead cost perspective. We are able to hold on to more of that gross margin and that has everything to do with the fact that we've already got an established business and sales business and so we probably can do it with a lot less folks may be even half the folks in some cases on a -- on generating the revenue side. And so that's an advantage that we have that long-term we think means we can have an upper-single-digits margin when if gross margin stay in that mid-teen range which is kind of where they seem to somewhat settled it. So as long as we can produce more out of a dollar of gross margin we like our chances of long-term being viable and being able to grow very quickly.

Makes sense. Thanks for time.

Okay. Thanks, Rob.

Your next question comes from the line of Tom Wadewitz with UBS. Your line is now open.

Hi, good afternoon. It's Alex Johnson on for Tom.

Hi, Alex.

So we want to ask you, and I think you touched on this a bit a couple of questions ago, in terms of fuel efficiency, but in this lower oil price environment, does that change how you think about sort of some of the investments that you might make in the business to drive fuel efficiency? And if so what does that mean for potential uses of excess free cash?

I don't think that it changes much for us. I think we’ve made a decision to move -- to make certain investments that work without have to work at $4 or $5 fuel and I don't know we've ever made investments, used free cash flow at the $4 or $5 price range that now we wouldn't today to answer your question more specially so. But the good news is there are good technologies. Now they cause more upfront. They add a little to depreciation. But they would have a very solid payback time horizon for us and keep in mind, we're going to keep the truck for four years and so we can do our payback and well under that timeframe. And so we're making those investments today and to say nothing for the kind of advancements and technology that help us -- help our drivers being more fuel efficient that ends up putting more money on their pockets as well. So we have a lot of efforts going on there. We're going to have those efforts whether we are paying $1.50 for fuel or whether we are paying $3 for fuel.

Okay great. Thanks for answering the question and for the time.

You bet.

Your next question comes from the line of John Larkin with Stifel. Your line is now open.

I was wondering if you could talk a little bit more about the driver pay that you are sliding in here pretty much every year at a fairly high clip. When you first discussed it, it sounded as if it was more of a comprehensive pay for performance type of a program, and then later on I got the impression that it was more of an across-the-board increase. Could you illuminate us on that a little bit, and tell us how that works, and why you think it's going to be effective in retaining and recruiting drivers?

Yes, yes. I'll talk may be historically what we've done. And what we're doing today we might be a little more strategic about. But in 2013, we rolled out some pay increases that was more on a variable basis tied to bonus opportunities for drivers. So that in 2013 we still didn't kind of have the rate improvement we really felt like we needed but yet we felt like we needed to do more for the driver and so we set it up in a way where they were somewhat manufacturing their own bonuses through some efficiencies and things. So that -- so that's where we started in 2013 and early 2014, so a year ago we felt like we were in a different environment. So the 1st of March and again the 1st of April we instituted across the board a penny for a mile pay increases. We hadn't done it across the board increase like that since the 2010 timeframe and we gave back a penny that we would have to reduce in 2009 with the difficulties of 2009. So, really we arguably we're going back as a net pay increase for the first time since early 2008 and that -- so that went into effect a little over a year-ago and we did that with two pennies 30 days apart. And then as we went throughout the year throughout 2014, we continue to do other things to improve the bonus and whatnot. Now into 2015, we've just instituted another across the board increase. There are other areas of compensation that we have increased for our drivers. We've continued to treat the bonus. We've got technology that can have in their pocket or in their truck to tell them where they stand relative to their bonus to really try and help them achieve the maximum compensation that they can receive. And if you were to look it just run through all of our website I guess you would probably see that we all are giving compensation in various one form or another. And so -- so we’ve got a list of where we would next like to increase the compensation. And so we’ll continue to do that so we can kind of reach out to the broadest group of potential drivers that we have, it satisfy everybody needs, some issues are may be more important to some drivers than others and it's not just as simple as across the board pay per mile increases. So I hope that answers your question John.

May be as a related follow-on, what are the factors that drive the bonus that you've referred to a couple of times?

It's the things you would expect driver been safe, the driver been productive, and the driver having good fuel. So I don’t think that’s terribly unique in our space.

Got it.

Yes.

Thanks very much.

You bet. Thanks John.

Your next question comes from the line of Jason Seidl with Cowen and Company. Your line is now open.

Thank you, operator. Good afternoon, gentlemen. If you go back to one of the earlier lines of questioning, when they were talking about maybe some of the weakness in the spot market, clearly you guys are putting up very good numbers. And the comps seems to be, at least for the industry, getting a little bit more difficult here in 2Q, but it seems like the market's very good out there right now. What would it take for a cause of concern from you in terms of the outlook for pricing? It would seem that it would have to take a material downshift in the economy for me to get more concerned. I'd just love to hear your thoughts.

Yes. I think Jason that all of a sudden we didn't know what to do with all the drivers that were coming on board. I think that might be a cause of concern because the economics has improved such in the space that we would probably all run out and buy more trucks. And that supply -- that change in supply is quantitatively could be measured easier than what's going on with the boarder demand and GDP trends. But I think that what gets confusing in our space is there are so many data points and they all come at different times throughout the months or throughout the quarter that in this industry, in particular, we might suffer sometimes from kind of a keyhole analysis, if you will, or we kind of have a tendency to narrowly look through the keyhole of one or two data points and make sweeping conclusions. Meanwhile, we ignore all kinds of compelling data that surround this keyhole, if you will, and I think peripheral vision can go a long ways in a industry as broad and big as we are and some of these compelling macro data items would of course include drivers I think being the biggest, where it's preventing all of us from growing by leaps and bounds. We are all raising pay at unprecedented rates. It doesn't appear as if we are attracted more people into the space, potential drivers into the space, feels a little bit more like we're trading drivers. The -- I think the second maybe macro factor might be that the freight has steadily been improving now for several quarters off from a very deep low few years back and more than a few years now. But pricing clearly is rising and everybody is benefiting the peers from that, oil is still very low for us. Obviously that's a big deal for truckers. Regulations are no doubt on the rise and becoming even more of a challenge. Capital requirements are in all time high. It's never cost more to buy a truck and a trailer. Insurance and other things are additional factors that make barriers to entry relatively high as compared to where they’ve been over the 35 years of this industry. And so I think if one is not careful you peak through that little keyhole and you might think you see a peak, you step back and you look at the macro data and you realize wow, there are a lot of compelling forces at play here and we might see some false starts and stops or some macro -- some micro data that might scare us in one way or another. But by and large I think the likely conclusion from looking at the macros that this is going to be a strong market may be for some time to come. So I hope that somehow answered your question then, Jason.

No, it did. And in light of the post 5:30 time here I will ask any questions I have offline for you both.

Okay.

Gentlemen. Thank you.

Sorry for taking up all your time there for your follow-up. So it looks like unfortunately we're out of time for questions. For any that are still in the call queue, Adam, will relay that phone number for you, and hopefully we can still answer your question.

Yes, you can call us (602) 606-6315 and we'll do our best to get back to you shortly.

Appreciate everybody's interest in our call, and Tracy, that will conclude our call.

Thank you for joining ladies and gentlemen. This concludes today's conference call. You may now disconnect.