YRCW - Earnings call transcript Q3 2018

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Operator

Good afternoon. And welcome to YRC Worldwide’s Third Quarter 2018 Earnings Call. All participants will be in listen-only mode. After today’s presentation, there will be a question-and-answer-session. Please note this event is being recorded. to and conference Controller. like Simoneau, to now President Vice would turn over the Bri I Please ahead. go

Bri Simoneau

Thank you, Operator, YRC Worldwide’s and good morning, quarter earnings everyone. XXXX conference call. third Welcome to

Hawkins, the today Worldwide; on Fisher, Officer O’Connor, and Financial YRC Chief Officer Freight. President us Joining of Stephanie are Darren YRC of Chief call YRC Worldwide; T.J. of Executive

Before in our statements in any we begin, forward-looking I must this remind morning. you of inherent uncertainties discussion

These and format to are of fully forward-looking materially. does and includes make factors. may some statements assumptions federal we the us of statements intentions actual statements securities meaning might to this of law. facts and not regarding allow of regarding call, made all events, this During expectations, on future. the number subject this that statements, within forward-looking and may risks strategies other thus not all on call the a The are differ uncertainty be risk call, historical these This company’s discuss future results of which

full XX-Q. on a yrcw.com. filings, results factors this that to refer and the discussion are items XX-K earnings risk at the release please differ, forms and our most morning’s recent to including our our could SEC website These available cause of For

a Additionally, on a segment to for basis. consolidated please see to reconciliation on EBITDA today’s income adjusted basis income EBITDA release of net adjusted and operating

provide includes overview our by who format quarter the EBITDA. simply X-K is of referenced presentation presentation, we of The will During and conjunction and a with an during available in as EBITDA discuss call may today’s website. from release on update on this Darren In filed this an Freight. morning’s results call. will adjusted earnings non-GAAP refer was YRC who the our be we the The of call an with to will T.J. earnings followed which issued financial along Stephanie release third our measure

available T.J. Darren. I now for a remarks, will over will question-and-answer Stephanie prepared be turn Darren, the the Following and to call session.

Darren Hawkins

Thank you, Brianne, and good morning, everyone.

adjusted million the in nearly we two of EBITDA highest strategies the on at quarter, year. For the improved LTM out the $XXX.X million, the laid continued beginning to our $XX.X reflects execution years, the which third level

to been rentals. on and freight as and increases price our environment evidenced execute saw each in also local all positive Our positive expensive strong of served as the freight X.X% driving purchase to are solid on during mix, protect The continue focus of transportation discipline, catalyst averaging which approximately exiting dimensioners deployment of trends. yield the rate reducing a yield these contractual expansion We has three our segments for while continues these areas throughout our short-term improving quarter. by has progress companies

into Looking strong. trends pricing these October, remain

companies negative consecutive needs the long price excluding to the per slightly are of quarter slightly customers. year-over-year our I band revenue equipment will ensure in our as positive have segment basis, sixth as Freight reported On optimal capacity and feel. to maintain stated meet YRC As a while of of in chain revenue balancing supply in the our our to XXX,XXX prioritize hundredweight its overbuy mix we network, to driver positive we tonnage, past in continue increases

The had As in year-over-year operating income, positive hundredweight, revenue, highest and their increase operating carriers you from hundredweight YRC ratio per in fuel than excluding XX T.J., hear Freight regional years. revenue per shipment, revenue will EBITDA. per expansion revenue reported more in adjusted

fleet compacts most segment impacted one which and away carrier with of hiring of results. regional business However, in profitable America maintenance our footprint with constraints, largest along the a North markets turn driver to was the forced competitive regional negatively to the overall due

and partnerships programs, drive additional have the invested military companies The CDL is tuition fleet recruiting internal reimbursement. resources, including to regional dock driving in underlying recruiting Our always skills, story.

continue first majority improvement we tractors, months in segment the and QX, to for in provided through benefited the more reinvestment our and the operational results. than of trailers XXXX, which Freight progress X,XXX solid have of the on taken YRC nine tractors make We delivery of QX

We delivery our on tractors regional and fourth in offset expect to to carrier take being quarter, are maintenance deployed another expense. which the rise at XXX largest the

with more than year. taken also have be We expected X,XXX delivery delivered another of X,XXX this trailers to

to the new satisfaction while maintenance and a equipment mileage, with come lower generate short-term positive tractors our reminder safety driving rentals of expense our enhance improve As networks. and driver enhanced fuel returns out

of five are in March fifth expires that XX, we agreement the XXXX. a front, labor year the year On

we the which loan separated in of labor the XXXX, day As XXXX the renegotiated maturity July of quarter extended from instrument a reminder of date third the expiration to the our and maturity agreement. largest the debt

have later In early we XXXX. our formally year negotiations, We started executing not anticipate closing, that revenue but yield strategy. occurring in or this while expanded

unfavorable and like thank single incurred everything dedication claim, with and do, to service. for primarily winning third-party would in onboarding line loyalty we a than to adjustments which in maintenance, with customer generally expected higher nearly While they for award XX,XXX new employees first addressed associated significant safety expectations I equipment. we their vehicle deliver our the continued and with of placing

I a over results. comments, now of for call to financial Stephanie review these will With our the turn

Stephanie Fisher

Thank and Darren, morning, you, good everyone.

a compares disposals $X.X Worldwide adjusted billion was a income YRC million $XX.X included an revenue million This of included third On the from reported income million, $XX.X which At the indicate comments billion, third $X.X was $XX.X third key property per period XXXX. to was year-over-year compared of earnings this approximately the financial Freight, This my year-over-year loss operating million. XXXX. tonnage from for the on few growth for Therefore, presentation XXXX quarter the quarter YRC September. keep year. in Freight’s basis, quarter in or was company XXXX, The August includes Operating year-over-year X%. of property third focused decreases down the million statistics. net of day stats. and segment information reported comprised $X.X X%. and X.X% same in will third morning loss Preliminary EBITDA issued XXXX $XX.X release which last for third and X.X% X.X% I quarter which million, up segment tonnage October in X.X% of the is July, disposals down quarter For to in a per results $X.XX net consolidated quarter day of YRC on

fuel X.X% year-over-year per and XXXX, up revenue was including up up X.X% quarter third revenue the including was, per excluding shipment, surcharge excluding Year-over-year fuel revenue fuel and was fuel hundredweight, X.X%, surcharge, For up X.X%. surcharge hundredweight, per surcharge. when

to by truckload decline is the it’s showing decline influenced which a in is first October tonnage largely of tonnage, the note XXXX. terms important for that time shipment, In year-over-year

a to our per trends meaningful our have are While shipments over day tonnage consistent with the XX,XXX XXXX. shipment in impact statistics, quarters three pounds prior

per the segment, September. X%. year-over-year year-over-year stats and quarter the X.X% X.X% in October was in tonnage day to Turning tonnage was third for This year-over-year Preliminary Regional comprised results of for X%. in was down August the approximately day indicate Regional XXXX the down decreases X.X% July, per segment

fuel our up transportation for our expectations. consistent third-party up up surcharge. shipment minimizing was revenue surcharge for surcharge of quarter operating performance For yields the was X.X%. year-over-year excluding was third revenue XX.X% including up hundredweight when Overall, fuel and with X.X% Growing surcharge and hundredweight, is fuel cost. revenue excluding X.X% were including Year-over-year XXXX, per fuel

certain with As for affecting and we manage constraints reinvestment operating as in are Darren mix this, markets. that want capacities noted, to declines to expected to our respect capital to income. fleet networks performance we and our I said our driver volume worked address address freight profitability our Having

on third most on placed which purchased decrease the an side, million progress Offsetting the XXXX, $X $X.X expense On nearly Regional to XXXX, Freight. period same resulted transportation in unfavorable period a for quarter vehicle this as to million reduce our transportation, commitment as in of increase compared adjustments million we positive for service of third-party for equipment, our into maintenance segment went claims an purchased the unfavorable of of XXXX quarter same successfully XXXX. local to rentals the revenue YRC the short-term tractors third of and new in in $X.X resulting in compared our the to executed the for usage in

for relates margin and customer that customers incremental to the chains reflect address the and logistics of for services important costs are increased third-party of It’s customer in, as suite complexities solutions result the expansion provide. services our operating supply a it evolving solution. of we specific increasing existing rebuilds the that in LCL In to our looking these our income, we requirements. business operate logistics our to complete Finally, our note environment that business

a non-union of third YRC the charge during Freight. at of quarter Additionally, $X.X pension we incurred million settlement XXXX,

the the $X from ranging lump quarter fourth million year. the in on for to charge additional of based sums projected an expect We million $X remainder

facility to Moving and XX, September reduction quarter $XX.X cash $XXX.X are million of earlier debt reinvest our third fleet million expenditures. end $XX managed our million at equivalents XXXX during at the Darren’s XXXX of which and of to committed improvement $XX ABL The and end Consistent spent year the capital the in is million a we was third we $XXX.X was from to third approximately million, an liquidity, cash the XXXX. quarter company’s which total under accessibility the comments, of quarter the a is compared ago. on with

YRC adjusted and a equipment new of critical debt quarter XXXX. times, last remains end times capital for with covenant of covenant equivalent of into the adjusted credit a million one closed times. of months maximum at total docks to their of $XX.X location week $XXX.X XXXX, revenue. the or the Freight revenue YRC XX of at Additionally, Harrisburg X.XX Freight. funded for on $XX.X The at operating maximum consolidated EBITDA our two the the X.X we million Recurring This entered through was value leases of X% million Pennsylvania Harrisburg end X.X a for remains was sale facility credit ratio in third to EBITDA of facility. facility the compared covenant

proceeds were from as one proceeds near-term. which would turn to the our gain the managed I the reflect reduce excluded This first $XX sale operations and $XX of this not million Harrisburg property facility required discuss to from at are approximately be However, adjusted our at YRC call operating our the T.J. loan million. fourth are payments now quarter results time, docks. dock. will to Freight. we offered this sale gain remaining EBITDA and The lenders, Net principal At term only have over on approximately due future adjusted that net income XQ a implemented the XXXX, generated in for to continuing will the EBITDA will operations cash enhancements in network on

T.J. O’Connor

obtained with EBITDA, In YRC which customer good contract of adjusted everyone. since increases highest well quarter, overall efforts Stephanie, price revenue, in our the as averaging freight secure income, XX level adjusted our right for reflects Thank X% increases reaching morning, the third the and EBITDA of ago. ratio quarter third year-over-year the at continued operating right business kind XXXX, to We industry, quarter, the you, third reported Freight the in as network. years the strength operating and

levels local short-term purchase transportation, receipt reductions to new current our the improving costs. efficiency and meaningful Our allowed while use maintenance along of in virtually vehicle have eliminating us rentals, make expensive business our track our with fuel reducing tractors of

would last not single which Similar encouraged our earnings which they are claim been We have have been XQ. quarter, our overall third-party if to while stronger in growth, growth the in occurred pounds A, for this of in truckload third force over and secure efforts we market quarter, down business. our to year-over-year tight due to experienced was shipments the sales tonnage with XX,XXX

shipments reminder, overall a truckload of shipments, on the much impact the we number remains in a higher although, XX,XXX the handled small As revenue of excess can report. had a of weight metrics percentage per the pounds shipment meaningful absolute

in hundredweight appropriately and increase in remain statistics. profitable to for the that and to the While impact Freight’s a positive We YRC shipments assist be volume had revenue volume impacting our revenue overall per we shipments then shipment confident on balancing network. unfavorably our tonnage results, also placing the are

made we two-thirds over our received our Stephanie, in have and progress now trailer on Darren replenishing XQ and both for the good by stated As fleet year. orders of

needs and members to to questions be and your all efficiency our their team confident I I each every and will this service, for continued day. forward, happy for would we are any YRC you have. efforts and to our of time well safety, customers’ thank making that on as execution We like our hiring. Looking remain the the improvement. Freight Thanks as meet driver may progress initiatives would continued focus strategic morning. now answer pleased expectations quality, with am remain in of enhancing

Operator

of And Instructions] question from [Operator comes Delco the Stephens. Brad first

Brad Delco

morning, Good guys. Hey.

Darren Hawkins

Good morning, Brad.

Stephanie Fisher

Brad. Hi,

Brad Delco

is -- haven’t most income seen strongest the think I the and that people’s in with seen guess, environments on or were the EBITDA we really LTL I most question or yields improvement think margin just one I have minds the are big of real we I we operating expecting. performance

some So day been but some local third-party we I improvement know the puts earnings the how environment have PT, yield strong can on on on maintenance, on end margin have this of and the claims and there in takes rentals, visibility really driving growth? on at

Darren Hawkins

like will we out yield let are of then proud with described. as Stephanie played start initiative jump Brad, and in piece, we the this is that needed. Darren. has that out I Certainly,

of story mentioned our I certainly the script, the company. underlying is in As, this fleet always

this dedicated a and we there, claim moves XXX have X,XXX proposition tractors tractors certainly YRC with a regional caught lot their is main significant and of what But it than regional all but into in. us of perspective are bring, additional Freight has a us outside From if with would see changing I market other our the confidence that is fleet we and allowed tractor as that brought also the Freight with showing maintenance that and quickly the hiring certainly a value we on and certainly with coming we which the in we that lot the trailer good we the made the is in competitors say the between we focus we some area like correcting largest year insertion we that and of and have up than trailers QX. at good and faster We that’s of you as to mission have older are regional a situation the over got with there as this there doing From they in EBITDA is, difference carrier, of were can. what as networks, a difference. tractors, progress progress the margin, at we had are environment and progress carriers, perspective, YRC speak driver a makes the mentioned the of and

Brad Delco

that? Okay. all you I did know, And Stephanie, to want at don’t comment it on

Stephanie Fisher

Darren’s CapEx is on help to other on that I only thing would the Well, add point just the final is that.

XXXX, of into regional additional are move equipment. we cadence from continue experience quarter we really a purchase maintenance help continue the fleet to at to year, on into the started issues, vehicle alleviate this and Freight going maintenance continue we to As term segment we here with now on additional equipment both we the on any last in the and at transportation handle focus that good got vehicle rentals, that will expense XXXX to short additional in YRC third

you that a as well. this as will see XXXX be continue into will move we cadence So to

Brad Delco

base touch something just I to you Okay. Stephanie, want And on then, said.

a be million EBITDA? from quarter not excluded gain in would You be adjusted and that said fourth would there $XX

Stephanie Fisher

Yeah. That’s correct.

our an from term have operations EBITDA of properties fourth loan property gains definition will are and calculation it quarter. the so continuing that losses exclusion, So our in adjusted part therefore, to be of according not adjusted EBITDA and

Darren Hawkins

two that pressure facility sort We separate at additional XXXX you single remember did just network. in standpoint inefficiency then was into when that of from some further in operating detail and YRC and the a Pennsylvania went and that one And on facilities Harrisburg. to enhancement of docks. the centers about Brad the opened the relieved elaborate back Freight’s congestion network little largest Harrisburg with we

use the efficiency operate still in larger we of Harrisburg. out and also We gain dock that at

Brad Delco

Okay.

think get it me I I for back queue. but now, in will guys. from Thanks that’s

Darren Hawkins

Brad. Thanks, Hey.

Stephanie Fisher

Thanks, Brad.

Operator

of The will from next come Scott question Group Wolfe Research.

Scott Group

Good Thanks. Hey. morning, guys.

Darren Hawkins

Good morning, Scott.

T.J. O’Connor

morning. Good

Scott Group

far a you we have is say, too that we price sort need level we tonnage So, where of hey, there gone down tonnage and soften X%? have on to because can’t

Darren Hawkins

when but consistent narrow stayed was shipments in played that have recapitalization the category, seeing we I Yeah. truckload decline our the with the plan. in we we and that what year with especially bands was have been larger tonnage than talk the about certainly at what throughout look where October, When out been

overbuy. going We to price are continue to prioritize

Scott Group

LTLs And tonnage, tonnage some slower tonnage in leads October so to slower are have there, obviously increases think you report seeing of they to really now? for do of right when that point pricing some three are good weaker we sustainability these had far, got worry so you pricing all about to start slower at is LTL, have get

Darren Hawkins

we week hasn’t any. four fourth the years been Certainly peak where that the second got feel see week in exposure largely quarter, us our that’s pricing same we the QX, have the up November case years second discipline in with of I see with in or front we led for that through our strength December we We the about play. of October saw e-commerce. last in in to good at, are what’s five increasing the that the

side of dimensioners, lot LTL still quicker, very are those the the firm shipments are full for would the second we that that I because of in year, have have of much just it’s second of foot of decline such us. half shipping the to rolled actual the right look from through at earlier me negotiations consistent we -- way see our year. addressed we we this as now to we comes with confidence the away view with cycles the think got all I When a per clear and in volume of also the majority networks know feels stay planned It we bring in business half that our deployment our large a of that the we done pounds the and past next of pricing much contributing as customers. new we that like gives cubic the moving it business whether able in

Scott Group

about think LTL I traditional your away better -- or freight higher this or LTL margin lower going freight? sort rated truckload of than When Okay. business this Is again.

Darren Hawkins

shipments weight heavier a efficiency. margin, our they the on and we are Typically overall our in network because contribution nice to high those movements handle with have come we pricing lane based empty

as has So basis. carrier, spot truckload a on in our that. statement securing tight contribution making successful positive his loads At as in and when the is was it national nice point even the typically was are it a not makes just those T.J. been, we market

As the we have our customer a customers activity our markets on provides doing network. high and of daily which with we typically have on very number nice got quoting to basis, with business value level the companies, spot is a complement of to a our

Scott Group

if freight that, but So, where we think mid of -- year just big next in margins a single-digit single-digit mid will is decline year is with my at that yield tonnage, improve? picture environment if you

Darren Hawkins

YRC launching same plan are am with a is play haul a excited them. big confidence these just quarters our injection like just always really out about I in underlying am of cadence, on networks long about area to now that. in of gives difference the What we YRC Brad and what and freight Stephanie mention that’s the the really that story I the on we the position fleet and right it XXXX. I and and two stay going I doing Regionals that number being equipment, with tractors underlying into lot to next makes Freight with when the over seeing game see the of at the me mentioned story as is are that to at fleet for going the large that

Scott Group

anything that maybe if at do potential shot like Why to to there union labor Are the way, just there it’s unions Freight. you you moving to want with have just some around the is think another at disruptions deal and are going move, move first you sort customer to business carrier, hearing from the that do of so about moving that is you’d to you customers your Okay. to business think UPS about business don’t business? going talk want

Darren Hawkins

back summer be seven is movie changed October in before the this what’s get are because the seen going carriers -- is aspect, the specifically the the vacation, to after and typically a when the will last one LTL us month used that. reset timing employees with get so efficiency of go we won’t from get I way involved, I their specifically the typically we case, is running industrial peaks our say have for a we you on October on an longer last some in modern are changes and a October, year, certainly, all good now e-commerce level smoother. Well, have years to October no comment that economy there. and of from or times, really good set, after get much networks the where years six opportunity networks back in to into overall

So even there’s capable from what aspect at Worldwide network our in and their is largest are some current they about tonnage. shipments mentioned of YRC I and additional regional a timing handling carrier, capacity

I position it in to to week when handle is, in, are if a were the be that. companies to position YRC normally than we the decent if there Worldwide are busier at be, So were next look

focus lot a short nothing trailer of say network with philosophy, a pricing our our perspective. on our from term will changes bringing I tractor not Now and into rentals

not disciplined in rentals. that to There’s am our will around ourselves network area. We short-term give be and been willing expensive that nice back. last to I such not very quarter exposing progress

Scott Group

concessions your past Okay. goal additional the winning share goal about about And or if concessions? prepare from one for is negotiations. you of any quick we think deals is the are last Should just just sort maintaining the as then labor insights for real me, more prior just that willing, you

Darren Hawkins

the address about allows this it naturally, year will the I that late script our early talk comments actually we beginning publicly anticipate either beginning only we Yeah. am and through brought can publicly. time go we me I you say and at beginning, glad those next while said or year. what that this And address process with not I is of negotiations what up, that’s in it to something the

Scott Group

Okay. Thanks Appreciate a it. lot for the time guys.

Darren Hawkins

Scott. you, Thank

Operator

come from Ross And of David the question next Stifel. will

David Ross

Good morning, Yes. everyone.

Darren Hawkins

David. Hello,

Stephanie Fisher

Good morning, David.

T.J. O’Connor

Hi.

David Ross

So XXX the in equipment. what’s next -- on tractors quarter, biggest you Darren up mean side, expected quarterly back per same to the know going so Does cadence that is added XQ, would that keeping that year? be you be in the on equipment mentioned about it the delivery

Darren Hawkins

will let that address I Stephanie David. one,

Stephanie Fisher

Yeah. Good David. morning,

look we about both that give As CapEx, the it’s Freight will plan at about our size YRC YRC taking are XXXX and their sure a the to of we companies, at take network. Freight quarter or $XXX the gets for diligent regional more due trying to making obviously, and be be just that

David Ross

of in the And do length have you the quarter? haul

T.J. O’Connor

Hey, morning. T.J. It’s David. Good

So length miles up XX haul for versus quarter to X miles XX to miles. miles, the XX it year-over-year, XX of miles was

David Ross

have we And efficiency a you for go you Quintiq to to talking the come, the that? Darren, been seeing in been to of seem and back I have guess, the that couple do if gains about could a hold ups? be where lot the stand of out that Optum IT and don’t benefits there on roll years, the if You

Darren Hawkins

standpoint of have from lion’s the don’t YRC Freight it our operating Yes. That and in companies, we that technology as year but expensive have throughout local Great standpoint, delivery YRC in eliminating will their and to transportation. and of companies say pickup will a network individual not presence share that on at but was and reminder progress Quintiq T.J. the that’s especially not a one as at let with terminals end with Optum’s investment for that. VRC just comment on the that everyone, the also and to have YRC internal also freight a out T.J. floor able by report Optum and Quintiq technology only regional part pickup XXX purchase regional we each company, on the even individual of focus aspect up Freight, that we facilities. QX, Freight that an I will running though From success, I and Freight. the between been -- do close interchange we expand the also as is just question. and the on a we installing with delivery other metrics, on at been whole then from a

network. we have the plan individual just across ability the got now So network to that entire not an for

those both share a comments as moving nicely positive see will benefit. seeing QX. that the T.J. I VRC exposure few let Freight lion’s the he in So in make a

T.J. O’Connor

Thanks, Darren. Yeah.

is unique requirements into of XXX implemented document even simultaneously or location account. all We have by David, while say that work rather understand a I the sequentially to off-the-shelf labor those we so installs to locations, it deploy have unique install up each requirements close So, so would take year, is to that, and can this end intensive customer XXX to to will be by of we application. across don’t an solution, standardize, and we plans that

size it, naturally -- are I XXX year, of the We close end fuller on those to by terminals we say nice the terminals. progress when, into that making are are

impacted So next we operations by year and some our we of this larger see will -- are technology. into getting

of we -- as we so as not larger have that us now, it has get we just some efficiencies, -- confidence go more we given what see seen will obvious facilities. far into the be And forward but will as and

David Ross

this you the anymore going at you the YRC of today, read year, about the are is were doesn’t obviously. beginning up and Freight? on than today opportunity like what’s Darren, at And the stocks margin what encouraged Are XX% somebody Thanks. they

Darren Hawkins

Yeah. spoke we made what about. non believe outside the that of YRC Freight a, were see we is they that I in an they progress unusual specifically, QX, what I like event

and a Freight. is Freight YRC an I position for think a in stronger very been from equipment holdup a big aspect really that’s they and position are good in YRC

the We XXXX gets injection it aspect, position from enhancements much have the worked Freight into of way. have the Regionals of that Regionals half the the also in operators contributed we and well corrected got that second good network a with YRC end the at the network. place, in coming an similar see positive into XXXX very and equipment in good made a that’s is equipment there the of but at got quicker news I

the I sit, think stand about are toward and our that a changed we been year thoughts our our still second half to in financial is performance I position where the and this about haven’t statements good by from we earlier we QX. that talking weighted So of the have we show progress year

David Ross

you. Thank

Operator

Amit next Deutsche question comes Bank. The from Mehrotra of

Unidentified Analyst

Seldon It’s guys. Amit. for [ph] Hey, on

Stephanie Fisher

Seldon. Hi,

Unidentified Analyst

give us an just Could you on update tonnage fronts? your monthly

Stephanie Fisher

Yeah.

quarter a just full October? do third for or want So you

Unidentified Analyst

to well. guess and I as September date then October

Stephanie Fisher

Okay.

for for X.X% to X.X% Freight October down approximately YRC projected projected to X%. segments, the So was September be down X%. September is then October down regional And in approximately and be is and

Unidentified Analyst

earlier you tonnage the weaker still I you or seeing are what are and And Freight business comfortable? and in that a of where Regional, that think managing feel plus both we kind than YRC range are or like October growth. is this you bit minus and comfortable a managing Okay. in September, by the that mentioned little Is like you comfortable

Darren Hawkins

of were are capacity that QX, efficiently additional the in with Certainly, the standpoint, Yeah. capable the where and mentioned running also look have. of earlier, you for we have even but we from our networks early I that at counts in as time health the where constraints this we of Thank I we is a some a shipment from capacity network though when year questions. we am are. comfortable And aspect I the do shipment available

network to out about I situation on purchased in keep fleet the and equation transportation of will out said continue efficiencies the of we go. the network, of what the and and the So from as rentals the expense equipment side of keep gain have the these the new pricing focus our local we

Unidentified Analyst

Okay.

a give what how us and So you like freight profitable are with of your could you more smaller sense is pushing of accounts? some demand actual much away underlying the

Darren Hawkins

the customers our North of across we relationships a When It we you and from that aspect, then about the company. long-term big XXX,XXX us be. us do customer puts Well, also that’s advantages with, customers one America. want facilities right where XXX think our have the of to business

unique direction across economy and our marketplace, We certainly success has they the like but of a than do I value the and of to ours, has driver an more to career. gotten this and the truckload into contractual that, placed will situation in always the on standpoint, shortage lot economic that. year LTL, continue a believe in into driven that’s my before think businesses I plays of think ever bring the this tremendous I of amount and service-related marketplace the From capacity LTL negotiations.

stay with us maintain I price think our that strategy sufficient just that volume a over the things and volume of mindset. as cost keeps our manage we on consistent for to side networks we prioritizing conscious

Unidentified Analyst

a in bogey or terms you back a any need to back given like All but on to right. helpful. come there is online, just growth of That’s to And operating in fleet growth come number meaningful leverage? the looking seeing bringing of year, replacement guess, tonnage improvement out -- hit start volume really I is update and see kind like you there of next then, tractors are

Stephanie Fisher

So averages perspective, Industry operating on to of we range. need of X% that to from that X% in normal a revenue. that cadence X% X% continue just tractor to

a tractors from So we Most be will industry by there just find is not that and we that would of perspective. capacity a can trailers of trailers. growth, networks today replacement each of tractors additional growth the and really in and be on bringing but bit the ahead

Unidentified Analyst

Okay.

equipment meaningfully when pass, coming new online replacement So will translate just I will the start definitely, see like margin we I to start to that improvement? guess I into the,

Darren Hawkins

that the lanes go the we XX% is there efficiency improvement tractors Those and immediately. into go QX bring in a when Well, and into there’s service in risk. they are, Freight, tractors YRC no execution longest saw we at on,

these comes on every the will at the that and that all quarter So of drive with benefit those it improvement quickly areas. we cadence staying have done in year this previously pace

Unidentified Analyst

has wrap year. a give of changed change Okay. numbers kind of Could sense year maybe your maybe how fleet give should up trended that you this will and you next just sense over just average a this on that the just give and how of and if specific us want to age us don’t up I how of this, it’s

can your fleet? meaningful replacements like terms these of Just, so in how are entire really we understand

Darren Hawkins

overall will But I don’t the say comment networks. average, like. than in We our Yeah. we that certainly it’s would line-haul we on progress older making are

delivery. that the a of tractors used and in are got segment We have pickup

We that that have pickup, line-haul delivery both and our a use and dual set are segment got in a specifically. operations got in are of tractors used are we have then tractors of line-haul that

a years getting on of newer. miles tremendous most percentage of tractors that have company-owned we three those replaced that we and as are We or miles the exposure progress amount a the made equipment the quickly to that’s overall run have

Unidentified Analyst

questions. Okay. Thanks for the

Darren Hawkins

Thanks Seldon.

Operator

question from Loop Jeff Capital. of comes next The Hoffman

Jeff Hoffman

Hey. very Good you much. Thank everyone. morning,

Darren Hawkins

Good morning, Hey. Jeff.

Stephanie Fisher

Hi, Jeff.

Jeff Hoffman

the question and and Quick I quarter? what’s tax about for the a I morning. should for right noise Darren for TJ. Stephanie if and for look quarter effective couple Stephanie, quarter the in be third that through thinking rate Good fourth then

Stephanie Fisher

Yeah.

our expense rate. state So from is which a foreign and don’t impacted perspective taxes rate tax by quarterly tax tax affect our obviously

for is normalized rate that we the something having about probably think think we taxes as I will state that us have. foreign we with not we a have that and the NOLs have tax

So, unfortunately, I doesn’t from without a can’t number, but rate a giving normalized you us. for perspective you give tax probably exist really that forecast

Jeff Hoffman

Okay.

and the If fleet move maintenance many you to on Freight, and total look me Let the now? the how both trailers I fleet right and YRC across the then. in approximately do tractors have regional

Stephanie Fisher

tractors and XX,XXX trailers. have XX,XXX We

Jeff Hoffman

me maintenance whether an its put per Can maintenance as in vehicle let’s or for a sixth get perspective your idea year, in trailer you just in look say expenses help can it or first understand I a or expense versus help to for And fourth truck per say year it you magnitude and its can right. year metric or so what is right. truck expense differential. maintenance vehicle you say All its me seventh of versus want of think at you compare mile whatever

Darren Hawkins

I The expense there a we go have and almost return, we we of Jeff, share Regionals, the at XX% happened YRC in Regionals as maintenance leased tractors, as to that’s gave, getting replaced I we opposite Stephanie from Freight the since it the year, are to maintenance share a mentioned perspective, QX. nice Freight perspective, down. they lion’s continuing a as XXXX, trailers. and XXXX same throughout have of can this their YRC and that -- you XX% from since got speak. what numbers is with those know tractor trend the my the see transition those unit very saw even expense perspective a progress lowering XX% tractors expect -- from to of That tractors the

Jeff Hoffman

to getting it, a of a Maybe different way miles XXXX, six to your less the that of is it XX% XX% you safe if still are ask gallon? to replace say tractors XX% than tractors since

Darren Hawkins

don’t into that argue the We I when at in comment you per category would and Jeff. majority delivery those and of local miles age argue actual what the that but fuel I not -- that gallon, on being get would of operations, the pickup all, point not

Jeff Hoffman

the changed you all? still you is were And at Or of nameplates you previously? new truck that equipment, the -- have same buying in as Okay. brought are it you models

Darren Hawkins

some we strike Volvo that and several got -- and go beyond pieces. of Kenworth, we Well, OEMs, we use Freightliner, our other on we have even trucks use Peterbilt,

mix to the we in expense consistency our certainly have maintenance internal ensure have the number in different a there. direction and we account having fleet maintenance board. group across not good We good take round are of that a So the large into grabbing we by and pretty not got we do have models

Jeff Hoffman

Well, Okay. much. you very thank

Darren Hawkins

Jeff. Thanks,

Stephanie Fisher

Thanks, Jeff.

T.J. O’Connor

you. Thank

Operator

have Willard question Milby Global And Seaport next a from Securities. of we

Willard Milby

Hey. Good morning, everybody.

had of touching Just kind Scott where one capacity, on was going. on

long available that network? see as to it, UPS sense go is they is kind their it, sense? strategy like in disruptive is it’s incremental Can it this today do of freight network, lasting after -- event tomorrow You mentioned stopping wise long surge like Is the on or as Does across flash pan? of of freight Is as you make the a at like there is freight of that? from makes maybe pickups comment you that, of worth? what your capacity for than more look haul or you I kind believe. an

Darren Hawkins

I short like a hurricane network a will there’s a where a exposure a comments, will shipments weather regional have you and few that here make very situation become I let any comments. along that make got has T.J. in few the yes, of come disruption, time impacted, or of lot time. be this most and YRC Certainly, may period one in things Well, Freight the available

from come and existing go that on there have terminals through We individual pieces. a that other and process capacity to we make and then us request, goes depending it customers priority at

have YRC for this doesn’t and So make time. will sure work we through make very it operations long comments specifically a I event do let T.J. a through go disciplined period disrupt that around we appropriately process Freight. to of our

T.J. O’Connor

are that customers we to so currently and Thank capacity, would really our that a two hierarchy the had week we this to or And for for, you, existing we accommodate and opportunity our our be us. Darren. Well, out operation a going of inside certainly, degree recently. unique would what judiciously with can. It’s look certainly, to beyond of how have still don’t the commitments a we ask week use those include hierarchy to give additional customers not then, approach, few honoring going inquiries respectful capacity are would them, we that that we a corporates relationship to for a from turn

situation we our are that got and with we is longstanding So to in to help will how customers capacity work for honor opportunity we there have them setup on and to we there use a creates going that our own our opportunities hierarchy disciplined in to But we can, each any hierarchy a going is really relationships, us. as are conjunction merits. a new its analyzes approach best

Willard Milby

have volume is a presumably there that All guaranteed. you And right. at certain commitment prices

customer if what agreed at much more that above comes to how and more volumes, incremental is already a top say, of pricing, beyond they was the Assuming the go hierarchy upon? you with

T.J. O’Connor

anything we Well, get market, to Yeah. don’t it this that, make you I really that tell would sense but do into irrational. in doesn’t

Willard Milby

ability with a picked that here constraints anticipated XXX the be guess picked up QX tractors up tractors and was trailers bring constraint XXX tractors actual QX, that in the in looking network. limited there and pickup one then Or intentional? the additions? remaining a of any supplier kind into looks QX. equipment, anticipated QX bring And that from Was tractors, Okay. in with XXX there the new XXX the those like has I a Was in is limited more there the been QX. to the your to of on those It actually more pickup may supplier

Stephanie Fisher

Yeah.

in I quarter think and the quarter. got second placed were and few a that’s for just we year first orders our quite the way the

just from were the for constraints placed no it’s the way OEM. the year, orders the So

Darren Hawkins

and appear of that Yeah. point, tractors of at at the half the timely. I the the we drivers ran tractors add, from not beginning the getting networks into has and -- second the will we use to be actually delivery some retrieve the early our but Their of to been case year. are beginning -- that year in operating well, the the

Willard Milby

All I right. time. Thanks appreciate color. for the the

Darren Hawkins

Will. you, Thank

T.J. O’Connor

Thanks.

Operator

remarks. This the concludes the conference for to like back to over company question-and-answer our any I would turn closing session.

Darren Hawkins

us and again you. may to Please any Operator, This contact that our call, call Operator, you joining everyone with today. the follow up have. and concludes for am Bri to you, I questions thanks Thank back turning

Operator

attending for today’s you Thank concluded. now has conference presentation. The

You may now disconnect.

Yellow (YELLQ) 1 Nov 182018 Q3 Earnings call transcript