YRCW - Earnings call transcript Q2 2019

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Operator

Good morning. And welcome to YRC Worldwide's Second Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there'd be a question-and-answer session. Please note this event is being recorded.

to conference like Ms. over now would turn call the to I Simoneau, Controller. President Bri and Vice ahead. go Please

Bri Simoneau

Thank you, good quarter operator and XXXX Worldwide to earnings second YRC conference call. morning everyone. Welcome

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

facts, statements securities are does risk and forward-looking subject some The and other a discuss During allow this to differ laws. within meaning of factors. results be format fully number These of these may not forward-looking of call, therefore, not might call, that materially. uncertainty statements of may federal this which risks us all the statements and make on call this historical we made are to actual all

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

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

was which may presentation, we our Web in will In EBITDA, an simply be available conjunction release, on non-GAAP during refer as filed call, and this a the measure earnings referenced During call. EBITDA. we X-K release, with our to of site. presentation The issued is adjusted along today's with the earnings

by will an plans, quarter of provide morning's including be financial provide an second the strategic overview multi-year operational update Darren Stephanie, results. this by will will to call of T.J. initiatives. our provide format who The current on then initiative, followed the company's lead

and be will answer and session. Stephanie for remarks prepared able question Darren, Following T.J.,

Darren. call turn to now I'll the over

Darren Hawkins

runway labor which in good our QX, The quarter believe foundation the have XXXX second for the the for and of in earnings middle Thanks to for multiyear you, we agreement, Thank our successfully occurred morning one I of call. number reset provide Bri everyone. strategy. priority joining XXXX. our our was ratification

However, date April and costs labor financial basis wage the points operational vacation with effective us X of the performance. benefits, agreement the for several combined benefits, which timing XXX delayed of

These hesitation, not agreement results labor waiting demand. a along ratified are reflect with muted unexpected and customer while fully for

and experienced the the was Fortunately, customer with our now to have way ratified paves in the concern clean to of strategic a in the of agreement, QX five-year for $XX million pain XXXX. announcement transformation The removed expansion the execute million runway labor we plan. expected margin $XX

and other moving forced while with company softer, as compared not have are to July situations when Concerning transportation are sluggish the been entirely the appear tariffs, overstock trends the economy to were I supply to tonnage and volumes trends, them still faced suggesting be chains year, market the XXXX, more freight in inventory. the that prior direction. by U.S. conditions am right in Transportation sync. economy that encouraged negative

coordination. consolidations. for In back have headcount initiated and QX million operational to makes upgrade approach annualized over companies, several the our Cost reductions those as to stabilize years recently it $XX in in the methodical and very Moody's current run our well sense been of are have rate We a with family through office reductions always company a underway engagement of highlighted. last customer

people. to We facilities and with will continue equipments, efforts consolidation efficient to more move our our with rapidly our be

forward QX, our beyond clear. is look path we As

company. focused profitable We our of on of deployment truly are multiyear strategic earnings power plan the rapid to demonstrate the

structure next steps the changes, With clear and continued of of runway, contract the investments optimization, five-year the plan implementation that a that hurdle in and way, customer capital growth. step first labor The capital the the out operational flexibilities. are and was network

with Network our no density capabilities optimization power companies. brings of there three footprint regional freight best-in-class scope our across each in of is property asset value size, and customers Make basically based the driving to America. brands is endless mistake, in full then our having anywhere and LTL utilization as four the marketplace, and YRC companies go North unique to Freight in asset

As companies across the achieving having at brands, work expanding be any revenue by in intentional also individual holding closer company, in the available in YRCW will efficiencies the coordination. but

of And leased for XXX properties scratches centers expected we consolidation near approximately XXXX, just centers have approximately XXXX. approximately generate the proceeds to in of the projected disposition the additional term identified the $XX cash million this by We surface. end The these of believe of year. our bringing December by are XX to service the by service and end early owned

As this of at we The reducing while customers. network, efficiencies, an are equipment, potential also throughout efficiencies YRCW. equipment and is our same we to opportunity proposition repeated resource and on build the miles, value will by time, our capital continued reducing network, needs investment is our with opportunity for customer expanding improve density benefiting gain from service burden rapidly exciting our our

covenants, for engagement. in strategic strategic The at are extended always maturity. offering and is taking our top care service simplified Creating reduce of growth, growth part an interest great plan on step our critical replace list. the to focus engagement pursuit a of increased and customer existing term-loan provide of next alternatives to the customers the financing less customer the Concerning is rates long-term our of important new restrictive and

announced doing our as enterprise YRC the buy growth, of contact to to consolidated Penn, from recently Customer sales additional a This We a from distinct a perfect Freight. point team addition the Logistics while single of YRCW, see continue tough that business existing to to HNRY Reddaway teams organization. the brokerage allows a are environment. services LTL HNRY is Holland, Jason and introducing of Logistics and currently national customers with. of even group sales to proud companies Bergman double-digit complement Chief New regional, I'm not as operating at they four at customers they of the Officer, revenue and sales in restructuring competency

of of the core it directs. taking customer want, the Inclosing, then understanding customer, our the when what they where business great and delivering is care

We behind of latest have it and ready a always it team will a to people and the go, truck make technology to simple easy.

I will share turn to some over Stephanie results. details financial call our to now the around more

Stephanie Fisher

Thank you, morning Darren everyone. and good

in consolidated $XX.X compared $X.XX to of prior YRC XXXX. for For or second of quarter income the year. from billion, operating which down was million second to of quarter income second is XXXX, reported million revenue when billion X.X% compared quarter Operating Worldwide $X.XX the the $XX.X

reported the of for XXXX quarter to for EBITDA million company adjusted prior compared $XX.X the Additionally, year. second million $XXX.X

in XX For X.X%. XXXX, million slight months, $X.X was million to or $XXX.X a compared $XXX.X the trailing million decline of adjusted EBITDA

X.X% Turning is to down a YRC due was to weight day shipments and X.X%, shipment. reported in statistics, in per the second operating per XXXX Freight which decrease a day per LTL tonnage quarter LTL decrease year-over-year X.X%

Additionally, year-over-year, surcharge, was was hundredweight, X.X% revenue hundredweight, LTL up X.X%. fuel per LTL up and excluding per including revenue fuel surcharge,

excluding up per up when Finally, X.X% year-over-year and X% revenue shipment, fuel surcharge, surcharge. including fuel was LTL

segment. region the to Moving

X.X% day second decrease quarter per flat X.X%, was down year-over-year. to LTL year-over-year The due shipment weight is per with tonnage per being in day XXXX LTL shipments which

per revenue up fuel X.X%. Additionally, fuel per hundredweight, surcharge, excluding including up LTL surcharge, year-over-year LTL revenue hundredweight, was And was X.X%.

shipment, and revenue X% up per LTL Finally surcharge. executing when up fuel fuel including surcharge, X.X% was year-over-year

be second areas. Our the following quarter results two with summarized can key

as July labor our driven concerns agreement year-over-year demand weaker largely in the around I a customer the decrease which trend. First, is tonnage is volume levels, by revenue quarter. am through we encouraged and lower by of however result move

Freight, regional was tonnage YRC LTL LTL July down X.X% was For and down tonnage X.X%.

the improved have negative, June. comparisons still year-over-year While from

in nearly when XXXX. and $XX.X This driven compared to year-over-year million, to increase the in employee labor benefits increased compensation the workers' The employee expense, was expense. was by or as Second, wage salary in increase X.X% mostly increase vacation new of second expense our as benefits wages agreement. well due and largely from by benefits quarter increase

benefits approximately full and year the related for Of related of million in million XXXX one-time which, recorded $X million to first charges the second $XX.X We $X.X quarter. XXXX. vacation quarter in to

portion adjusted was $X.X of charge, As amount the will of XXXX end excluded from XXXX, of described charge the EBITDA. or full our the full from the vacation million credit agreement, By be a the by adjusted excluded EBITDA. year XXXX LTM

as lower was increase to in year. X, impacted April Next, X% by of million. the This XXXX, as per million overall or labor approximately by prior increase $XX compared hour hours the mostly was a decrease expense the offset net volume levels wage approximately when quarter dollar increase $X.X in from

are rates rate are X, the effective a experienced offset the contractual previously will of XXXX, in the wage increase As hourly capped hourly benefits half and rate at partially welfare be August on that years. the by as less recent than increases new for health increases reminder,

$X.X quarterly workers' in primarily of prior XXXX regional million results claims, increase our of to segment. Finally, development and reflect expense of attributed current $X.X million which adverse to related the nearly our an compensation,

pricing we be our disciplined still in strategies. forward, Going will

response environment, see negotiations, the regional. for to X% freight which rationalize above structure. the near softer we pricing to contract We X% are In for in operating the to our continue positive recent approximately to costs actions taking respect with trends additional are trending YRC our and term Freight

and are basis. Penn into consolidation of that forward Park sales our across $XX service and referenced including employee headcount Darren These certain the earlier, cost services. annualized benefits actions We we of Overland salary, have salary, in employee Coupled savings reorganization wages to intended savings estimate wages drive benefits as on with an reductions approximately we moved headquarters. with restructured organization, New the the corporate the million in shared combined

loan invest current Moving covenants, agreement. a cycles. the run company restrictive of capital facility as potential maturity new well of allow interest including to that structure in should currently and as extending agreement as term position our compared demand is potentially less refinancing opportunities, company stability to Changes our plan operational to to our The multiyear during provide to financial lowering the financing provide rates, weaker us the way sheet. strategic the pursuing and for term the the balance for loan

maximum an Service. from to X.XX XXth, funded was our XXXX, on times. to adjusted On of received to debt loan covenant July a Investor relates XX, current it As Moody's ratio facility credit Worldwide the term agreement, rating upgraded times YRC X.XX compared June EBITDA

a upgraded a with rating to BX Our BX outlook. was stable from

Regarding in to June XXXX used revenue, managed ADR was decrease a in equipment we second our which cash million in our reported December and million, levels to comparable March. We compared quarter. technology million in XX, $XX equivalents cash flow and liquidity is accessibility is invest under of $XXX facility the to liquidity, $XX cash and and XX, at XXXX

investments expected through XX% the have improving remainder upgraded year, of progressively remains closing, have of our fleet tractor trailers tractors of and trailer XX% age the In the we will X,XXX than our XX,XXX the and XXXX, our nearly Since fleet. or improved fleet, with or we nearly priority. of fleet more a

the now I'll call turn to over T.J.

T.J. O'Connor

weeks resulted and Stephanie of as of the employees progress higher on and to over part-time well flow This being substantial May part-time In you, resulted since has and provide hours and good time more Labor board. usage the which XXth, operational hiring contract. ebb on higher making several Agreement, we're across has companies. Thank package, good improvement over less items related and all lower National of and in to come employees employees the dock three have short last cost, utilization as shown of Jobs benefits only of these the rates, hiring everyone. time increased recently wage morning ratifications worked due meaningful on as both several benefits in the that the has

excellent. roles and driving been box has non-CDL drivers these XXX up as truck of end our have in of in We new Interest the positions over already running July.

payroll to customers. XXX and transportation allow These we to high in drivers is these providers have XXXX. provide of cost, expectation company usage to us of local improve our purchased also reduce drivers our of on Our service QX the

population wider require these CDL a the positions opens potential not reminder, a thus, drivers up box to of a do pool of and much employees. As trucks

to increase transportation the the purchase well-positioned are as levels the of business of agreement. under our terms road new We use over warrant

any questions Thanks for answer your may to you time morning. you We have. now this would that be happy

Operator

session We begin the will Instructions]. now question-and-answer [Operator

Our Research. comes Scott Wolfe ahead. first go Group with question Please from

Scott Group

from go facilities just period you get the proceeds, or those And where you said you those you and many proceeds million in million think us talk those just from Just closing? the can expect EBITDA, with sales? Do through level. Could and $XX the adjusted remind Can you if more footprint? high included tonnage think gains gains $XX what are about grow I you're a of you how maybe in you facilities. again shrinking

Darren Hawkins

that. between and the first are year. either our now start internally maintain the creates is thumb and always the just forward. in existing efficiencies, consideration that always XX mind It with Darren, These or this the freeing consolidations of And as service up the customers. of I'll improve properties but Scott, that also customer. end we efficiencies those rule consolidations keep to operational from is moving

the We believe do you pressure, surface utilizing utilization we of there. current revenue facility just door what our count. look property just and we're footprint, we also our asset per increased that total call scratching with And at when encouraging terminal and the so better

challenges for some a that. question company financial around the Certainly, network your customer go the concern the optimization, we agreement just labor tonnage specific QX, into I'll around reference have discussion and moment. around Stephanie let I Before

announced Fortunately, improve, negative, did improvements We still once tonnage see ratification. but that in was we saw the July. mitigated

point in keep we aggressively regional resource the at constraints. pricing in tonnage because govern year of mind were companies Also the same at networks, the to last

feel national the exactly see of we're for end and around good tariffs And can can the there with it what the movements that external and companies. we for to good regional I working the with other day, yield So tonnage pieces. about the with basis where we're happening externally, currently on at and I is we is feel daily for the certainly violent and in the a But company out predict pieces about pricing. control band tough what environment, of the at

some you the Stephen, a And of from around standpoint. fill I'll in let pieces optimization the network financial

Stephanie Fisher

Yes, sure.

for proceeds and on operations adjusted the so no actually close included the those. as XX not slated year in property And we XX there to of be EBITDA. closing next to slated here it few As year, consolidations proceeds be cash properties million is back it's -- we for under operations months here those continue EBITDA. that the included actually will $XX it's be of will over end of of longer that expect those that to But out, gains the the that adjusted that relates be have it in A will exit the there already, one consolidations contract half it relates part is will we majority of of the by we that anticipate at will most in.

Scott Group

the if a monthly tonnage? And And give then the from tonnage you Was standpoint, or you then clear I missed it. again? tonnage the the total gave, wasn't just Can tonnage that me. that LTL July Stephanie, tonnages to

Stephanie Fisher

for X.X%, May down down X.X%; the July was was June tonnage was May was that X.X%, I and April April down X.X% numbers LTL down and So July So gave in here X% my -- down down and I month; tonnage, by I'm was the and LTL to June going comments, gave the X.X%. also regional LTL tonnage X.X%, down for X.X%, YRC get was Freight, was then was down

Scott Group

just say data. of tonnage ever you July getting give Can sort you sort up seeing The revenue negative. of deceleration the less any is do or in you yield Are trends? -- yield

Stephanie Fisher

the So regionals the X%. the Freight and is renewals X% pricing to around do is we're are it contract that give experiencing piece about we for as relates seeing. experiencing YRC that July

Scott Group

then And last question. just

thought a us happen have minimum into of meaningful some up level and just why to on year. And out of step quarter? second you think liquidity? remind you you in So just quarter, -- third feel a need liquidity, do we gets you Do see where maybe typically maybe maintain liquidity that your this like then do that in the didn't you think a pushed

Stephanie Fisher

Sure, Scott.

to the So specifically, labor relates second couple significant made as happened some relates initiative it a in We as things those to about second of it quarter as think investments. and the investments the we quarter contract. strategic

the and that of flexibilities labor operational from contract. some so to And outflow strategic related cash the initiatives

the it the will other as The second forward. peace quarter go we to be as relates and case

buy the versus We mix lease. are our of changing

past been XXX% we years, the a So in lease CapEx perspective. from have two in

move that are we trying we we in are will XXX% to mix there. XXXX, a buy range, But buy. to that expect, We towards range. get more that XX% XX% changing and lease be going Obviously, for not

also that accumulating would of some So we taking build that is -- some in quarter. of the that or that cash normally second

continue be so won't uptake that volume that It well. as has still of in million range it as of probably that those strong got probably to in But As it we're perspective. we investments that labor won't try the as to third now extent relates much we an from third make and contract in initiative to see especially knowing just been make have million we the quarter we we've an XXXX beneficial us. can. to uptick prior and strategic we manage as quarter, experiencing these a strategic in muted But initiatives investments $XXX to right typically $XXX years, need for to we'll in because that as significant liquidity

Scott Group

So cash the leases? we're tough. lower is at instead pretty the end are and range macro Why doing of the more CapEx liquidity of

Stephanie Fisher

it of is lease Part buyout.

roll EBITDA opposed lease of we that are year to have lease as a and So lease terms pressure buy on our in that amount that perspective, margins. to because puts four group get lease, But continue back from doing as also buyout. we five we we we a want that to significant to equipment

Operator

Our Loop go Kauffman Markets. next question ahead. Capital Please Jeff from with comes

Jeff Kauffman

saying half about this those to the on in How I a might I And accomplished to credit line. receptivity minutes year? refinance get market? the the of were up getting do think want it's the desire couple we something of you Stephanie, I able are what think call going? What's heard ended be on discussions the apologize. you I late. to

Stephanie Fisher

started immediately knew labor in So things us that agreement. that that before We in the process the was following my we behind us perspective talks would from going a financing of to be Those beneficial the well. opinion that. have earnest did one are very to

done front. from end working of do perspective, things we that's are to looking for We get But an quickly. accretive happen. shareholders we by if rather actively to that and it's can hard would Obviously, that say. like to to close we are something And the a make option the year moving we expect

Jeff Kauffman

That freight comp the Correct? And numbers regional. you was in mentioned reported accrual. the workers' for both and

Stephanie Fisher

That yes. is correct,

Jeff Kauffman

quick for And me there then can help not the on? in Or that lower? of there question the it just one makes lagging regional is Is why yield improvement there T.J. for group kind national is understand T.J., unique you of the optics lagging, rest the look but something just something industry. the going

T.J. O'Connor

a Well, to regional the if had the regional ago, Jeff, year that opportunities business think way YRC could I that were not the carriers back in you we marketplace. on the certainly to the able think shared side, Freight fact adjust

had their and entering growing So one market. more shipment and truckload carriers their demand size of the excess found

they tried So to that in control through control that, did actions. or fact pricing

reflects the that. So yield

comp. a So year-over-year it tough creates

Darren Hawkins

We're And And would we've of saw the is this weight out shipment reason broader remained the Jeff, that industry, we industry, that flat. I call per is Darren. a deteriorating overtime. lot in also

year-over-year. basis majority points change at occurred phase regionals, that comment And into several on the that XXX claims the other of plays liability the the So that the mix. creating

demonstrating think tonnage when I in that. good the I they regionals, So service, have I look the the best position they're in is overall, at like July the class really

Jeff Kauffman

last one follow-up. Darren,

You're a contract from out the now. couple months

time you initially and bit that felt little didn't contract found are you the the the signed? of How Have optimistic, contract things you to it. announced? you feeling, a more was when right some think after had study You've more was same analyze

Darren Hawkins

about accruing that's was success also benefited reducing mind, we've quarter. when the had we've full of worker Yes headwinds not When dock deployment of our But and that how and that piece then that for wrapped annual in a and those. employees and new annual the already in we've certainly, a of the part you contract Keep trucks mix, contract $XX great $XXX at think question, getting cartage And overtime. time million overtime box Jeff. the CDL bucket. a plan, our million first position mentioned from to time of the that wage it The the the look And we're rapid and local into about multiyear bucket the deploying from already piece getting key up. goes the talked of you that's attacking. T.J. that versus ratified is worker mix of costly and a wage important middle

introduce things It of to there. I largest certainly you our the strategic So part the that every I mentioned and the executed being we're getting doing equipment, like into like upside our $XX quickly. we me confidence I new And aren't as in gives then these on and when $XX network in concerning those those where what that improvement other time effort. we're the optimization we're with million network. technology margin XXXX, And initiatives headed. forward. trailers combine investment We're capital still that we move tractors, on seeing million

I'm about So our excited future.

in it's on was as planning in reset XXXX. think second we that. But there to rearview the with quarter focus the decisions the I made good and and associated right we have the that we've had company mirror to

stop. other about to costs The We'll appropriate respond controls to aggressive in Many that but place. that QX, with on we continue started conditions the won't track. company put cost keep XXXX market gauge piece the in those is external of controls and

Jeff Kauffman

this And thing in not XX the exciting done is, all is I months. think

kind play as get that We there targets, correct? objectives, we beyond other haven't of out XXXX, about or talked XXXX But are other other XXXX. goals

Darren Hawkins

to in bigger I just and there service say just pretty a one they leverage an reset. we up the referred opportunity we got to mature. here continue surface, accomplish lot here a opportunities, moving for optimization, standpoint certainly and forward XXXX, is that been we that's that, from a we And these in from position a standpoint, that's productivity it incredible but believe of not of forward. And in just runway network overall We're when the a year many customers. this we're and just have is can unique I with show Absolutely, five near-term. the for network things moving also efficiency, the can got I scratching our But

Jeff Kauffman

Okay. lot Well, my you for there, of questions. thank out very luck. you And much. Thank targets of answering best

Operator

Our go next question from David Stifel. comes ahead. with Ross Please

David Ross

line deal, So can talk really about seeing benefits the X, a the little because and long to out? you you as with the the do ratification, things deal of getting the retroactive implement a costs the but started? bit were able union if you really to the until of was when sand you there to deal timing of benefits quickly, the have the after savings April some cost certainly how is in

Darren Hawkins

doesn't overnight impressed on several part now. the pieces. through benefits. of Yes, even certainly starting ramp with the employees moving And and right the up worst and you're David X just us, to of T.J. the certainly, that just box progress April that's we the in everything right you an and not because the accrual contract behind quickly. having weeks time I'm gave the the QX, investment. got under we're pipeline trucks, that's And those that reset on any think

lot still come And referring execution piece. down. YRC that Certainly, transportation remains of purchase see good I'm transportation. our the our And purchased certainly, at have aspect a Freight. have headcount will to to portion do access the the lapped of volumes you But a we purchase of transportation purchase quarter, portion to good transportation with full the as in but

will ramp-up will coming steadily. a the but we this be see So improvements

that the network to of further outside power then around demonstrating to consolidations, controls And contribute the back headcount really about complete focus. of we the the talked has office all reductions, that's this just profitable our cost forward. company earnings that efforts, moving And agreement, labor optimization

David Ross

cost fairly And achieved $XX and year. growth. that million million savings second those million expansion the about to that's reduction office million this the on to about back I of Is get half reductions to the of might $XX $XX next around million going just you the a been cost and talked yield consolidation. numbers, clarity margin that's more $XX little $XX to you EBIT guess quickly volumes talked between there related then the in function $XX of And million? in to million? then headcount of And $XX be the anything now happen year, is in before top bit

Darren Hawkins

some for David. me in The an $XX on of clarify to because savings back-office dollar allowing the the hard began but end will that we just that basis and is annualized mentioned. around of QX, Thanks now year, headcount that and of reductions fully between initiating up those and that, of timing million consolidations ramp the we

It other associated the efforts. Now pieces, flexibilities of network operational the optimization $XX these include million cost the or with just to contract. not is labor $XX does million of XXXX margin improvement the in control

in freight now. regardless of got we're can in accomplished, initiatives happening balancing external mind internal seeing And -- be opportunity I'm market what the that's uncertainty lot we've the economy. overall of a around that's we're my right that in seeing So the because also have encouraged, a

David Ross

first the any maybe as of far As did part be New England quarter benefit Freight and you went the shutdown? year, see Motor from in the them

Darren Hawkins

Penn, some we Certainly, saw were repricing that. tonnage Certainly, New at lift. we

around was we us focus with we also saw rational helped environment yield tonnage network. But negotiations having that extra allowed and a So as it it pricing in our to the were that us and labor we what more went in work as a huge that list. to QX important in as out tonnage also maintained through in, wasn't going the

Operator

Please Stephens. from with Atkins comes Jack question next Our go ahead.

Jack Atkins

here. want back a to go question. Just I to David's couple to follow-ups last of just

XX I Just not $XX to by centers up New Penn that million. talked related end [Technical to XX the sure $XX That's The to million that's that to Is year, that clarify. know you want million that previously. consolidating number that XX to you're or service $XX in the make correct? about of from included Difficulty]

Darren Hawkins

the by earnings welcome And YRC to Jack. is way, That your correct, worldwide call. first

Jack Atkins

be Thank you. to Good here.

Okay.

So the to way -- detail more little expected I mean a I that. quantify what's that? Is there to related just cost around guess a savings consolidations? to those

Darren Hawkins

when how we've us. forward, is avoidance haul about what listed what from we a talk either depending first And classified or the real benefit The is it, as in with network Yes. property lease we on from sales also optimization get property moving local in the delivery operations as network perspective. is I land you benefits naturally forward launch with creating the operational and it and moving pickup a density see your into

piece exciting. the really where gets that's So

when can I the fully got say quick XXX we equation economy This what the per from underutilized the going see when on look us I'm doing, the we just revenue terminals, in an capacity And Naturally, utilizing they're now. a or long better either also service, an pretty we dramatically, opportunity depending today centers and we've that's our efficiency is have same operational but customer gives and standpoint. that see cost move on, change service scratching environment available many terminal like especially plus right of the and service surface, at our what we're it's also is are just referencing. into getting

accomplish into continue got daily like mission as -- opportunity Officer Network that. comes headed. We've these Scott around we is it's that where in can the where cascade a we at forward. on to Chief on get an Now one for is moving this we opportunity things Ware But put optimization it. I play. numbers basis. get big our And team my publicly that's entire opportunity And whose that We've view, haven't a on to as network

Jack Atkins

are the in we've thinking second everyone new And now at perform labor next really normal of the that move quarter? move cost to items sort to place as That's be year an we are a going to through and there investments in how be we phase-in the trying to to specific -- then, company How business in I these the about they guess, all what I'm into seen how this way take expect and the helping third these get in quarter. for should get the feel you. Okay. hear, second this given and trying relative business year, agreements rest good of Darren. in struck the of to to savings half should the the -- Thank about operational seasonality, we would performance a guess through year? and the as think of you is is year? is fourth incremental balance just way I the

Darren Hawkins

and see office Certainly, the The some the will around back the makes between headcount capital end the -- of benefits the certainly benefit now the discussion well. as The those moving labor Those big in although, 'XX negotiations and that. operational of And as I've XXXX. operational that available, will we're pieces year. will network up into a the in pace from fully mentioned rectification, the consolidations, us cost flexibilities ramp we from in rapid on play controls we'll at come that that optimization that reductions.

opportunity the pointing was QX to XXXX 'XX, and come fully the continue as investments But of So to ramped these these QX. point QX certainly, in and reset up. definitely for all will we're in

Jack Atkins

puts way the that's about are flexibility around you or maybe a think trying minute? I'm holdbacks, the new word. sort then, right I of that a a And could from can talk talk your get when on some would a not things your the agreement. to in guess about it. the to just obviously. potential that What credit to clear no, for you, that and perspective maybe optimized but this on and headwinds to back place, flexibility there get Darren, finance that, credit love think going for current capital provide new to that both under -- operational agreement and But maybe business maybe is get the about of you can opinion Stephanie, Is very structure

Stephanie Fisher

that this So a opportunity perspective like left to for I that from we us things in limit strategic strategic We our at and runway to removed. we'd know the least there to few annual the business we're financing financing think from investments really the that and us, we've way initiatives. but years a the way for way or payments. a get we're of are opportunity, see some thinking about growth those there continue still reduced have really an with interest provide on really to current to few these term-loan, talked, reduced these rates either the to thinking about amortization That's liquidity provide additional is opportunity

Darren Hawkins

the then YRCW in we've reasonable when we has leadership to adjusted has this of that's what labor accomplished company, plan the lines some operational EBITDA is trailers, ratification since just been layout challenge companies. the of flat from I'll improved all have XXXX that continue lot in and that the that, an way But we we have a agreement. or quarters improvement just an at individual experienced got trucks, have certainly to certainly with the already as middle where select they're of It when they've add at that of is and XX uncertainty And very I a multiyear along team invest what in operating pilots, majority flow hadn't significantly cash was say a and been And shown aspect the of something that technology. is years. renegotiate do there proven want And was done has had we company. used there been strategic flexibilities those. around and And and steady we

a And much then it's to a be something even larger been this going on the on formalized be past. though scale successful we've will just in from standpoint, view, forward. is This that quite is the in optimization and moving public at network

believe that I makes footprint others the company what we've based together you about that one when this from then put add capital real and around, on strategy the from a Jack. a certainly and certainly and I this of of confidence that has. So got nice opportunity standpoint, estate all That's footprint in can new structure speak a property idea

Jack Atkins

Well, great. for guys. see that's And the again it's exciting happening. to Thanks what's time

Operator

Our Amit Deutsche from Please with Bank. question go Mehrotra ahead. comes [Operator next Instructions]

Amit Mehrotra

just to questioning kind think guess, of on Darren, breathing the understand is Stephanie's of little with issues provides one I view and under-investment and impact that little time, with kind and And the of impact cumulative makes piggyback, view bit a for on a T.J.'s of I also problem neutralizes last of think the And playing bit road. comments, totally the business? or so. just when company in guess, the just to your invest refinancing, to to the inability down structural question on trying I from commentary. the the structural wanted the because there this the and standpoint of, what a line to or equipment, years has been of kind particular that the or guys aspect caused field the at the it's same impacting I important like I has on, kicking can that at the needs XX you sense cumulative company context of room. more are part wanted respect that really happen that's to And solve why that been financing of level the you capital get operations. your playing or in that structure to get do I'm last And a really I

Darren Hawkins

that's multiple about of your toward that, company our do improvement five-year strategic that runway. the XXXX in runway over get first certainly truck, runway. that it competitors. getting us certainly half we the really plan to that to of Yes, years this back when need to year positions is closer and that million geared I million the five margin $XX trailer plays that to And in into the investments But think and spans $XX tech

most also way what on effect And the what getting several opportunity I piece our point keeping which where job to larger the work think a consistent to we've of move it but in XXXX. trucks, improvement over with in fleet the heart the us. to age great delayed recently, forward investments even and And execution around is more have gets actually I and a mitigating certainly strategy, with nice years, think us we've with last done also at had in older, leapfrog a and our for significant of And not that. in that that's is and a

a competitors, our already they've achieved the fresh of of Most benefit fleet.

a of lot haven't been of working And we we hard benefit have headwind had the We our fleet. that had the improvements fresh on leasing of a also but equipment.

work that, true as potential much I power evident. this will and earnings So we company be of more think through profitable the

Amit Mehrotra

you that So event, hearing fleet the in of I'm have bring maybe XXXX function guys event this capital where it if some invest correctly, start in sounded to the power as fresher the a Is step correctly? you I earnings more average improvement the of the XXXX like to we if down. age understand to a see incremental you company

Darren Hawkins

it of haul seeing in fuel up. on per miles we And our ramps to are think gallon we're because improvements I I to fade. introducing. we're what continue But new and doing we're other plan going don't in also the land that equipment network -- areas, that from allowing

at also pull some on would have activity. part to were change lever your freshest depending that point, because the a there fleet is external of CapEx naturally, dramatically volumes if to there Now economic running volumes, but of

we're of our listed is I in XXXX why with as and believe that things, as path capital then to the very then it to one of absolutely, I those talking a there But that and fruition performance outside certainly planned about priorities. comes logical top investment

Amit Mehrotra

in quick of of impact quarter and if Let hundred customers that back talked point me see I follow-ups, on the actual what you about about a us in Xst could on ask plan is, the of talked if can nature could pulling you April OR you you back. the One we could out sense the help was there basis half, -- a those from if be quarter? could. of normalize Any finer kind couple what and the very the and retroactive several performance So impact the appreciated. be in that'd the events point idiosyncratic

Darren Hawkins

as the on been Well, the that I'll aspect, was there something in start I'll that well, weigh let playing start and naturally and a of then with in amount customer out. hasn't of attention because Stephanie concern, was that done XX years From customer.

landscape. LTL that. of So the is realized be through our part they they there I will But important it for YRCW a to customers, And was that. supported concern a how strongly of say, lot

It the five asset four our the of really we to companies and have on reorganization we customer. that And up the led customer. all now focusing that completed, point Logistics plus representing companies, brands across built just also HNRY sales contact was completely to

I forward is utilizing customers operating moving growth companies. that of those all think existing with to the and the our secret aren't

of health hasn't Stephanie, outside the customer specific well. mentioned into played explain the Now, volume wage August certainly, question, to hundred will around it and yet, points, that as that address several activity but help The on piece, the this, that. she'll basis piece your welfare

Stephanie Fisher

than we we the we'll welfare see saw negotiating that In third in that here negotiations, contract rate part for couple $X.XX rate the just There's much items for a from and an XXXX, XXXX quarter XXX health things the $X.XX first million really or and XXXX So of the about that in in The August $XX of for relates we're related that's in increase to it about specifically. X% contributions. either that as health quarter, of quarter -- vacation couple to less points benefits a on perspective. increase to basis was welfare there. an Then OR our saw XXXX.

the of part there's only of funds. $X.XX increased. that This for a actually our majority contract, August As

significant So that be will a assist.

offset some we on about that of that perspective. increases took from As a April we wage an the hour will help think those dollar increase we that gave cost X,

going also specifically, The basis necessarily point wages increase Not million -- XXX in But overall. of X% was shouldn't about we forward. are think for on something other kind $XX piece about the increase the overall. or wages quarter that additional

Amit Mehrotra

majority of and process. there, with? the many term are you familiar to people the How with terms a have quick One from do I'm that not you sign on do what holders in you I very the us can, loan need on just explain of to the people structure? negotiate on refinancing. if Can new one to me, many -- how you totally last guess to

So in ability through? I just be helpful think your understanding that it'd get to

Darren Hawkins

it's in said we will say have And move we that along. on experience I that unfortunately, front. a say times. process, many or to we've that this. been really it we've that Amit, can through about how fortunately all And know we

moment's at approached pace, at So rapid how my we that expectation with once that Certainly, we'll that that's those a continue discussions. forward complete. say it's that's I've is we'd and notice But go about a it. really can public all to something move

Operator

This back earnings concludes Darren to like conference to the I our over closing call. would for any remarks. turn

Darren Hawkins

the Thank employees just to you operator. And before YRCW we end like North across XX,XXX America. I recognize the call,

again Your hard This for may you taking absolutely work, instrumental to call your focus to Thanks I'm the on concludes have. today. turning working our safely is and Bri joining that additional of customers, our care with back our questions success. great Please you. us call. any contact operator, And

Operator

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

disconnect. now may You

Yellow (YELLQ) 9 Aug 192019 Q2 Earnings call transcript