YRCW - Earnings call transcript Q4 2019

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Operator

Good afternoon, and welcome to YRC Worldwide's Fourth Quarter and Full Year 2019 Earnings Call. [Operator Instructions]. After today's presentation, there will be a question-and-answer session. Please note, this event is being recorded. I would now like to turn the conference over to Eric Berg, Vice President of Investor Relations. ahead. go Please

Eric Birge

and Fourth operator, Call. everybody. to Welcome Thank and good Full Worldwide's Quarter Conference Year YRC you, afternoon, XXXX Earnings

Joining the Chief today Officer; us Chief Operating and call Hawkins, be our on Executive available will Chief for T.J are O'Connor, the Officer, Financial Darren appointed Officer, Jamie Q&A. Pierson; newly the

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

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

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

may simply During refer non-GAAP call, adjusted our EBITDA we this of as measure EBITDA. to

earnings the now release, and In The I'll referenced the to during X-K, is which presentation an website. conjunction the available over our turn was with presentation release earnings a Darren. we with along call. today's on issued will be call filed in

Darren Hawkins

our XXXX conference earnings for Good afternoon, year everyone, call. and fourth quarter full joining and thanks

tonnage yield sales in backdrop, single the several with with companies. side labor and key in also rowing team, a enterprise our portfolio operation all a worldwide more tough space of for under ratified same downturn all leadership industrial One, three, accomplishments of and the is one inclusive goals. the in I'm with to term moved Even a As for we the and improved everyone X-year that loan and YRC impacted the our the new of with a we objectives which and two, refinanced challenging brands knows, the negatively contract; coordinated areas: same unified economy, terms; the flexible proud LTL XXXX on was one structure direction of entire

As XXX,XXX few and I've brands the been strategy for with network as to my and to last customers. X vision one sharing operate that our service quarters, more provide X than proud our very exceptional is company

our and Our and improving bring us are continuation supply with to optimization customers consistent with that value. the of The as labor their enterprise following strategy transformation gained the to we their property and and network rolling leverage stock offerings structurally to operational providing to the flexibilities value asset initiatives: utilization; experience allow Operational increase continue service work expand XXXX clearly improving contract. that indicated chains have and new through we remains

goal Next, of end us operating and service do to several from set customers allow provide of we allowing a by it. our we a speed the use system source. turn the All systems platform, to will improve same data with to single company the which to us with from the in technology single perspective, increase a intend on consolidate one which different we

geographic our locations in evaluating service continue will network offerings. and physical will rationalize the and we finally, coverage the of And maintaining number footprint and service areas while

satisfaction improved believe equipment. benefit and the have financial we geographic continued be have cover and physical future also to fewer mileage, facilities improved operating visible the to that increase should customers service locations, and service results. and this continue We will may will of our added will this density, reduce areas through we expect While efficiencies same and

underway closing currently XXXX, more now for year. with our will the in the clear quarter at end for the on but with comments and the will the the Having back right on change of execute to would some details share part better strategy. positions enterprise forward like come team the aggressively this right planned and path to field to transformation the I some Jamie, reintroduce who you is

James Pierson

Darren, you, afternoon, everyone. Thank good and

death I Before and bore you numbers the in jump reading to the tape. by

forward Let back see and with "home," to to by great great do which in I will everyone, saying I be back. shortly to this great after faces, be this me begin crazy it's even be back It's to great it's industry. familiar to look call. reconnecting

with little With what results, and that I a let as know color the out of that's the me run more we'll really want. through way, end you

XXXX, year down year. or of prior Worldwide billion consolidated from to X.X% the full billion, the reported is $X.XX compared when $X.XX revenue For YRC which

Operating the year million for $XXX.X full for to full million compared was year the income $XX.X XXXX.

previously the full Additionally, the reported to of restated the million compared EBITDA XXXX year company $XXX.X reported to with for million is definition. new $XXX.X for adjusted their align from prior the year, which million covenant $XXX.X

of in gain quarter For of reported compared $XX.X million, to $XX.X and down which XXXX, disposals in million on $X.XX from from of property operating the fourth million, XXXX gain included billion, XQ $X.X a income billion $XX.X a consolidated $X.XX 'XX. we revenue which property net million disposals included net

million in EBITDA quarter And XQ of to finally, this million compared adjusted 'XX. we reported $XX.X $XX.X

day, day increase its Turning shipment. fourth operating per LTL reported in quarter year-over-year a per decrease shipments X.X% X.X% We Freight LTL per tonnage XXXX to X.X%. down was offset an by YRC weight in results. our had

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

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

down weight year-over-year. quarter tonnage in is decrease year-over-year up Moving X.X% which a the to as XX was XXXX X.X% LTL fourth due per The bps per segment. shipment day shipments day Regional to was per

LTL revenue LTL hundredweight, per hundredweight, excluding and year-over-year including surcharge, XX bps down was surcharge, up XX Additionally, was per bps. fuel fuel revenue

bps XX surcharge, Finally, and down per shipment, was XX fuel excluding revenue was when up year-over-year LTL bps fuel surcharge. including

we into year, are for the our fleet. capital As back reinvesting expenditures. in during And spent to company, committed we on million $XXX.X investment the

of Additionally, of revenue leases of million new capital a we $XXX a $XXX.X X.X% for value million with revenue. operating or entered total into for equipment

to Turning liquidity.

cash equivalents XX, million, XXXX, The when disciplined our accessibility continued back is decrease at December decrease which $XXX.X business investment cash, was the compared a CapEx. to result and December majority million via of $XX.X of Our vast of XXXX. a managed XX, is the and into

here second Now my for let a me breath. pause catch

business, and focus get hell before serving and I'm them our few Well, I financial First you Then my and customers As plan can line. back? than the points the answer might going can repeat. again I to the be I Rinse, have questions unfinished make Darren beyond make all, sales feel everyone of numbers to support focus I I before is on the greater top come something above you difference. go clear, of did on your wash I like ask And say, and actually a keeping them. and to plans? know of growing but it we what teams would and but some and do, a One, like want the Two, the and to to I actually running Q&A so some are better. I part runway itching do myself. business. that why ops a

do the and and do has If Darren support organization changing senior move the the those focused and X to and company we and leadership going needle areas transformation of possibility its real things the I'm that in other follow. investment team of them the trajectory a results the should Specifically, in that this well, profile.

under new minimum that Third, what about term million of our EBITDA. maintain the covenant us Everyone covenant? to in requires loan the knows adjusted $XXX a

$XXX that Now first everyone industry knows of quarter and that knows the one the the million also calendar seasonality the year that everyone we is weakest and year. ended within at the

keep be in very LTM sublime is that it's mind an to However, calculation. thing it a please obvious,

important compare laser-focused do the and I address in and the If now, to we anything, to need will it's optimization are right, you it But compliance follow. year-over-year operational thereof. on should change. let we Again, the if So right results know. absolutely network we

And lastly, XX.X% down X.X% November total in down LTL per follows: day tonnage YRC month, XQ results LTL are tonnage preliminary as 'XX as in October, by was January for the Our and and down X.X% was down quarter, of decrease was At quarter October segment, December a down the for Regional X.X% the and down down a December X.X%, for X.X%. freight, X.X%. XX.X% in being November was

preliminarily As for and only least YRC for XX January, at the X.X%. down down only segment is Regional bps, January, is freight

turn network, be comments. to tell, industry return one as it and am can't you foe. with its It to excited brands. but to leader one, the if closing, perfect excited company to be to help powerful X what I back. person, an will formidable for rightful place won't company, I can to Darren? tell team do Darren and I'm a incredibly this and In call starts One closing some I one. now over one and but proud one I'm

Darren Hawkins

non-asset And Jamie. brands. once proposition of scope LTL also, time agile, afternoon. anywhere back with the you size, board would best-in-class to have. And North of YRC be XXXX. capabilities your value as the logistics, Freight, CFO, home continued X any YRC our that happy go confidence New Thanks expansion this partnered HNRY Holland, America, in for the me again, to gives Reddaway may Penn and We the welcome member. as you, and newest and regional Thank are now about then in endless answer questions Worldwide

please? queue can up, them Operator, you

Operator

Instructions]. [Operator

Scott Our Group of first Research. is question from Wolfe

Scott Group

trends? seeing just what's in the monthly improvement So have the it? also some January? total just you do trends, on freight thoughts monthly And you're the causing on And

James Pierson

first tried actually was We Freight. Scott, of the out, it numbers break was I I set Yes. gave to -- that

X%, negative XX X%. January. bps then XX%, the for down only So X%, that's only negative the it's X%, -- And

as XX% the then really So that for the it through X.X% in from the and X% down quarter quarter, pretty see good month to in to perspective, of reversal you closer being a our you'll fourth go January. range,

Darren Hawkins

Yes. getting up add tonnage ISM negative on XX with ISM, And -- just week recovery months in I a of what from activity, we saw some also shoots them green negative favorable with out that five of coming after weather. this coupled from industrial some lined specifically, months would January, and

Scott Group

us tonnage? total clearing, LTL that was I'm only freight or gave for you Just

James Pierson

Sorry, Scott, said per think tonnage I I day. LTL

Scott Group

you Okay. have I don't do have tonnage? -- total the the

James Pierson

well. tonnage the you give as I'll total Yes.

month up month and the of actually XX it's month of X.X% was December up it October, bps. then for The X.X%. the November for of So down was

Scott Group

And January there?

James Pierson

Yes.

number you back one Let me that That's on Scott. get I'm missing, the now. with

Scott Group

follow-up. Okay. can We

on So the covenant.

Just, I but comments, your two questions. guess, understand

bank, Just included covenant Apollo if may amendments you just sales or how in so traditional potential how understand that do with different more on there? lever? negotiations not just as thoughts may And are that, on to a have theoretically, remind then gains think us we a you relative more be

James Pierson

Yes.

So credit your in sales one. question, easier gains the the excluded to agreement. answer the definition on are all but terms are Technical new of under under

how don't Now negotiations someone of go in with know. Scott, Apollo, I like terms

haven't We those had conversations.

We the focused more of on conversations. network to haven't above had those compliant, anything service being and we And candidly, roll we're as optimization and need the else. customer year the the end one the and through have beyond

Scott Group

with this got comfort deciding come something you to before Is back?

James Pierson

the which got had I in given area. in I in any say that knows particular, over background, Unfortunately, think You my a you, comfort probably know this on what, everybody agita I had the I call expertise the have covenant. wouldn't little team.

Scott Group

-- to season last to $XXX be? How first Okay. you that the get tougher liquidity again? going leverage And question that's do quarter, what million, on usually then we we have that help need I higher for do think, quarter below about a do think where What liquidity? can just we

James Pierson

Yes.

more, year $XX I about I first want at want operations. being always threshold. ended not Levers you is that million, and million pull, less. the to So foremost, we seat, think always I'm we I liquidity, not know don't in have $XXX a cheeky And right? -- and we my all, Sitting more, really, think, is at

controllable have levers being back perform a got that outside the the with our us, So that really basis, business. we've -- simply to outside ISM control. of the better got On by ones of do macroeconomic have to into the we to

into If lever most you million disposal. Scott, we've the million back X last probably year, CapEx controllable years, our $XXX plowed the look million another year. last business. That's almost we this at that got $XXX the single at $XXX of

Scott Group

plan? XXXX What's the

James Pierson

We just CapEx yet. haven't given any on guidance

Operator

next is Ross with The from Stifel. question David

David Ross

Pierson. Mr. back, Welcome

about end the the availability On the -- just year, of question follow-up Scott's did of on at end million of stand where that at $XX January? the the

James Pierson

was of second what We don't that on what lowest me give I'll probably on as probably no that's years. can we've the X was, quarter, most last tell off secret it's have terms liquidity. the it through that one you impact CapEx we first But give the the guidance amount one tell quarterly the in liquidity. preserve a inter-quarter on and It's shutting the we you roll had where I'll it in basis. to

end quarter, lot around second the happens go of our This quarter the a collateral and a that the which of time. is that AR into first increases, back in through really on borrowing point the you As get base. the We low availability then to be ABL. for

David Ross

And Jamie, were fleet last company? age the how average you is now when the at versus

Darren Hawkins

optimization standing with efforts also It's We we're David, fleet and frees feel than since a want reduce age we time. that, over still X,XXX coinciding No investment on also about year, But I addition not to good like, naturally. out on over consistent last that. up XXXX, equipment. that and would our tractors where network reporting the with of secret.

David Ross

into the consolidated looking do you network brands more might into if Darren, have X? visibility when the X disappear, than gets like

Darren Hawkins

No, David. example theoretical a From out. aspect, the is We can is, value give example. brands an I put that the where

on a brand. example the would would around year, with service That's like where started terminals last matter at conference in a or same As what optimization X would become a that your fact, X The two single Freight. and we a network be Freight theoretical. terminals brand that We've up Northern footprint consolidation of terminals, those Freight two in Michigan. and into location, YRC implemented freed no that we footprint, that's Holland terminals YRC terminals. that Holland X the had longer consolidated two in And X in for buildings which got YRC look

were Michigan, then The Freight. the YRC and to using YRC in they second Freight that customers employees next getting lanes they where many Northern service YRC day became in third and employees day Freight, improved were Holland their from

network, was immediately into went into through goes that a that the YRC Freight the YRC Holland it in lane any Holland service. footprint Freight's So anything then got And facility. connector just

example better, tractors gets take and that's So and forward more trailers out, transition we out, buildings able to being employees The company. with of another take structure the improvements streamlined customer productivity allow better a move take an to service as to well. out, cost

back a So brands five system holding take as standpoint and will office company intact. piece the stay operating technology The well. from will the the X

David Ross

rates get better were for And service? you able to that better

Darren Hawkins

Regional Freight Freight Freight's haul YRC network apply, works the network actually -- the On rates in Regional that shipments well. the shipments, length well. YRC which shorter of YRC shipments pays in

David Ross

customer the Okay. because Yes, a getting better service. is

them would way the service your lower is slower guess, I So to cost expect more. pay that I if than to is better it would work the provide other service.

Darren Hawkins

with more -- of handling other volume though with You're in, there's XXXX lesser we're the exactly cost better or from of even the challenges you're right. Regional David, And a networks and that situation and productivity. most the Regional as YRC in efficient Freights, aware because than analysts,

Operator

Jeff The Capital Loop Markets. next with question Kauffman is from

Jeffrey Kauffman

an way. have certain of the but quarter give a adjusted for know million, would back how calculation on us covenant you're of 'XX in an based been second gets idea idea have quarter EBITDA close $XXX EBITDA kind for go maybe question the you 'XX, what it the so So EBITDA and generation? we We calculation first can the different we with about see the of adjusted presentation of

James Pierson

Yes. Give me second. one

it'd be million. $XX So for the quarter, first

Second quarter, $XX million.

Fourth Third quarter, quarter, $XX million. million. $XX

Jeffrey Kauffman

Okay.

in an we're on. can or HNRY got for a the favorable going update you're as just in we with though don't given HNRY I if I Logistics, next on some even quarters, unit you're everything two but like anything So thinking get close rate comparisons don't ask. that? if theory XXXX disclosing size I that. separate thought know about know run I'd disclosing you comfortable

Darren Hawkins

from Logistics for on And the great HNRY shipments Jeff, $XXX of margins finished in revenue with knows expanding growth Logistics public space. down great will some but per a for in in area of question. naturally, target was Logistics our rates. everyone yes, brokerage HNRY you HNRY was update. give since were shipment I job the Truckload of segment good. at The million last targets the year. $XXX did their the million, an I as truckload XXXX revenue double-digit

it their basis. from a see asset-based with behind pleased a having Logistics, brands enterprise Freight, expecting New growth proposition power I'm that of is force value and sales Logistics continue. and there HNRY we H-N-R-Y performance YRC it named So for garners daily national HNRY Holland, to Reddaway, Unique on specifically because HNRY, that four selling Penn, the

they made of what customer, one anxious excited they XXXX. we every HNRY We're in to changes X about people in into with does now brands. all when XXXX, and our the Logistics go a represent that So sales see

Jeffrey Kauffman

can through Okay. as Jamie, a response quarter interpreted a valve think, bit the safety your liquidity. of first capital spending I to be I work be we typical

other yet. You spending? the continue for where haven't alluded know be? feel budget the is I'd to to there Darren need to yet not given you urgency areas given out environment any I you're certain thought a Do of there you there's there, like about the I quite projects? way that capital spend spending is ask fleet but But XXXX

James Pierson

If side back investment house. is in this technology add that, I our of to to the Yes. anything Jeff, the would

be network the of XXXX actual in, space I returns in that think on on investments doing company. around that goes lot be a will XXXX, think, -- the depending I in terms that. the of don't we'll consolidation transformation much invest investment the operations we and greater, in of know I are the But the

through can equipment. put roll we and tech par with amount XXXX to you there's going on as that revenue So easily be fair a the of investment XXXX

Operator

with is Amit Deutsche question Mehrotra next from Bank. The

Amit Mehrotra

the I wanted to follow-up on covenant.

lot to the the Does still crude fourth growth in year-on-year doable savings, EBITDA is. just looks or tailwind some of adjusted dip in quarter but But got on of million $XXX And decline the that maybe of you're weaker the seems little it helpful January. volume the the like dependent, like accelerated in year-over-year. lot it a would a based million quarter that just down getting XX%, and the XX% first the maybe be you've January $XX just was And wouldn't guess, given threshold. it math, a also EBITDA below adjusted down be I in because a So $XX bit -- million can you dramatically of XX%. environment maybe, obviously some to in macro trends

employee the got of will that quarter. first assume $XX million You help headcount incrementally savings I the

help earnings Just relative the fourth like quarter things kind us of based year-over-year guys you think did a inflection to about power in company the in quarter. on those the first of maybe the what and basis positive the on all

I be that think helpful. should

Darren Hawkins

Yes. Amit, thank the you question. for

intact. On we'll negative corresponding the That industrial but and start the not We're down $XX in to remains on blueprint, million impact wavering, million, $XX it the the market there. slow industry to job great is million. his certainly time team $XX and million impact cost that. a million $XX $XX reduction The with line did play. T.J. in the in that on volumes

our winter expanding As January. justified shipment see certainly so levels. focused. remain keep tight operations but when encouraging we the seen it's green we'll headcount a work and of left. far will there's operations, We'll It's only in we shoots until than through more and back and into add we QX, We'll the stay by lot lean we've tonnage

right we that we're pursuing, that So with on network as with XXXX. track closed the out we were optimization

the and of XX We've total we next XX team. landed I that count target through The We that up at facility gave, our now teed got working right achieved facility that. with our XXX.

I'm doing The that the to productivities volumes us because city there experienced. our load of pursue in still standpoint. to language team that, and got containers new continue pickup that are delivery timely. an we operations, our investments and contractually networks that linehaul is challenged, Our and on what also but is our one confident that transportation we're pieces us previous and And and area we progress hauls from optimization certainly, of contractual and purchase and agreement longer are our in made We've allows to also, average play. declining, And create operational those our when in density metrics do. are allows length

and think things So those volumes play, right stay and more we lean positioned well even a watching certainly closely. state we we're you will organization if with all But to lean normal less until in return at certainly I we're bad, the a see time, will. or

Amit Mehrotra

going outside looking fourth that you to mean, just at quarter, bit a ask on just hard a based you the XX% all it it's XX%, you put just moving as now? mean, XX% that just depend EBITDA it quarter. the calibration there's us. seeing little to see ask because of easier what I and it's in. will in So the things parts make bit because I now, mean, that the from little I to think kind for hard the all at trends now, Darren, Do on follow-up I'm first a just went lot down right order decline in is you're EBITDA on looking it a volume. of And in

Darren Hawkins

I'll Amit, there give as getting in the we're Jamie direction some you guidance. let

and perspective. Jamie, ahead go So give some

James Pierson

it much said you perfectly. dependent so on volume. Amit, Yes. It's

we here, into focused X-month From the as quarter, a on month sit my perspective, you've our perspective, laserly got this we're only X everyone from So math. one. is and

would You've it quarter my it. decrease From threshold 'XX we $XX it. see the macro done the 'XX, that before. tailwind did already side economy. you've put need of some from of We of I really kind to XX% the done can first million be in perspective, the

a Specifically, when least recover do bit. you side manufacturing to at rebound little

excluding or in was per than of about XXXX. XXXX expensive in the itself, contract reminder, more the in a irrespective annum, mean, X% as new contract Just is I volume, of it

coming headwinds us at there. some have do we So

deterioration little want the recovery contract don't into benefit lose One to on manufacturing the the get fact you things that So I price. this -- quarter you go that X a of would than need bit as this would with we first see and the that you've the at to ago a sight of lack at is least expensive is was think us got quarter. year of want it side I more time. a benefit

Amit Mehrotra

Right.

at Okay, a $X question storied history feel maybe then are of like has just company less And of the because I sitting it's these equity than bigger of equity and $XXX And helpful. basically price one to is revenue. it's billion of option But I value. have territory. close million legacy the whether competition kind an pretty here, that's value issues, you picture mean, your all ago. XX kind years a we

asset underinvestment and nonetheless, flexibility but As to can't result, you're which and the pension large the work a unions, in limited the impaired. manage is you managing base, rules related structurally deficit, a

why to Why right to need just recapitalization today? long company, right now the the for a given don't pathway like you you at the could the have about Like us isn't you equity business improve right invest the isn't because the help pathway a feel large so is where So that. think is equity more diluting something that just you of fully, just term? do trading pursue organically without like, maybe Or to holders?

James Pierson

the of point $X top at revenue siting mean, I in you million this the $XXX you with agree tell I in value option line. the is Yes. billion what, I'd at terms time, at

We are XXX-pound an gorilla.

that. picking locations around unmark still are the We country. have XXX-plus We

$XXX it maybe billion about million, a and in do only fact spend million with we $XXX $X year So less from do interest recapitalization the has my to expense. really perspective, that with the the has to

we I at At level. you capital had only that interest issuing $XXX $X million about it in save equity Assuming have no structure, to could whatever that a no is million. share, now, $XXX

Operator

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

Darren Hawkins

and This back with you, questions And may call again additional you. to operator, for Please I'm any contact today. our everyone concludes that to thanks operator, Thank us turning call. have. you joining the Eric

Operator

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

You may now disconnect.

Yellow (YELLQ) 4 Feb 202019 Q4 Earnings call transcript