YELL - Earnings call transcript Q1 2022

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Operator

Good afternoon, and welcome to the Yellow Corporation's First Quarter 2022 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Tony Carreno, Vice President of Investor Relations. Please go ahead.

Tony Carreno

Thank you, operator, and good afternoon, everyone. first earnings Corporation's call. Yellow to quarter conference XXXX Welcome

and Darren call Executive Officer; Joining President the are and Operating Hawkins, Harris, Financial us on Chief today Chief Officer. Olivier, Officer; Darrel Chief Dan

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

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

Additionally, release, along which on the please to adjusted The I for earnings conjunction Darren. to website. release the X-K, during filed In with presentation and is reconciliation release turn issued the our loss will net call. was we call in a of see now be referenced today's an today's with over a earnings EBITDA. available may presentation,

Darren Hawkins

quarter disposals excluding everyone. EBITDA Tony. steady income, QX first we reported and joining staircase and operating Thank continued best XXXX. quarter property of good Thanks, adjusted And our afternoon, best our our for first you call. In since financial improvement

strong. QX. LTL hundredweight, has increased kept and doubled trends as for capacity Consistent to pricing favorable ago. the into fuel, XX environment a demand carried addition, last months adjusted In the compared including In EBITDA revenue has end that of XX.X% QX, year-over-year of LTL pricing per QX the year

negotiations. the of contract and average on Yellow XX% For between XX% month April

in quarter. XXXX take sled carried among of COVID-XX the in to our call, year-over-year out to February, first pushed the percentage on line we winter adverse increase employees mentioned more to QX along our lasted us workday our into weeks with and December decline cases a weather seeing February cases and that Despite rapid led network a As started terminal with cycle operations per April internal in limit level earnings in of by tonnage return that in which peaked LTL actions in expectations. a and few days. and The markets final

As weather recover operate transform and extreme as we super-regional to from more to the network a carrier, events. expected more be quickly we agile

as with of as careful as the technology the transformation has manner to to out to risk, a the us, to network apply to LTL continues. company expect and And optimization lessons and next. conversion thought and delivery the network same regional fully linehaul well technology our The operations. long-haul With to as in also service return plan the from well One one growing transformation. the to the to integrating we managing move transformation of phase We're pickup the execution learned minimize our We per both Yellow turned focus tonnage day. support behind platform

about Dan. more from this hear You'll

with remaining a and Looking chain capacity labor ahead, played and levels be below tight LTL to demand market. for supply disruptions up catch strong, appears still from normal manufacturing sector a inventory

the for recent investments need we is believe we years this add progress transformation are network complete, capacity Yellow, Once without capital the asset terminals. With we improved network enhanced cost utilization, savings significant expenditure in XXXX. and transformation making One to new expect made positioned to and we're added the efficiencies, the well

in over one now solution. quarter. additional will our will details turn operating an as who We a provide call Dan, will about super-regional the modernized customers with carrier share be that to will I all

Dan Olivier

Thank everyone. afternoon you, Good Darren.

income billion, including in the was was compared for XXXX gain loss property EBITDA million operating quarter revenue a compared $XX the million XXXX. $XX.X million first on of included property net first XXXX the end a Adjusted prior XXXX. in of $XXX $X.X was quarter, last $X.XX which an compared compared Operating Adjusted was million $X.X ago. loss disposals, to X.X first quarter million, of on to $XX.X in million year, disposals. for EBITDA $XXX.X For XX operating million the a months to net million billion the to as year $X

reflects surcharge compared to partially growth shipment first a year revenue revenue strong fuel the LTL Our XX.X% was up volume. and Including per X.X% by revenue up LTL in ago fuel and quarter continued performance compared XX.X% hundredweight yield a of quarter, per surcharge was ago. offset first year higher lower revenue to

compared million follows; revenue XX% LTL weight LTL tonnage April to preliminary per capital expenditures Total quarter year. XX.X% day as January per February LTL last tonnage decrease was was Sequential in compared was XX.X% LTL compared between revenue XX.X%, quarter to down surcharge, On trends LTL shipment. LTL March year was decrease down LTL million and a up prior workday per first a XX.X%. down the were for in year and a the basis, down XX% for tonnage XX.X% to shipment $XX.X ago. hundredweight XX% $XXX.X per first the and per down fuel Excluding X.X% day per up driven was a in day and XX.X%. by shipments

XXXX million. for year $XXX capital Our expenditures remained $XXX full to guidance million

lower we production as However, likely disruption, tractors and near result range. trailers, for chain the of will be and of a this capacity supply end continued

Turning hourly employees. mileage and to rates for union our wages

per and hour, mile X. increases For XXXX, $X.XXper October April our National includes wage X Master freight and both on $X.XX agreement contractual of

of living change in per April Based per contract of year, on qualify living per a cost $X January. increase each increase additional per measurement, year's Price and in employees for of union wage $X.XX on $X.X $X.X this includes hour X the a April resulting year-over-year of adjustment Index for our Consumer addition, hour and mile, of clause, an total cost effective mile. the published on allowance the which based the In also provides in

and February For full and our Standard wage XXXX, operating expect benefits issuer total upgraded rating finally, improved on year Yellows by B And Poor's union based we increase to in approximately to minus our credit we making X%. an performance our for Yellow as to This Darrel. December. we I over Investors BX One are follows in now Service the Moody's the upgrade to execute strategy. call progress will turn

Darrel Harris

Thank everyone. you, And afternoon good Dan.

strong proud our partially encounter. March While challenges, the presented first offset in on of to quarter the note unique challenges two months for some of the employees a finishing I'm we

carrier our phases. of to One a Turning super-regional Yellow around we the end to will complete in the three the transition transformation, year

of first phase and our integrate analysis operations. We and to delivery in our linehaul network have planning the completed pickup the

lowest implemented execution expect summer include western We profile. Phase the has part of the X this optimization to the XX which will terminals. YRC This US, risk in freight legacy runaway be of and the

how during remaining our single similar lessons is recently to we will We transition This learned successful onto a phases. the very apply executed technology platform.

with progressing terminals. earnings and look be updates the second half and you second be the to positively expect is of implemented occurring remaining on our the Phase XXXX, the central the final with in X Phase the Northeast in X of providing quarter forward call. southeast on how U.S. We transformation to impacting approximately We half our will phase phases Midwest, impacting

will network. well transform are delivery regional city both delivery we transformation lead have When and network in the with optimizing as pickup savings haul coverage optimization a The exists cost integrating Overall, and efficiency create will service to our and consistency yellow And one in network. driver efforts interacting will and network the capacity our we support haul haul currently services. efforts line drive As linehaul our enhance both to customers help customer the completed, and greater eliminate that network for brands. the and carrier, service pickup to long redundancy. the to the eliminate to expect operations operate as we regional super-regional overlapping as we between speed, and optimization efficiencies long

the weather to benefit, future. in and consistency promote the allow As That carrier the of negative some will impact will fluidity added an a as network. winter of operating in super-regional mitigate us

to goal new drivers on training in XX we We Academy Yellow’s Pennsylvania in recruiting. Carlisle, March place a of Truck Driving in XXXX. to XXXX our reach continue priority And opened help

our pleased opportunities but good partnership, jobs program. are with drivers, with and we customers, over ahead satisfied important now results. most The meeting the I'm for U.S. that competitive about mechanics apprenticeship with and progress, the benefits closing, And and customers. turn provide I quarter, recruiting plan a XX,XXX Yellow of shareholders. stay strengthening our and needs focused our call we our while comments. challenging One Department with some first back assets managed of career more day have. to to path and join team for safely yellow our the on mean Labor's the academies what team. will excited each the In through remain we Yellows Darren, not employees Our more will employees continue dockworkers to than our closing

Darren Hawkins

position for Darrell. and I time am employees Thanks that who successfully for you, you any complete our happy to Yellow. this to Thank company transportation to our customers provide and to Yellow the make progress communities. may now proud We transformation our continues answer your have. be services freight afternoon. One and The to the of team the grateful efforts essential questions would

Operator

Please go ahead. from Our Jack first comes Stephens. question Atkins

Jack Atkins

questions. afternoon, Okay. Thank for my taking Great. everybody. Good you

will to we if to start, you guess to to second see of about impacted help could the those do noticeable going as really in Or be savings few maybe maybe that? most not want the begin it I you before would you to you through implement don't to months, I guess guess, quarter kind be to you expect can begin that. think next to the west you guys network results? quantify I And I'm I think on be the quickly, over So in ask we And us the to changes the would buckets you what -- P&L the think savings third know in like expect start materialize Anyway by. will how those quarter? it,

Darren Hawkins

improvement progress. Darryl, financial this I start to specifically in And good about let then I'll this quarter there. I'll is you create our row The us news with We not the in fourth it Yellow When our past. is news what in Darren, allows I the is And have to our buckets, this this delivery to our That's don't operation. of pickup operation continue only us had, wait for transformation. through two but it think improvement, results. QX let outpace the be it, and Jack, sequential from the those. all speak to going believe cost improving we have capacity that. while The strong company to doing is just optimization and more One Darrell it we've completed just in being and largest good on delivered, will like efficient city QX, customers, seeing take line the from more a see and to to with March be the that haul

Darrel Harris

our Good of as the XX% the script, afternoon, Yes, terminals in we network. XX outlet, this or Jack. impacts mentioned overall of

So board two pickup are near the Darren's trucking LTL and the to delivery start savings operational on pickup top those facility imagine are an can you those point, costs, some near we and the such, that these right management and delivery, in routes, certainly immediate, linehaul, savings away. and environment. To obviously expect be and cost of immediate in coming related of synergies, optimization cost would reduction

But optimization to the a every impacted gets So line we huge going in the entire that network a in as may as this phase. longer everything of each we're well little is impact schedules, take excited that the under Yellow. the and that with reduction haul together Also, bit here component. start is One those, optimization component bring to as

Jack Atkins

Okay, that's now, encouraging. that's,

start of all so we're same see that XXX of through be seen the here in we're So to basis baseline the same and or we're we I the sequential then road the trends. rubber or there? I want quarter the terms the just be better that than should on year? to so guess, sure results mean, we Dan, guess begin hitting page to points as maybe all to -- in start going we've historical improvement the this on sequential expecting accelerating, to is past, make just go page I I really

Darrel Harris

for Jack, the Darren to and say, prior quarter, me we operating comment that, ratio I'm let and Yes, over year. question. good straight first the an improved pleased I’ll first fourth had

I of And over XXX that a it basis that we points OR per expect did OR there. improvement see employees and XX opening normal effect the mention If hour point our out, to April for, you historically, can even of to qualified on call an that, outperform that of wage be In we union my QX roughly, which from the from QX, into sequential is that cost the above we comments, And wage about increase. expect X. do went headwind to XXX with perspective. to a adjustment living But improvement. impact basis XX that historical XX% we

Jack Atkins

very Okay. very That's encouraging to encouraging hear. hear, to

So look yes, everyone the make of the you the past? guess I shocks the we've was once less kind the and shifting what in will and time integration and in seen I different, January, to maybe back. mean, guys time a which gears bit from COVID be guess, that susceptible is challenges specifically as taking guess, related whether, I about some of obviously, will to experiencing network February, sort I the network a of forward, step One Yellow, complete,

Darren Hawkins

that companies and together winter familiar network this with LTL spoke the put as to the group than at operated all It's so Dan, like becoming. same Darrell weather period we're it's got Jack the can and freight. happening. that system that, all is very format, and we're as network YRC to carrier the worked Darren because a quicker super-regional hub a when And that. speak so affects super-regional carrier recovery heritage the quickly of you've in right a I've

that for weather of we're the actually weather sometimes So happens, after a it of weeks, in reset and can complete and talk events, by network talking a that to days. month several restart and to lead Yellow, February in actually recover limiting One our we in even the to had weeks, case, the can do about weekend, come will about on finality few we then the when length a what you where operations matter depending to on event a take network

allow great recovered news network to reset. We nicely So our that The worked. March. is in

well, and is operating network in fluid Our April.

standpoint action, in the February we a paid fortunately, saw able it tonnage of normalized we'll respond returned to past. from to those you than be a tonnage have However, after place the events we decline in to that, and we more that took but because been but quicker that we took

West I'd the Yellow summer. speaking that like the on actually The address implement the was those other piece One in in to to, changes that Darrell

So around QX when were referencing mentioned you you QX, that but it, will be opportunities the Western changes.

Jack Atkins

in Thanks sense. guess that. clarification. Thanks makes that no, for feels Okay, for that like it already Arkansas, summer. I

So of I'm already kind there memory.

So…

Darren Hawkins

It's the as well. same in Nashville

Jack Atkins

out tonnage Last we about that concern turn else. seasonality? patterns? in certain it way trends there an to you of to are that saw some of signs kind general, move freight over Any But, think normal there think is about, lot with, And line to year? any you in the expectations in normal way places. that? and as help somebody great. we just and about there's think of April question, kind through economy worse slowing better Would I'll in the guess us of of relative what the customers than, maybe your when about than telling trends seeing was their perhaps remainder the Okay, I April, awful about seasonal to you say

Darren Hawkins

again. Darren is this Jack,

is So encouraging the to price XX%, part XX% contractual the about April increases.

range. were that in we think that XX% contractual I in down I've balances comfortable like digits tonnage, over that got I'm mentioned all QX, profitably. market, time, along very Dan the double this will when at So stronger that do of the and pricing XX% are to when increases beginning tonnage much that's that Yellow proposition it is we grow to a do we One that at company, bringing and will the starting value but plan we're

have retail LTL, when improvement industrial of demand. But half and outlook demand things home your like the business seeing is firm. and even seeing, largest the to at interesting an are happening also larger, company, In And percentage the companies, second our of about from side. there, sectors. most industrial on what strong our in we overall on what's exposure actually side, the the though we're On standpoint, customers note, industrial look you our question larger the are a we're

position believe summer. So the anything to through have I go on good left And our a let we're business in out Dan that. add I on might contractual I'll that

Darrel Harris

we Yes, we tonnage from day April, I from about bit up from are flat just actions on the a was that still historically, a of to February. say a March recovering sequential per that but basis, actually X%, this took little year was basis, Jack in usually

I entirety that historical of and months. or expect X% would I change, QX, March April our if is normal improvement which see to of then April in So from May June to would at that look two each the about May, we to tonnage those

Jack Atkins

super Okay, the that's time, Thanks helpful. again guys. for

Darrel Harris

Jack. you, Thank

Operator

comes of next Bruce Your Stifel, question from please go ahead. Chan

Unidentified Analyst

afternoon. thanks Good our on for questions. taking Matt for Bruce, is This

Darrel Harris

Hey, Ed.

Unidentified Analyst

guys it going? or your provide to some the CapEx And it where year perhaps underlying as Could ago? maybe a some details guidance. two fleet then, compared well, around of you key components the age How's current maybe stands,

Darren Hawkins

age. added, couple still that is of from that what But we've tractors the of that percentage and the he don't we this added specifics years. we've it Matt, by let brought a disclose and I'll can. we aspect, Dan, Darren fleet down what

Dan Olivier

years. mentioned specifically down tractor Darren come has age as fleet Yes, about X.X our by

the ages. So though there, absolute we improvement share even don't what big

capacity times there, for this guidance some still disruptions comments, to trailers, But as impacted chain especially I the and million production the for of remained in production. tractors my CapEx the as opening the $XXX lead in $XXX million. well As mentioned, full year have year for supply

end the of of range. that will a As be that result lower at

to in second the a on as supply that has on to we year. move quarter. for it work us. have updated of the picture we timing better still year to it's have production chain But complete impact a and OEMs keep to continue through early should the But closely We the view the with too full the specific

Darren Hawkins

utilization And two fleet benefits that frees our is trailers, Matt, the we're to our drivers we two I'd this same make not Darren is to one what changes, going as like Yellow standing of asset two up. of increase One again, tractors, customer is, those add the to actually dramatically

do if into see So of we good the team bringing even on his done costs a job has keeping network, trailers Darren instance, the delays for rental down.

some so, to. if need free good iteratively having will about run One the in equipment positioned We Yellow throughout we're the that QX of will we QX, others the to I feel pretty good care longer take we're up we will way customers. and equipment also where But be we optimization need through efforts our at, around

Unidentified Analyst

light Excellent, to might One environment, respect should the I of plan with super market conditions broader in Yellow current helpful. change, guess deteriorate meaningfully. really timeline, how the the here

Darren Hawkins

final track, this decline. XXXX. and wrap no year. doesn't a external that Darren up an multi-year look changes have we're these last ideal going One economic be That plan at Actually, on market again, create well referring it, phase. regardless transformation to longer we're Now, positioned execution One to is tonnage like get We're to Yellow year stay were change we in of in When opportunity, And the we're in is in our We'll efficiencies. the the the of to is we the it I because this conditions. to Yellow changes. to making place say the why

Operator

Group ahead. of line next Your of Wolfe Scott from comes the go Please Research. question

Unidentified Analyst

Aaron time Scott, This is the taking on for today. good afternoon. for Hi, actually thanks

Darren Hawkins

Hello, Aaron.

Unidentified Analyst

Hi.

your year? the rest you terminal an plan plans? the us reduction for can First, is latest the Thanks. What of on give update

Darrel Harris

we we're changes nine. speak. the we're west, XXX Certainly, today at terminals reduce The making in will as by that

around at door we're optimization. example. going to where want give of few add minus through you the look I end It'll land As go But as at to or when be right I'll do plus the year? count. we Aaron, you that a And XXX an

make Yellow has several these State in Let's XX. Right weeks California, changes, California the terminals XX from California. will to that XX of in the over now total when take next go we number

So only five. a from we those in standpoint, door will doors we over XXX facilities that'll at And I reduce be But California. reduction. XXXX And will giving do just protect for have that door available still it to up make also when coverage. plan complete going because want we're to it And we clear our geographical Yellow. One not customers, capacity we on we're growing by

Unidentified Analyst

you thank recent I as for yields it? tonnage that you given year Thank strong. and color. have the of for of here, get think to, and rest trends, how more out And to helpful. Great. and a moving the yield you moving Got you guess now, I as look volume? Or, pricing just growth are was price on been focus mentioned, pretty as about Right you guess or do forward your trying forward? tonnage more is you back

Darren Hawkins

This gaps is Darren, that start in let and and leave. I Dan then fill any I'll

I to and will now in XX% to prioritize price the we're over to comfortable So April, us I'm we ideal XX% position it's increases think the company for at The come. volume that then I the XX% making decline. that changes we're years with XX% make contractual for yield to to tonnage The many environment saw levels volume. an right

close throughout we gap think can I'll the year. that. Dan I make around let any other But move comments as forward the on we that

Dan Olivier

trends strong Yes, paid emphasis we the just pricing favorable on our a continued execute perform. for definitely putting QX, to the through that appropriately strategy, yield on pricing continue we getting work

there's be mentioned before, that done to I on As always work front. more

going forward So with And what that picture the we're strong. yield remain going overall, I say is what is to the expect so big pleased done I'd we've gotten that I performance far. guess

Unidentified Analyst

make if one just more. Great, can And I it thanks.

guys -- see just the in Northeast now? you right the of impact fuel any the did on in diesel in impacts Just the quarter. shortages Have you

Darrel Harris

by we fuel say were to year I compared seen diesel fuel surcharge, haven't we fuel up and look the into prices other the No, impact expense, fuel oil prices, being roughly When during on increase our fuel like take we like higher tires up the When or prices the you XX% costs XX% through Northeast. higher the of PT any resulted fuel broadly that evaluate of to if last in fuel looks line. higher that of XX% consideration offset higher are raw even benefit higher the oil or equipment, higher there, surcharge surcharge and go and is benefit the might propane a in QX impact believe revenue, prices only whatever speaking year-over-year. the prices to it tied costs, in between prices, be there if materials net of When which any into shortages revenue we incremental production that prism relatively small. bottom

Unidentified Analyst

thank guys time. the for Okay, you

Darren Hawkins

Thank you, Aaron.

Operator

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

Darren Hawkins

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

Operator

presentation now conference The today's disconnect. and may for you now is concluded. you attending Thank

Yellow (YELLQ) 11 May 222022 Q1 Earnings call transcript