Good day, and welcome to the Saia Incorporated First Quarter 2016 Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Doug Col. Please go ahead.

Thank you, Wendy. Good morning, everyone. Welcome to Saia's first quarter 2016 conference call. Hosting today's call are Rick O'Dell, Vice President and Chief Executive Officer; and Fritz Holzgrefe, our Vice President of Finance and Chief Financial Officer. Before we begin, you should know that during this call, we may make some forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all other statements that might be made on this call that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. We refer you to our press release and our most recent SEC filings for more information on the exact risk factors that could cause actual results to differ. Now I'd like to turn the call over to Rick O'Dell. Richard D. O'Dell - President, Chief Executive Officer & Director: Well, good morning, and thank you for joining us. This morning, we announced our first quarter 2016 results with earnings per share of $0.42 compared to record first quarter earnings per share of $0.49 in the first quarter last year. I'm pleased that despite a freight environment generally deemed to be soft, we were able to increase our LTL yield for the 23rd consecutive quarter. Our customers seemed to increasingly view our relationship as a partnership and we're committed to providing best-in-class service to support the value proposition that we offer in the marketplace. Along with the continued focus on pricing and mix management, we're working hard to find opportunities to offset the impact of an inflationary cost environment with productivity, improvements and other efficiencies. We've continued to invest heavily in our business, and year-to-date, we've taken delivery of over 300 new tractors, 800 new trailers and nearly 200 forklifts. A…

Our first question comes from Scott Group with Wolfe Research. Please go ahead. Your line is open.

Hey, thanks. Good morning, guys. Richard D. O'Dell - President, Chief Executive Officer & Director: Good morning, Scott. Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Good morning, Scott.

I apologize if I missed it. Did you guys give the monthly tonnage? Richard D. O'Dell - President, Chief Executive Officer & Director: I didn't (08:25). Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: We haven't yet.

Okay. That would be great. Thank you. Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: All right. So LTL tonnage year-over-year, and these are by month, January, minus 5%; February, minus 1.4%; March, minus 4%. Now, if you adjust for Good Friday, the March number would be minus 2.2%. Shipments for January, Feb, March, minus 0.9%; plus 1% in February; minus 2.6% in March; adjusting for Good Friday, minus 0.8%. Richard D. O'Dell - President, Chief Executive Officer & Director: And I would just comment too. I think we benefited in January and February probably volume-wise from a more mild winter weather than normal. So – just when you look through those trends, I think that kind of needs to be taken into consideration. Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Yes.

And do you have numbers for April yet? Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Sure. So April month-to-date tonnage, actual was 3.4%. Now, adjusting for Good Friday – excuse me, minus 3.4%. Adjusting for Good Friday, minus 5.9%. And then shipments for April month-to-date, minus 2%; and then adjusting for Good Friday, minus 4.3%.

What are you guys seeing out there that's driving that weakness in April? I mean, I guess we've heard if from a lot of the transport so far, but any end markets that's driving that? Richard D. O'Dell - President, Chief Executive Officer & Director: It just seems – obviously I think the industrial economy is pretty soft. Geographically, we're having success in growing kind of in the West and in the East and the South Central. Obviously the oil patch is a big impact. Those segments are not nearly as strong as the rest of our geography.

And Rick, you usually share some perspective on how you think about margins from one quarter to the next. There are some moving parts obviously with extra operating day, mild weather. How do you think about margins in 2Q? Richard D. O'Dell - President, Chief Executive Officer & Director: Yeah. So if you look – 1Q to 2Q trends have been better generally obviously by 1.4 operating points to as much as 3.3 operating points, kind of like you said, depending on holidays, timing of general rate increases. We look back over the five-year period, successful contract renewals, accident volatility, and like you said, first quarter winter weather. So I think given the current weakness in the industrial economy and the mild first quarter winter weather that we had, as well as the timing of this year's general rate increase being basically the same as last year, we believe probably the bottom of this range is most likely.

Okay. That makes sense. And just last question, it feels like the past couple of quarters we've heard kind of mixed things about the competitive environment. One quarter was worse, one quarter better throughout the year. How are you thinking about the competitive environment and LTL pricing for the year? Richard D. O'Dell - President, Chief Executive Officer & Director: Yeah. We were pleased with the pricing for the quarter, up 5.3% on the contract renewals with similar to last year. We are seeing some procurement-type people go out with some out-of-cycle bids. But thus far, those have come in at a pretty reasonable levels. Again, I think we're obviously very granular and detailed in our pricing analysis and the work to target business that works within our network, but – I mean, it's competitive, but I would still describe it as being rationale, particularly considering some of the softness that we're seeing in some sectors.

And are you still seeing that 5% plus renewal rate in April? Richard D. O'Dell - President, Chief Executive Officer & Director: I haven't even looked at it yet, to be honest with you.

Okay. Fair enough. All right. Thank you, guys, for the time. Richard D. O'Dell - President, Chief Executive Officer & Director: All right.

And we'll go next to Brad Delco with Stephens. Please go ahead. Your line is open.

Good morning, Rick. Good morning, gentlemen. Richard D. O'Dell - President, Chief Executive Officer & Director: Good morning, Brad. Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Hey, Brad.

I think, Fritz, can you talk a little bit about the sustainability of purchased transportation at these levels? I mean, 4.3% of revenue is a pretty good number relative to expectations. Just curious how we should be thinking about that looking throughout the year. Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Yeah. I think that – we continue to look for ways to optimize internal utilization. These sort of – this sort of trajectory, I would say, that the Q1 numbers are – we can continue those at those sorts of rates, but that – if things uptick different parts of the – our footprint change or customer set changes, that sort of thing, you could see that change. But I think at the current sort of model rate, I think it's probably reasonable expectation.

Great. And then in terms of this question we're getting, salaries, wages and benefits up about probably 8% on slightly down tonnage. Is that a function of you shifting some of that purchased transportation to company trucks and that's kind of why there is a low abnormal relationship between tonnage and increased salaries, wages and benefits, or how do we think about those – maybe second question, those two line items together moving forward? Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Yeah. I mean, I think there are couple of pieces inside that salary, wages and benefits number you need to think about. One obviously we had, as we mentioned, a roughly 4% increase – salary increase across the workforce on average at July 1 last year. So that, you've seen that impact. You're also seeing the impact of 10% to 12% sort of inflationary rates around benefit costs. And I think we're utilizing, as you point out, a larger part of our own work line haul network to take on that what was purchased transportation. So you really have the utilization of our internal assets more, a greater part, and that's part of the savings from PT that is invested there. We're leveraging those employee assets. And then you're seeing the inflationary costs that we're having to deal with. One last point, although it is a little bit more minor in the total change, is, if you recall last year, we talked a lot about investing in our network around putting the appropriate human resources, asset safety and claims folks in the field. And that was done kind of in Q1 into Q2. So now you're seeing sort of the ongoing sort of step-up of those folks being on staff full-time now.

Got you. And then I guess expected benefit in some other areas of (15:18) structure? Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Sure. Yeah. I mean, we've talked about our emphasis on quality claims. So our claims – reducing our claims ratio, those people, those investments are key to that value proposition. And I think we operate or manage the workforce better with those additional HR assets in place and safety assets.

Got you. And then maybe, Rick, just a question for you. For the April tonnage weakness or I think relative maybe to March, any impact from weather or flooding in some of the areas in which you operate? Richard D. O'Dell - President, Chief Executive Officer & Director: Just a little bit. Obviously the Houston flooding caused us to be shut down for a day plus obviously some customers had some ongoing impact thereafter, but that's probably the only one, and would we say that would be minimal impact. Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Minimal impact. Richard D. O'Dell - President, Chief Executive Officer & Director: 0.2% or something like that. Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Yeah, something like that because it was only (16:17). Richard D. O'Dell - President, Chief Executive Officer & Director: Yeah.

Okay. All right. Well, thanks , guys, for the time. Appreciate it. Richard D. O'Dell - President, Chief Executive Officer & Director: No problem.

And our next question comes from David Ross with Stifel. Please go ahead. Your line is open. David Ross - Stifel, Nicolaus & Co., Inc.: Yes. Good morning, gentlemen. Richard D. O'Dell - President, Chief Executive Officer & Director: Good morning, Dave. Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Good morning, David. David Ross - Stifel, Nicolaus & Co., Inc.: Could you talk I guess – you mentioned cargo claims being strong. What was the cargo claims ratio in the quarter versus year-ago? Richard D. O'Dell - President, Chief Executive Officer & Director: It was 0.81% versus 0.89%. David Ross - Stifel, Nicolaus & Co., Inc.: And then on the insurance and expense line item, you mentioned higher premiums and accident expense. How much I guess of that higher than expected expense was due to the premiums versus the accident? Just because I'm trying to think going forward, what are we looking at in terms of premium increase and how that might play out into the quarterly insurance volume. Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Yeah. So we looked at year-on-year. We had about a 25% increase in premiums. And that is a – that's a part of that increase, the claims and insurance increase. I think that more significant thing to think about in claims and insurance is that last year we had Q1 was a particularly good quarter. This quarter, we had the number of accidents was actually down, but severity was up a little bit. So – and the development of those expenses related to those accidents was a little bit higher. So I think, as you think about that line over time, you really should think about sort of a trend over time that's –…

And our next question comes from Ravi Shanker with Morgan Stanley. Please go ahead. Your line is open. Ravi Shanker - Morgan Stanley & Co. LLC: Thanks. Good morning, everyone. If I can just follow up on the insurance questions, can you just talk about the role of technology there, what percentage of your fleet today has driver assistance systems and what kind of impact that you have on the insurance line over time? Richard D. O'Dell - President, Chief Executive Officer & Director: Yeah. Okay. So in today's environment, kind of depending on which tractors have this lane deviation system really determines whether you have a forward-facing camera or not, and I have to get a update on that, but probably 70% of our fleet has that at this point in time. Obviously, you get essentially a kind of virtual ride-along associated with that, meaning that if there is a heart-breaking incident or a lane deviation or somebody swerves or something, then we get a video sent back to us and it gives us an opportunity to obviously either recognize whether the driver was doing good defensive driving and made an appropriate evasive maneuver or whether perhaps was being inattentive. All of our line haul units and lesser percentage of our city units have that technology in them, and as you might imagine, kind of over-the-road highway line haul tends to be where you have your more severe accidents. So it's a great opportunity for us to have an opportunity to either counsel drivers who may have been inattentive or made a bad decision, and likewise, to reward people that are using appropriate defensive driving techniques and avoiding accidents. Ravi Shanker - Morgan Stanley & Co. LLC: Got it. And have you done any kind of early assessment of…

And our next question comes from Todd Fowler with KeyBanc Capital Markets. Please go ahead. Your line is open.

Great. Thanks. Good morning. Nice quarter here. Good morning. I guess, Rick, can you talk a little about the comments around weight per shipment? And I understand that it's still – some pressure on a year-over-year basis, but it sounds like maybe a little bit of stabilization on a sequential basis. Do you think that some of the pressure in your energy-dependent markets is starting to stabilize or what do you read into the weight per shipment trends? Richard D. O'Dell - President, Chief Executive Officer & Director: Yeah. I mean, obviously, some of those industrial sectors have heavier weight per shipments than some others. I think it's probably partially a trend associated with e-commerce. You tend to have some more residential deliveries and people go and – tends to be an increasing segment that we have, and then obviously that kind of decline in the industrial economy. I don't know on the oil patch, whether that's a bottom or not. Obviously, the year-over-year numbers are severely negative for us. And if you just sort of look at the volume environment, Los Angeles was our strongest growth region during the quarter and is now the largest of our 11 regions, which used to be in Texas. Excluding the impact of fuel surcharge, six of our 11 regions grew and the four regions that did not grow revenue are kind of in that lower Midwest or South Central kind of geography, which is obviously affected by the oil segment. So I don't really know what you're reading too much into the change in weight per shipment. It seems to be that it's happening across most of the LTL segment. So -

Okay. I mean, those comments are helpful, and it sounds like that maybe there's even some geographic mixes. The West Coast is growing faster and the heavier weighted shipment parts of the market are shrinking a little bit, but that's going to have some impact as well on what you're reporting. Can you share any comments around the impact of fuel here in the quarter, and as we've seen fuel prices move up at the end of March now into the second quarter, how that impacts either the profitability in the margins or how you think about the impact of fuel on the OR into the second quarter? Richard D. O'Dell - President, Chief Executive Officer & Director: Yeah. Fuel margins year-to-year were pretty negative. It was about three quarters of the operating point. While fuel – obviously our surcharges don't correlate 100%, and as the fuel step down, the cost versus where the fuel surcharge is trended with a negative impact of neighborhood of a couple of million dollars.

Okay. And then just on the wage side, I know it's still early in the year, but would the expectation be that there would be another wage increase at some point in the middle of the year? And if you can give a sense maybe around the magnitude that we should think about if that's going to be the case? Richard D. O'Dell - President, Chief Executive Officer & Director: Yeah. It's July the 1st, and this order of magnitude companywide, something in the neighborhood of 3%.

Okay. And then just the last one I had maybe for Fritz, with the increase in the CapEx, do you have a expected run rate for depreciation, either on a quarterly basis or for the full year? Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Yeah. We don't project that or provide that guidance, but essentially if you take our capital number, you would – we're bringing on new equipment and it's primarily what we've invested in so far. So I would adjust basis that. I think what's important to note about that is those capital investments are part of the savings initiatives that we've talked about, both reducing our maintenance cost as well as the fuel economy kind of going forward. So those are – those were – we looked at those investments that provided pretty close and immediate return. Richard D. O'Dell - President, Chief Executive Officer & Director: And as you might expect, the step-up in the CapEx of $10 million in the San Francisco area is primarily land value. There's that much impact on depreciation.

Okay. And then the comment would be though that if depreciation does go up for the new equipment that there's some offsetting impact on the maintenance or operating lines. Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Yeah. So – exactly.

Okay. Thanks a lot for the time this morning. Richard D. O'Dell - President, Chief Executive Officer & Director: Sure. Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Thanks.

And our next question comes from Art Hatfield with Raymond James. Please go ahead. Your line is open. Art W. Hatfield - Raymond James & Associates, Inc.: Hey, thanks. Hey, morning, everyone. Most of my questions have been answered, but one thing I missed, Rick. When you mentioned the OR change that you look at Q1 to Q2, I missed what the low end of that range was that you said. Richard D. O'Dell - President, Chief Executive Officer & Director: Okay. It was 1.4 to 3.3, I believe - Art W. Hatfield - Raymond James & Associates, Inc.: Okay. I got the – okay. That's helpful. Richard D. O'Dell - President, Chief Executive Officer & Director: Yeah. We like the upper end better, but given the current environment - Art W. Hatfield - Raymond James & Associates, Inc.: No, no, I understand – no. I understand. I just didn't – I wanted to get the right lower end because you would kind of (27:32). I didn't want my lower end to be 250 when you really said 130. I don't know how to ask this, but thinking about the CapEx cycle and how you spend on equipment, clearly when you do that, you mentioned today, you get benefit on the maintenance side, on the fuel side. And I would assume that's initially somewhat of a net benefit to the income statement, but over time, as maintenance dollars pick up and fuel degradates on the equipment a little bit, it becomes – I don't know, it balance out where it's a net neutral and then it gets worse at end of life. How do we think about you with regards to an equipment cycle, with regards to that benefit playing out just go round? Do we – we would think…

And we'll go next to Jason Seidl with Cowen. Please go ahead. Your line is open. Matt Elkott - Cowen & Co. LLC: Good morning. This is Matt Elkott actually for Jason. Thanks for taking our question. Most of our questions have been answered, but Rick, with one key player in the industry still under fairly new management and still undergoing some changes, are you guys seeing some customer switches in the market, either customers coming to you from competitors or vice-versa? And is that mostly price-driven? Richard D. O'Dell - President, Chief Executive Officer & Director: I think we're seeing some opportunities created by some of the changes that are going on at the major competitor that you're speaking of, but I wouldn't call it like a overwhelming. We've seen a lot. You were not getting feedback that there is a big deterioration in service or a major change in their pricing philosophy. I think you just have some people that have had a long-term relationship there and some of the players have changed, and we're seeing some opportunities from that, but I wouldn't call it a ground flow or anything. Matt Elkott - Cowen & Co. LLC: I see. And your sense of the pricing discipline in the industry as a whole, do you get the sense that people are maintaining that discipline in the face of the prolonged sluggishness in the market? Richard D. O'Dell - President, Chief Executive Officer & Director: Thus far, I believe, that's been the case. I mean, like I said, we've seen some people go out. We've had some accounts that don't operate within our targeted margins and they've gone out for a out-of-cycle bid. And we obviously continue to get our five-plus type of increases, and in a couple of cases,…

And our next question comes from Tom Albrecht with BB&T. Please go ahead. Your line is open. Thomas Stephen Albrecht - BB&T Capital Markets: Hey, guys. Good morning. Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Good morning, Tom. Thomas Stephen Albrecht - BB&T Capital Markets: Really nice job in a less-than-stellar freight market, I guess we can say. I wanted to follow up, Rick, on your OR conservation and just maybe come at it from a little different angle. So first of all, kind of housekeeping. When you talked about that 75-basis point hurt from fuel, was that this first quarter or was that referenced to 2015? Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: That's 1Q to 1Q. Thomas Stephen Albrecht - BB&T Capital Markets: Okay. All right. And then when you talk about the OR improvements sequentially based upon seasonal patterns and all that, I guess I was thinking that given that fuel off its bottom is now up about $0.22 a gallon over the last five or six weeks. Probably going to go a bit higher. I'm a little surprised. Well, should we think that, if that were to continue, that would begin to be a help for LTL ORs in general, maybe not commenting so much on size specifically? Richard D. O'Dell - President, Chief Executive Officer & Director: Yeah, it should be. Thomas Stephen Albrecht - BB&T Capital Markets: Okay. And so we're starting in a good way in April versus the quarter. So the fact that your OR improvement might be at the lower end of the five-year average improvement, would the bulk of the explanation then be just because of the sloppy freight environment? Richard D. O'Dell - President, Chief Executive Officer & Director:…

And we'll go next to Scott Group with Wolfe Research. Please go ahead. Your line is open.

Hey, guys. Thanks for the quick follow-up. So I wanted to go back, if I can, just to the tonnage numbers you gave just because I think you said, Fritz, that March was 4% reported but minus 2.2% adjusting for Easter and then April was down 3.4% but would have been down 5.9%. Just curious, why is there a 180 basis point impact in March from Easter but a 250 basis point impact in April from Easter? Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Yeah. One of the things is we're giving you month-to-date number, so it doesn't have the whole – March was a 23-workday month. Right? So you have that. And then today we're just giving you an update on where we're running month-to-date and the month is not over. So there's probably some impact from that just ensuring that month-to-date numbers.

Okay. That makes sense. Okay. Frederick J. Holzgrefe - Vice President of Finance & Chief Financial Officer: Yeah.

And then, Rick, last quarter, you had talked about even though there would probably be some margin pressure in the first quarter, you still thought you could see flat to improved margins for the full year. Are you still thinking along those lines for 2016? Richard D. O'Dell - President, Chief Executive Officer & Director: Well, obviously, 2Q, we had very difficult comps. 3Q was clearly not a good quarter for us. So I think it really just depends on what happens in the volume in the yield environment, and that's probably the two biggest triggers (39:35) there. I feel confident. We've targeted our $20 million of savings. We're tracking to achieve that. It's in our run rate. So, I mean, our key internal initiatives from an execution standpoint, I have confidence and I guess the external environment, probably less so. And we've had a few soft days here in April. So maybe a little cautious with that, but we would still target to achieve that.

Okay. Makes sense. Thanks a lot, guys. Richard D. O'Dell - President, Chief Executive Officer & Director: Sure.

And it appears we have no further questions at this time. Richard D. O'Dell - President, Chief Executive Officer & Director: All right. Great. Thanks for your interest in Saia. We appreciate and look forward to catching up with you guys.

And this does conclude today's program. You may disconnect at this time. Thank you, and have a great day.