EPS of $0.35 missed expectations of $0.4376 and revenues of $161.1M missed estimates of $169.72M. Sales declined 2.2% year-over-year, and all income-related line items also declined for the quarter, however, its EBITDA margin remained flat. Its sales decline was mostly due to depressed rates in its US truckload businesses, as well as lower revenue from its Accuristix business due to lower volumes. Its Canadian specialized transportation business saw organic growth for the quarter. Management is focusing on improving the margin profile and quality of its specialized US transportation business, although it is taking longer than expected. This weakness is largely in line with other major transportation companies, and a broader concern of a 'freight recession'.
We believe long-term the company can benefit from secular growth in the healthcare transportation market, but this was a somewhat expected weak quarter. Results are expected to pick back up next year, and we feel it may just need some time to see better results. Trading at 22X forward earnings, for now we feel investors will need some patience and it is in 'wait and see' mode.