Richard Cribbs - SVP & CFO David Parker - President, Chairman & CEO Joey Hogan - President & COO.

Nick Farwell - Arbor Group.

Excuse me, everyone, we now have our speakers in conference. Please be aware that each of your lines is in a listen-only mode. And at the conclusion of today's presentation, we will open the floor for questions. At that time, instructions will be given as to procedure to follow if you would like to ask a question.

I would now like to turn today's conference call over to Mr. Richard Cribbs. You may now begin..

All right, thank you Karen. Good morning. Welcome to our first quarter conference call. Joining me on the call this morning are David Parker and Joey Hogan, along with various members of our management team. This conference call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. Please review our disclosures in filings with the SEC, including, without limitation, the Risk factors section in our most recent Form 10-K and Form 10-Q.

We undertake no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. As a reminder, a copy of our prepared comments and additional financial information is available on our website at www.ctgcompanies.com under the Investor Relations tab.

Our prepared comments will be brief and we will open up the call for questions. In summary, the key highlights of the quarter were; with a $0.21 earnings per diluted share achieved first quarter profitable results for the second year in a row following ten consecutive years of unprofitable first quarter results from fiscal 2005 through fiscal 2014.

Our asset-based division's revenue, excluding few, decreased 1.7% to $131.1 million due to a 2.9% decrease and extractors, partially offset by 0.5% increase in average rate revenue per truck, and an increase in our refrigerated intermodal freight revenues.

Versus the year ago period, average freight revenue per loaded mile was up $0.51 per mile or 2.9% and our miles per truck were down 1%.

Freight revenue per tractor at our Covenant Transport subsidiary experienced an increase of 3.4% versus the prior year quarter, while our refrigerated subsidiary, SRT, experienced a decrease of 1.5%, and our Star Transportation subsidiary experienced a decrease of 1.3%.

Compared to the year ago period, the asset-based divisions operating costs per mile, net of surcharge revenue, were up approximately $0.085 per mile mainly due to higher net fuel cost, employee wages, and depreciation expense. These increases were partially offset by lower casualty insurance expense and building rent.

We recognized the loss on disposal of equipment of $0.3 million in the first quarter of 2016 versus a gain of $0.1 million in the first quarter of 2015. The asset-based operating ratio was 95.7% in the first quarter of 2016 compared with 92.7% in the first quarter of 2015.

The 2016 period included a $1.9 million increase in fuel hedging losses compared with the 2015 quarter. Adjusting for that item, our operating margin contraction was approximately 150 basis points. Our Solutions logistics subsidiary increased revenue by 36.3% versus the year ago quarter.

Combined purchased transportation and other operating expenses decreased as a percentage of revenue resulting in operating ratio expansion to 86.6% from 96.6% in the year ago quarter, the result being an increase of operating income contribution to $1.8 million in the current year quarter from only $0.3 million in the prior year quarter.

Our minority investment in Transport Enterprise Leasing contributed $0.9 million to pre-tax earnings or $0.03 per share. The average age of our tractor fleet continues to be very young at 1.8 years as of the end of the quarter, basically flat to a year ago.

Since December 31, 2015, total indebtedness, net of cash and including the present value of off-balance sheet lease obligations has decreased by approximately $60.5 million to $203.7 million. The main positive in the first quarter were anti-leveraging with that $60.5 million decrease in our net indebtedness.

Two, our safety efforts and favorable claim experience helped produce greater than 33% reduction in insurance and claims cost on a per mile basis.

Three, growing our team truck percentage sequentially to 37.3% from 36.1% averaged in the fourth quarter, 2.9% improvement in average freight revenue per loaded mile in a materially weaker industry-wide freight market. And five, revenue growth and improved operating profitability from our solution subsidiary.

The main negatives in the quarter were one, increased operating costs on a per mile basis, including the unfavorable net fuel and capital cost. Two, increased non-revenue empty mile and reliance on broker fee.

And three, the deterioration in operating profitability and our two subsidiaries, although noting that we have steadily increased our focus on planning and execution of improvement initiatives around this business unit.

Our fleet experienced a decrease to 2,607 trucks by the end of March, a 49 truck decrease from our reported fleet size of 2,656 trucks at the end of December. Our fleet of team-driven trucks averaged 979 teams in the first quarter of 2016, a 1.3% sequential increase from 966 averaged teams in the fourth quarter of 2015.

Our first quarter freight looks forward to inflows. Our year-over-year January miles per truck was down 4.8%. This was followed by strong February when our year-over-year miles per truck increased by 5.4%.

This stronger freight market continued through the first 10 days or so of March followed by another slowdown freight for the last three weeks of March resulting in year-over-year March miles per truck being down 3%.

Similar to what we experienced in January and the last three weeks of March, utilization for the first three weeks of April 2016 has underperformed the prior year. As discussed in the outlook section of yesterday’s earnings release. We currently expect earnings per diluted share to be in the range of $0.28 to $0.33 for the second quarter of 2016.

There are two areas where we would like to provide additional detail concerning our expectations for the second quarter and beyond. First, our fuel heads offers in the second quarter of 2016 are expected to cost an approx. $4.7 million or $0.16 per share after-tax.

To cutting our fuel hedges lot and a considerably lower prices in periods following the 2016 fiscal year, for example, approximately $0.84 a gallon lower for the second quarter of 2017, and $0.92 per gallon lower for the second quarter of 2018 as compared to the second quarter of 2016 respectively.

Such a loss is expected to be significantly less in future years based on current fuel price estimates. Second, we believe the startup investment related to the addition of two major dedicated customers in the second quarter of 2016 could impact our quarterly results by up to $1.5 million or share of tax.

Following the second quarter, with the majority of the startup investment to add these two large dedicated accounts will be complete. And the ongoing probability associated with these two new accounts will be consistent with the profitability we have achieved on similar dedicated accounts.

We believe our core multi-dimensional operations business model is strong. Thank you for your time. And we will now open up the call for any questions..

[Operator Instructions] Our first question will be from Brad Delco [ph]..

Good morning, David. Good morning, Richard.

David, could you do me a favor and just - I know you fidget a lot with shippers, can you sort of give us the perspective in terms of what you're hearing from shippers? Is this an inventory problem, is it truly a demand problem, it just seems like across every area of the supply chain, April commentary is weak and I think everyone is just trying to figure out what maybe going on..

Yes, we've been on the road a lot for the last 45 days and excluding what we all know, the area there are good way operates as e-commerce, more that we have discussions on a lot. The produce side I think, excluded those we'll talk about them a little bit later.

But excluding those brands, the rest of the automotive is doing well and housing is doing well. I just named the four industries that are doing well and I was meeting with one of our large housing customers just in the last week, 10 days ago.

And even now they are pretty happy, their business is down 10% but we're all closing the flags saying the housing industry is doing quite well.

But still down a little bit but excluding those the rest of it that we hope for every one of the customers are saying, I hadn't found a customer yet that says that their business is up besides the four areas that I just mentioned.

The red - I mean virtually every retail customer that I go into - if it's quote not e-commerce that they are - they say we've got some issues going, our business is lot slower, etcetera, etcetera. And from manufacturing, how badly most of those customers are telling me that a lot of it as they are paying as related to the oil industry.

I think we're refining - we're seeing that the oil shutdown in Texas and North Dakota in place that has impacted manufacturing even greater than what we felt that it would a year ago as each and every quarter came and a lot of that manufacturing and those production is up there and how badly and a lot of my customers up there are just saying, we're really hit a lot more because of the oil situation.

The are some sappy goals as I look at - the businesses are in, most of them are down, inventories are up and most of them do believe that to get better.

And I don't it we're all of us on this phone call where it has not been published, it's 1994, I think every analyst including myself believe this half is always better than first half, this is like we always live for the second half event.

And there is a good time, that's true statement but I think we believe that there into slow times as well and our customers believe that.

Our customers believe that we're going to start reducing inventory levels in the next couple of month and we are happy to be see - I think about the beaver side, they are getting pretty excited as we speak because temperatures are starting to warm up and if you remember, temperatures did warm up last year until after Memorial Day.

I mean it was up in the middle of June and those kind of things before they started getting happy about what they were seeing as I'm thinking pork, I'm thinking about a refrigerated side rejected in the poultry and the meat, those guys had a tough time last year there it's plenty of good spring season, they believe that it's starting now.

I was looking at numbers this morning, I'm seeing the beverage side of the business starting to - I actually saw some numbers there and said, it's really starting there on the water and the soda drink because I'm just in the last couple of days I'm going to start to see some pretty impressive numbers on those segments.

So I'm without a customer that is happy but I do find every customer that believes that the next few months they start seeing a turnaround and a lot of that is because of weather related, they believe that they will start reducing inventory. So that's kind of what I assembled last 45 - I think the produce season is going to be outstanding.

We have one of our large customers here last week, actually we were very privileged to win one of the carrier of the year awards, so they were here to present it. And it looks like, last co-star looking extremely good for a strong produce season. So that's kind of what I'm seeing here..

That makes sense. I don't want to take that into - I generally look at your team expedited certain offering as being somewhat premium cost for premium services. But also, you talk about secular demand drivers that regardless of what sort of going in the economy should hold up well.

I guess we should read into your comments that e-commerce related activity in organic food stuff is still going well, still profitable, still giving good utilization on these teen trucks..

Yes, you're exactly right. As I look at, and most of that it's 56% of our total, most of it is zero and I provide on the transport side because that's where a lot of the 99% of the teams are located. And as I look at the e-commerce, I look at their produce including their organic side of it - I was with a large customer this week, couple a days ago.

And just to give you an idea because I didn't exactly understand the exact minute but the candidate on the organic side, when they pulled the core of the lead us out of the head of lead us, and then I have not - and this stuff is producing California produce in Mexico that have 96 hours to get it from the farm to the shelf.

96 hours and it's just unbelievable; number one, I found that very interesting but number two, the e-commerce is growing, it continues to grow, our produce - organic data is growing, it continues to grow, lot of opportunities there. We actually got new reapers coming in, in the next couple of months.

I mean we see some great opportunity here and then the automotive, it's still doing the way.

So as I look at those three segments, they are all up, that's 50% to 60% of our total business and even in the first quarter we continue to gain market share in those segments that are growing faster than GDP, all that good stuff that we master for three or four years ago, it still is playing well. And then plus the housing industry is doing well.

Other than the rest of the business though - when they got high inventories they are not asking - saying I got to have this load over there tomorrow. It does expand a little bit on that 40%, that is known, everything I just said there.

So when it happens, up GDP and high inventory levels, that other 50% of our total business is going to operate in that environment..

That makes sense. And then maybe, I think Richard you mentioned still just with SRT, a lot of opportunity.

Can you sort of put the framework around what I would kind of call the self-help story there? Where is that business operating today versus where you think the potential is?.

Yes, we have absolutely - we've got a couple of things, as the analyst on this pone understands is that, you know the last couple of years, we've had top management focus from us, from me, all down to door working with the SRT management team.

For two years now is that we went in to where we had basically a high 98 to 100 OR and when EODs got 100% implemented and the hours of service change of 2013, and then the EODs at the same time, not that they were doing anything they should not have been doing.

But at the end of the day, it affected us on our hours, some of that destination and hours of service changes. Some of it I would say maybe own EODs, those utilization to fit into 20%.

And I think it's one of the reasons why we all get excited about the December 2017 that we all believe two plus two equals four, well, let me tell you, I know it's a big number because we've had to combat it on a high utilization because keep in mind, here our team running basically a 1,000 trucks and that's a big company.

And when those two events happen, they went from 2,500 miles a week of utilization which every carrier in the country would love to have, that's on the high end of a single operation as we all know. 2,500 miles a week down to 2,000.

And 1,900 to 2,000, it's what that thing settled at and it took that company from 90 to 92 OR company every year for almost 17 years to 98 to 100 OR in about two quarter event.

It went that rapid, well the first thing to we did on the SRT is that their model is high utilization raised on a scale of 1 to 10, a 6 we did increase the rates basically about 13% in last two years we've done extremely well on the right side of the business.

And that's what got them down last year to basically a 96 to 97 OR because their cause was still continue to decline. We took about four or five points OR out of the company and we're lock that, we would get there this year.

That said, rates are not going to go up as high this year as what I would have told you in November that I would intend to paid it for 2016. It's just not going to happen, there is too much capacity that had been brought on in the last six months.

So there haven't a fact of it, but we're not going to get a big relief on the right side which they are going to get rate increases, it's not going to help with dramatically.

So they've had that much of it and we continue to bring on discipline and execution as it pertains to density on lanes as it pertains to more dedicated, and it pertains to more of the regional business, a flat lining of the business segments that we're not been on the SRT, it was taken out about 50 trucks out of that operation.

And we still believe this year that SRT is going to be in that 96 97 OR and we believe that it's a 2017 event but we do believe what we're doing is going to get a company back to where it operated, basically for about 17 years..

That's helpful.

Just to be sure though, the commentary about produce season and maybe poultry being a little bit better because it gets less impact from avian influenza, that's all good for that business segment right, that should all set some that pressure?.

I do think so.

I was with one of the largest customers in poultry, in the last - at the University of Georgia, so it was two weeks ago, and they are expecting I guess - if there was anything negative [ph], is that they are seeing more of the cheaper products of chicken selling more than beef side of the equation but they do believe that they are going to have a very good strong season..

And Brad a lot of the produce that we do is really through the cut of that subsidiary, a lot more than the SRT subsidiary because the poultry piece would help that, the produce not maybe - not so much..

That makes sense. Okay, thanks guys for the time..

Thank you. Our next question will come from Donald Bratton [ph]..

Good morning, gentlemen.

Let's talk about your logistics business for a minute, what kind of OR did you run there and can you remind me what that was a year ago and sequentially?.

Basically, 87-ish type number versus last year 97. So a 1000 basis points improvement, it's been a lot of growth..

And sequentially?.

The fourth quarter - I don't have that in front of me..

They were involved a lot of peak….

It was mid, same 86, 87 number..

Fantastic.

Are you continuing to see opportunity for margin there and for the foreseeable future?.

Yes, to answer your question, the modeling, tell them Richard is there. They are modeling for the next 12 to 18 months, I think it's in the low 90, not the 87 there.

I think fourth quarter does that because of their involvement on the peak side but I think it's more in the low 90s is what I would say internally as bonuses and goals and those kind of things.

Right now as we all know, they are that the asset side as our industry hurts and the 3 PR on the brokerage side because where margins are improving and I think that one day capacity will start tightening up and ELB and all that kind of stuff will put pressure on their margins..

Fantastic. Thank you..

Thank you. Our next question will come from William Nobi [ph]..

Good morning, everybody. I'm a little bit late, so I apologize if these questions have already been asked but I want to look at the DNA to do a $1.7 million bump in Q4 and Q1.

I guess due to weak equipment markets, what's the likelihood with your further adjustments in Q2 beyond and I guess what's the better question is what's a good run rate to model for that line item?.

Yes, good question. It is tied to the used equipment market and what we saw, really starting last July, August - with that coming down so quickly, used truck pricing coming down, it's down year-over-year, something around the 15% to 20%.

Would it start seeing that harden a little bit, we saw a little improvement in January and February, a little bit in March as well. So we feel like it at least bottomed. And maybe start to make its way back up. Equipments moving a little quicker as well for one thing.

So, but to answer your question, I think the second quarter, we're still going to probably be up about a $1 million of depreciation expense over last year. The third quarter, it gets closer to even a little higher by $200,000 to $300,000 higher.

And then in the fourth quarter we believe that it actually should come down year-over-year, it's probably a tailwind for us, down up to as much as $2 million. So $15.5 million dollars a quarter is a pretty good number from $15 million and $15.5 million..

All right, great. Thanks very much. I think I heard about $1.5 million start-up cost of $0.05 on EPS for the two new customers.

Did you also happen to mention the verticals of those two customers around?.

One is automotive and one is in the - it's the organic produce side..

So you're still thinking the fleet is going to shrink 2% to 5% this year and that's terrific.

What kind of - will that include a shrinkage in the team or expedite it?.

Right now we're still seeing growth in the teams, they were up sequentially from fourth quarter to first quarter. We believe we can hold or continue to grow those somewhat leading into the expectation that peak will need those and how demand again based on conversations we've had thus far.

So we don't see that slowing down, we think that percentage will continue to be higher year-over-year. It's going to be on the SRT side. They'll be on the wafer side, that's where the trucks are coming down as on the single side. And primarily related to solo SRT.

But that percentage of team trucks this year was 37%, up from 34% percent last year in the first quarter. We think it will run between 37% and 38% for the rest of the year..

Speaking of preferred, what kind of opportunities do you see as the result of the food safety monetization for SRT?.

I think it's going to - I think for the industry as a whole including recourse SRT, I think - number one, it's twelve months away but I think that the large carriers are already doing 99% of what is required is mostly record keeping and those kind of things, I think at the end of the day as I look at the refrigerated side of the business, we think that the total trucking is very fragmented, the refrigerated side is extremely fragmented.

I mean it truly has 25 truck operations for all major poultry accounts and customers and those kind of things. And I think that they are bringing less of capacity after they build the exiting, just because of this, as just not having the ability or the desire to have to monitor or the possible exposure.

Those are the things that in the next twelve months are going to be worked out in the contract. But it's just another pain in the bottom, somebody ran a 15 to 20 to 25 trucks, do they really want to put up with it? And the answer is they'll be more of them so say no, I don't want to put up with this.

So from that standpoint, I think our large guys are already doing 99% of what's required..

All right and just a couple housekeeping things and then I'll turn it over. Just want to clarify the Q1 gains on sale. I'm showing last year's gain was $124,000 and saw a $400,000 reduction this quarter.

So you're down about three quarters of $1 million, was that correct?.

So it's $251,000 loss..

All right.

And is SRT that are still at 98 or better?.

Yes, it was a little worse than that in the first quarter..

All right. And I think I missed the truck asset OR as well..

The total asset based OR? Yes, that was 95.7 but if you back out the $1.9 million increase in fuel hedging losses, it was about 150 basis point deterioration from last year..

All right, perfect. Thanks for the time. I appreciate it..

Thank you..

Thank you. Our next question will come from Nick Farwell..

Good morning, gentlemen. David, I have a couple of quick questions and I'll have a question quickly for Richard. Can you talk a little bit about teen pricing? Not SRT, just teen..

Yes, just team is what you asked, correct statement?.

Correct, right..

We've been able to continue to move it up but it has flat lined just in the last 45 days. I mean it's up higher but late in the effort over 3% kind of numbers to give you an idea. Nick, we had 2.9 I think in the first quarter, gross, not - consolidated about 2.9. And the team startup is running about 3.5..

I say that is as a manifestation of the competitive environment, I realize that is influenced by the general level of freight.

But are you observing that the competitive number of buts and seats are increasing/decreasing? Is your - are you still gaining share?.

Yes, our expert data continues to grow but I'd be lying to say that it continues to grow but - that the customer is not saying, David, you can't take rates up 5%. To me they are in an environment where their customer is getting a phone call every hour.

We've got to respect that and make sure that we don't put our finger in the customers eye, there on a time bit that we're also wanting his business or wanted to grow in all those kind of things and we are getting some rate increase on that but it's not going to be anything phenomenal because they are getting phone calls from people that will say, I'll try to put two drivers together in a truck and those kind of things.

So I mean there is - when you're lacking freight at the industry, like our industry then people try to get creative, and at least those conversation are had from the customer to us. And then we end up deciding together what is the fair number nearing the environment in which we operate in..

And Nick, I think it would be fair to say that as the quarter addressed, we had put out a number that we expect to get rate increases between 2% and 3.5%, and earlier in the quarter we would have thought we were closer to the higher end of that.

As the quarter progressed and right now, we probably ended up with average rate increases closer to the bottom of that range. So more 2% to 2.5% instead of closer to 3.5% range and that's consolidated, that's not just pain..

So I'm differentiating that between teams and the rest of the business, just given the….

Whatever we end up getting pains will lead that effort..

Yes, are you seeing David or Joey, or anyone could comment. I didn't just mean David but are you seeing any notable changes in regional patterns of traffic? For example; because of the weather in California, finally somewhat alleviating the drought. Perhaps California's mix is a little bit higher, relative to say Texas, I'm just making something up.

And does that have any influence, any notable influence in utilization and profitability?.

I would say that the two things there and all of this - Joey has got some [ph], but I would say the two things that have definitely happened over the last year or so is that the retail customers are use the East Coast more, we definitely see that.

The east coast side of the country is pretty decent outbound shipping patterns now because the ports and that's been transpiring for the last year, year and a half. So I've seen a little change on that. We are used to you - about a year ago, you would have a lot of loads that automatically has 2,000 miles into hole and that stayed.

Freight is coming out of New Jersey, is going to Atlanta now at 750 miles. Yes, I have seen that two things; number one, that will affect, has and will affect utilization somewhat. Own bad is as - I do think it's kind of wear back - I don't think California is going to lose much more of that, I think it's already happened in the last year.

So I think the bad is probably positioned the way it should.

The second thing I would say Nick is that, you are seeing and you're going to continue to see as get closer and closer, you are going to see at shorter length of hall and the reason for that is that there are solo operations today; they have 550 million lift a hall, but January of 2018, it's going to be requiring a team.

If they want next day delivery. So you're going to see, we're going to be processing that, and we already air on somewhat. I think it gets stronger every quarter and it appeals December 17, when it implemented but you're going to start seeing pains running 550, 600, 700 miles if the customer is needing that load next day delivery.

And it's running so low today..

And just one additional thought on that.

In the shift and usage of port, to what degree is that a reflection of their labor issues in California and the broadening of the size of ships through the Panama or is it sort of roughly equal in your mind or what are the reasons for this ongoing shift of freight to the east coast; Houston, Jersey and Charleston, etcetera?.

That's two great questions. One, I do think that say a year and a half ago, when the port started having other issues is that customers made the decision, this is never going to happen again and they took - whatever, 10% 15% 20% of their volume that they decided to change. They probably as L.A.

get better on their - the guys, the contract stuff settled because it is cheaper going into the West Coast ports. Some of them went back without all of it. I believe that 20% of it went away and I think about 10% of it went back but they are having security inventory that they kept it on the East Coast.

But no matter what the cross-difference was, so I think that was one, and then as you get the bigger shelves coming into port and Miami, it's already there from a depth standpoint, and Savanah is getting there for a depth standpoint.

Virginia right now is the one that you can really zero in, I said they've already got it but it is going to have some influence. As said on the board, I did sit on the board.

He no longer on it for a couple of years where the port director of Miami, Florida, which believes that he was going to get a lot of it but he also believed that L.A., Port of L.A. and Long Beach will maintain what they have got and hit the [ph] is part of the growth. Going forward that he will he will be a winner, but L.A.

will not lose any more, just because of their growth..

Okay. And then one other quick question, I'm sorry for taking so much time but Richard, I'm trying to calibrate the various changes you're kind enough to give us in comparing first and. quarters '15, '16 and I roughly have the $0.21 that you announced and then you have the change in operating income, the $2.6 six million that you highlighted.

But you're also at hedging, so after tax that's roughly $0.07. Depreciation, you said 17 yet in reality it was 25, at least when I looked at it, year-over-year..

The first quarter difference was closer to - I think it was 2.5. And that might not be included in the gain/loss difference. Yes, the 1.07 was the depreciation alone. And then it will - $400,000 or so with the gain loss.

But yes, and then I think the other difference was the building coming on versus - the building depreciation will comment on when we bought it back in September or August of 2015. But depreciation on that, and that's what we've said less business rant and more depreciation..

Right..

Last year $2.4 million..

So that would be, if it's $1.7 million or it's $2.5 million, whatever but $0.06 to $0.08, I'm just getting rough numbers, I'm not trying to be exact, obviously. Just to get a rough idea of the change, and then you had of course a lower equity, year-to-year, $0.85 worked down from $1.4.

And I'm just trying to isolate this, I'm not trying to say that is the actual numbers. That's another $0.03. And then if you - so if you take all that together, it adds up to something like $0.16 to $0.18, if I'm doing this accurately.

So on an apples-to-apples basis which isn't the real comparison but it's one way of looking at it, you might have earned $0.37, $0.39 versus last year's $0.56 which is adjusted to $0.36 tax rate, really it $0.36. So your earnings were flat to maybe up a $0.01 or so on an as if adjusted basis..

The other piece, on the $0.56, we had - we took a one-time or discretionary tax item, $0.26 a share. But last year was kind of operationally, our core business with $0.30 a share.

So going down to the $0.21 and kind of one of the way - there are so many ways you can carve this up but one of the way I carve this up is, if I just took out the fuel hedge impact from each of the two quarter, $3.1 million in the first quarter and $5 million - in first quarter of '15 and $5 million in the first quarter of '16, if you back both those out we're around $0.38 to $0.40 a share each.

It was very close, it really didn't back up as much as it looks like, definitely on an operational basis or core base..

And that's a much better way of representing the quarter. It seems to me one way to look at the quarter is to look at the quarter is to look at in that fashion given rather funky first quarter economic environment as you depicted in your comments.

In general to be flat in this current environment, to be it seems rather herculean and I would have guessed at the beginning of the quarter if you thought you're really going to achieve this in the way you've just depicted it, you might have said that's pretty damn good performance in a really unusually volatile environment.

Is that - that's a question, not a statement by the way..

I think frankly, the a core business continue to perform very well. And that's part of what we try to depict in the last paragraph of the script.

But our core business really maintained about the same profitability level outside of a factor that we can no longer control because we had already bought the hedges two years ago and three years ago respectively for the last two years.

And we also know that going forward that those hedges where we have the purchases at - are already - $0.84 and $0.90 lower than this year for what we paid for the same gallons of fuel. And so it's not an ongoing thing, it will continue in the third and fourth quarter.

We have about the same type - we had that catered [ph] in the third and fourth quarter of '16. All three of those quarter should be pretty decent sized losses on a fuel as impact. But then and after that we have much lower pricing on those same number of gallons..

So as a gross generalization, if operating earnings were roughly flat would it be fair to say that the team business might have been up year-to-year and the rest of the business in a simplistic way might have a down slightly, maybe down a nickel, everything not getting team, team is up $0.04, you're flat?.

One of the things we said, if you kind of just look at the freight revenue per tractor at the cabinet subsidiary was up 3.4% whereas it was down 1.5% at SRT and then 1.3% at STAR. So that's a pretty good general relationship..

Okay. And then the last, if I look at the second quarter, I'm trying to disaggregate the second quarter which also had a rather modest tax rate. So you were suggesting $0.28 to $0.33 versus $0.60. If you were to adjust that, that's an incremental, say….

Actually the $0.60 last year had a $0.12 per share, insurance [ph]. We have some of these discretionary type bottom, come through it gets a little complex sometimes. There was $0.12 of insurance commutation that we would not expect to get each and every year.

And it all comes into one quarter the way the accounting rules work, you can't flatten that out even though economically it is. So it was kind of a core basis, operational basis, what everyone call $0.48 a share, and is what we reported in the second quarter last year..

But then you take the tax rate considerations in? You can put it one way or the other, you're paying $0.36 this year, I think last year in the second quarter you also had a modest tax rate, I'm doing that at the top of my head, I apologize. So you add into the higher depreciation, the start-up cost, that maybe $0.11.

If you have a tax rate differential that's $0.15 or $0.16, so you're $0.25 up, really the second quarter might be - if you're $0.28 to $0.30, it might be closer to $0.50 versus a $0.48. In other words, another flat operating quarter..

It's not too far off, quarter basis, year-over-year. If we're able to achieve the numbers of the $28.33 [ph] on a per share basis..

Okay. Sorry for the confusion but I wanted to make sure I understood. There are a lot of moving parts and I appreciate. Thank you..

Thanks, Nick..

Thanks, Nick..

Thank you. [Operator Instructions]..

Is that all the questions?.

Yes, sir, I'm not showing any further question in the queue. Thank you..

All right. We'll wrap the call up. Thank you everybody for listening out and we appreciate your time. We'll talk to you next quarter..

Ladies and gentlemen, that concludes today's teleconference. You may now disconnect..