![]() Earnings Conference Call – First Quarter 2014 April 30, 2014 John Wiehoff, Chairman & CEO Chad Lindbloom, CFO Tim Gagnon, Director, Investor Relations Exhibit 99.2 |
![]() 2 Safe Harbor Statement Except for the historical information contained herein, the matters set forth in this presentation and the accompanying earnings release are forward-looking statements that represent our expectations, beliefs, intentions or strategies concerning future events. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience or our present expectations, including, but not limited to such factors as changes in economic conditions, including uncertain consumer demand; changes in market demand and pressures on the pricing for our services; competition and growth rates within the third party logistics industry; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight, and changes in relationships with existing truck, rail, ocean and air carriers; changes in our customer base due to possible consolidation among our customers; our ability to integrate the operations of acquired companies with our historic operations successfully; risks associated with litigation and insurance coverage; risks associated with operations outside of the U.S.; risks associated with the potential impacts of changes in government regulations; risks associated with the produce industry, including food safety and contamination issues; fuel prices and availability; changes to our share repurchase activity; and the impact of war on the economy; and other risks and uncertainties detailed in our Annual and Quarterly Reports. |
![]() 3 Q1 2014 Results 2014 2013 % Change Total revenues $3,142,585 $2,994,267 5.0% Total net revenues $457,235 $455,722 0.3% Income from operations $156,971 $168,706 -7.0% Net income $93,187 $103,343 -9.8% Earnings per share (diluted) $0.63 $0.64 -1.6% Weighted average shares outstanding 149,008 160,690 -7.3% Three months ended March 31 in thousands, except per share amounts • Weather impacted our Truckload, Less than Truckload, Intermodal and Sourcing results in the first quarter • Results improved significantly in March • 2013 share repurchases positively impacted EPS in the first quarter |
![]() 4 in thousands 2014 2013 % Change Total revenues $3,142,585 $2,994,267 5.0% Total net revenues $457,235 $455,722 0.3% Personnel expenses 220,297 212,645 3.6% Selling, general & admin 79,967 74,371 7.5% Total operating expenses 300,264 287,016 4.6% Income from operations $156,971 $168,706 -7.0% Percent of net revenue 34.3% 37.0% -7.3% Summarized Income Statement • Personnel increase driven by average headcount growth of 6.1% in the first quarter of 2014 when compared to the first quarter of 2013, partially offset by our variable compensation plans • First quarter 2014 ending headcount was virtually flat when compared to 2013 year end headcount • SG&A change largely from an increase in our provision for doubtful accounts Three months ended March 31 |
![]() 5 Transportation Results Q1 2014 • Transportation net revenue margin compression of 90 basis points in the first quarter of 2014 when compared to the first quarter of 2013 • Transportation net revenue margin in March 2014 was virtually flat with March 2013 2014 2013 % Change Total revenues $2,803,704 $2,603,182 7.7% Total net revenues $427,879 $421,252 1.6% Net revenue margin 15.3% 16.2% -5.7% Three months ended March 31 TRANSPORTATION in thousands TRANSPORTATION NET REVENUE MARGIN PERCENTAGE 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 17.8% 16.8% 17.4% 18.3% 20.2% 18.2% 22.6% 17.4% 17.2% 16.9% 16.2% 15.3% Q2 15.9% 15.4% 16.3% 17.1% 17.9% 15.4% 20.6% 15.8% 16.2% 14.9% 15.3% Q3 16.0% 15.9% 16.3% 17.5% 18.0% 15.9% 19.8% 16.6% 16.4% 15.6% 14.9% Q4 15.8% 16.0% 15.7% 18.3% 17.7% 19.0% 18.3% 17.6% 16.3% 15.8% 15.0% Year 16.3% 16.0% 16.3% 17.8% 18.4% 17.0% 20.2% 16.8% 16.5% 15.8% 15.3% |
![]() 6 Truckload Results Q1 2014 2014 2013 % Change $269,837 $268,604 0.5% Three months ended March 31 TRUCKLOAD NET REVENUES in thousands Quarter Volume 3% Approximate pricing * 10% Approximate cost* 12% Net revenue margin North America Truckload Year over year change *Pricing and cost measures exclude the estimated impact of the change in fuel • Total Truckload volumes grew approximately four percent in the first quarter when compared to the first quarter of 2013 • North America Truckload price and cost per mile were impacted by market volatility and a change in our freight mix • Significant price and cost increases in spot market transactions • Increased mix of short haul freight which has higher price and cost per mile • Negative loads (shipments that result in a loss) increased significantly in the first quarter of 2014 when compared to the first quarter of 2013 • March 2014 North America Truckload net revenue margins were flat when compared to March 2013 |
![]() 7 LTL Results Q1 2014 2014 2013 % Change $60,138 $58,491 2.8% Three months ended March 31 LTL NET REVENUES in thousands Quarter Volume -2% Pricing Net revenue margin LTL Year over year change • Net revenue growth rate slowed in the first quarter partially as a result of weather • Net revenue margins compressed slightly in the first quarter of 2014 when compared to the first quarter of 2013, primarily due to carrier price increases |
![]() 8 Intermodal Results Q1 2014 • Widespread weather events had a significant impact on the first quarter Intermodal results • Net revenue margin increase was driven by improved customer pricing • Intermodal volume declined in the first quarter of 2014 when compared to the first quarter of 2013, primarily related to less available equipment and extended transit times due to slowed equipment velocity 2014 2013 % Change $8,940 $9,101 -1.8% Three months ended March 31 Quarter Volume -6% Pricing Net revenue margin Year over year change INTERMODAL NET REVENUES in thousands |
![]() 9 Global Forwarding Results Q1 2014 Ocean, Air and Customs 2014 2013 % Change Ocean $43,612 $42,488 2.6% Air $17,454 $16,768 4.1% Customs $9,332 $8,606 8.4% Three months ended March 31 NET REVENUES in thousands Quarter Volume Pricing Net revenue margin OCEAN Quarter Volume Pricing Net revenue margin AIR Year over year change Year over year change • Margin compression in our Ocean business due to market volatility and strong competition, offset by volume increases • • Growth continues in Customs driven by increased volume • Systems integration an ongoing initiative in 2014 Increased volume from integrated businesses continues to benefit our scale in capacity procurement in both Air and Ocean |
![]() 10 Other Logistics Services Results Q1 2014 • Other Logistics Services net revenues include transportation management services, warehousing and small parcel • These services continued to perform well driven by new customer implementations and global volume growth • Transportation management services leverage our Navisphere technology platform 2014 2013 % Change $18,566 $17,194 8.0% Three months ended March 31 NET REVENUES in thousands |
![]() 11 Sourcing Results Q1 2014 • Continued volume and net revenue decreases from a large customer; impact will continue throughout 2014 • Sourcing net revenues and volumes were impacted by weather, a lack of product availability with some key commodities and market volatility 2014 2013 % Change Total revenues $335,808 $387,852 -13.4% Total net revenues $26,846 $31,846 -15.7% Net revenue margin 8.0% 8.2% -2.6% Three months ended March 31 SOURCING in thousands |
![]() 12 BALANCE SHEET DATA March 31, 2014 Cash & investments $142,813 Current assets $1,823,082 Total assets $2,960,168 Debt $910,000 Current liabilities $1,380,489 Stockholders’ investment $981,597 Other Financial Information in thousands • 2013 cash provided by operating activities impacted by tax payment of approximately $100 million on 2012 gain from the divestiture of T-Chek • Accelerating revenue growth during the quarter drove increases in working capital • Impacted net cash provided by operating activities • Impacted share repurchase activities • Total debt balance of $910 million • $500 million, 15 year average duration, 4.28% weighted average coupon • $410 million drawn on revolver, 1.65% current rate CASH FLOW DATA 2014 2013 % Change Net cash provided by operating activities - actual $14,440 -$58,050 N/A Capital expenditures, net $12,595 $10,177 23.8% Three months ended March 31 |
![]() 13 A look ahead • Truckload market conditions remain difficult to predict • Our North America Truckload net revenue margins in March and thus far in April 2014 are approximately flat with last year • Our existing headcount is adequate to execute our current growth initiatives • We will continue to monitor and adapt to the market conditions |
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