YELL - Earnings call transcript Q2 2022

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Operator

Good afternoon, everyone, and welcome to Yellow Corporation’s Second Quarter 2022 Earnings Call. All participants will be in a listen-only mode. After today’s presentation, there will be a question-and-answer session. Please note this event is being recorded. At this time, I’d like to turn the conference call over to Tony Carreno, Senior Vice President of Treasury and Investor Relations. ahead. go Please

Tony Carreno

Good quarter operator. Welcome Yellow to Thank earnings afternoon, conference second XXXX call. Corporation’s you, everyone.

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

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

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

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

Darren Hawkins

XX EBITDA $XXX the increased yield another freight to One of end the since strong is as company LTL compared Yellow improvement the including through In $XX.X focus adjusted the We revenue million Thanks, point another for moving demand by profitability year-over-year, operating trends Tony, is and on our exceeded good a have environment was the QX, our In of XXX you on last QX, XXXX. achieved improving income our Operating fuel LTL a basis quarter QX, quarterly our XX XX.X% highest per which for of afternoon, network, the performance. to call. quality everyone. which pricing and Thank Ongoing reported pricing contributed and carried result year milestone which nearly QX. favorable. joining ago. hundredweight, capacity ratio, favorable into has of kept million, to of journey Yellow. And months kept

between For of tonnage on XX.X% internal and July X% month a the QX Yellow year per our average ago, consistent negotiation. was compared X% was LTL which contract expectations. to in down with day

As we per growing regional transformed return the fully to carrier, tonnage network expect super LTL a operate to to as we day.

in revenue, expense, and decreased Our strategy by it purchase of XXX to percentage as year basis quarter, incremental includes compared transportation a mitigating a points the ago. second

transformation to the to Yellow. One Turning

integrate Phase YRC legacy summer. We as our long-haul will long-haul year. X the to have Freight support Phase network to transformation the as plan Western expect the the well in U.S. of X We to and of optimization completed and service, and and the network the integration network execute both end impacts terminals of runaway operations. around pickup regional this XX delivery entire

the transformation starting One for believe We well-positioned we have that to XXXX are beyond. of since to rest the And changes made Yellow. significant and company many we the

several significant exciting is One us our to the financially. the capacity there fleet to a add the operating Once years we modernized joining regional customers average will provide And most that we over of details with best an remain quarter. years, is I for is has to the results efficiencies, savings Dan company today. more you again the lowered need additional believe will cost recent improved operationally investments of in without now added What we all about age who as to in in years. financial one liquidity expenditure and QX, capital strong carrier asset super will of tractor will Our a we share the made solution. the in we transformation the me expect and network Yellow, couple to and improve terminals, call opportunity utilization, at the new complete delivered some enhance turn and Thank by be

Dan Olivier

Darren. everyone. Good afternoon, you, Thank

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

for $XXX of above points from LIBOR plus as more down adjusted LTM LIBOR adjusted basis we to as $XXX a LTM than on EBITDA. having points plus result goes points basis million As million borrowing achieved cost loan our to remain EBITDA XXX long by in term of basis XXX XXX

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

per the down available weight shipments year. June driven Total for up XX.X%. XXXX, per per July million to in capital was million LTL LTL compared to to day are shipment. capacity million Sequential million. approximately LTL tonnage XX.X% decrease down supply trailers, per was basis, first and shipment second X.X% million and turn $XX.X and expenditures On in LTL tonnage fuel primarily in XX%, was XX.X%. million day last for we to XX.X% the quarter million LTL Excluding a guidance six per by up compared $XXX chain $XXX.X will range to trend year year months to preliminary a was prior $XX.X follows, range workday full day, revenue LTL call compared and for down a decrease Total year of XXXX $XXX disruptions $XXX a per XX% surcharge, $XXX.X second capital as production expenditures tractors tonnage the capital down May in of Darrel. first are down expenditures per for LTL XX.X% hundredweight to the I revenue April were lowering continued to our ago. million quarter were six the months compared of the now to from a limited over $XXX due XX.X%

Darrel Harris

everyone. Dan, afternoon, you, Thank and good

Yellow U.S., transition carrier operating the X As from part and terminals heard runaway end plan lowest the One you and to as year. the YRC the Phase in include begin is risk XX to has legacy of complete of super the regional which optimization will execution to Darren, profile. western the around our freight the a

summer. west plan in to this to the network our on be Our integrate linehaul implemented the is delivery and schedule and operations pickup

We will apply learned remaining lessons phase. during the

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

of generation York drivers company to also of in Mexico, Albuquerque, Tracy, committed the expect Detroit, to total These professional reach we academy an sponsored to Turning And our added to Maybrook, we us New open in We hiring. XXXX and next New recently remain academies bringing academy Columbus, training safe Ohio, new this training drivers. driving year. and goal hiring four month, This the should help XX. new Michigan. California,

in while the Our be with proposition. enhanced will provide Department that I and back the journey turn our and to Apprenticeship academies Darren employees, results customers, benefits with U.S. we lies jobs call In to with our the comments. much know an quarter, shareholders. I’m the second now One that are opportunities closing, partnership more Labor’s we will of career program. for also the there’s strengthening opportunity value confident that pleased positive over completing for but ahead. provide competitive closing That a Yellow will good some

Darren Hawkins

that you their communities that we One improving Thank any you, quarter. your to operationally have. company of in results be in. time The happy Darrel. on Their help customers deliver continue they I questions answer position best possible our proud the solid focus Yellow puts financially. and live for hard Thanks employees and of our work to this afternoon, the would now am and the transformation this may efforts to

Operator

Ladies Jack and from go question Stephens. ahead with gentlemen, our your question. Atkins from comes first today Please

Grant Smith

Hey, good Jack. guys. thanks my on is afternoon Smith question. And This Grant taking for for

Darren Hawkins

Grant. afternoon, Good

Grant Smith

thanks. Hey,

how So change on relative could to the the seeing of month you provide in and are you a the maybe bit in trend expectations. all pricing an July went little your update market. And momentum any

Darren Hawkins

comment the on good with in momentum let the LTL whole. standpoint, a and as Darren consistency, trends From script Grant, Dan a and we’ve others. I’ll discipline this and the momentum seen pricing July the good is industry start pricing from

that. what’s We’re pleased with and our from strategy developing

pricing a on standpoint. confidence a lot I’ll momentum in got come July let we from Dan, see other in we’ve So stats. you of what

Dan Olivier

Grant. Yes, good afternoon,

down basis basis remarks, tonnage quarter and July As is on with was June per sequential day our which X% LTL line year-over-year between for from roughly was historical X%, I XX.X% to in was down my covered a trend. right in On July, day XX%. a and our tonnage the per preliminarily year-over-year prepared down

to a our from in economic we tonnage significant historical So based to would on normal in [indiscernible] broader demand, from expect QX. see that, perspective QX any sequential tonnage changes change

Grant Smith

for that. Yes. Thanks Great.

operating So third that quarter? you us under we should normal again, And form sequential look ratio? think would look you this looking how into the at of or help what about seasonality like? quarter, that progression expect does outperform to can And the seasonality

Dan Olivier

Yes, sure.

that say during those to million The a quarter that items able we were ratio basis did the $X to roughly quarter. year-over-year we the favorable of work two First, OR X.X points. basis also let accident on have related of We the and gains second to property improve comp XX claims. operating was impact for me insurance of on on consecutive And our adjustments reserves disposals had quarter. approximately net I’m fifth million pleased our

those, year excluding XXX been than which better than first would’ve and range, last in the quarter. points So basis OR XXX the basis XX.X been still better points would’ve

we I QX jumping So degradation historically points. to think XXX XX about move of And off see as OR with from now points, to I our that that we historical our basis think QX, our in to trend. I from I mentioned, QX XX.X% that a QX just with line about would be being in that OR as to sequential in change expect again

Grant Smith

happen you’re over working towards a But probably a that you, that need generates mid-XXs can’t XXs lot industry, Got there comps there. reasons are least LTL why – OR. of it. execute Is think get have last clearly look unionized be a to across you and when the Darren, here peer ultimately one to when have long-term on cycles. mid-XXs you what And a to high you most at there you when multiple for any things public a OR, structural you able about OR

Darren Hawkins

talked customer Yellow as Yellow. the customer we direction. the Grant, of and network financial holding will with improvement. as know right than Dan One quarters That’s we’ve And as it for with other five And regional go the about. talking with along the we’ve what out, the don’t been pieces I separate One and all company the That’s about long guidance, then this brands demonstrating give we been from Yellow we’ve and pursuing wants proving reasons wants that will in we what what super It’s in rather called four consecutive customer. is the a those starts continuous align way. some having make all what that Darren. comments

that about about our of continue One to President Yellow and bring truly Yellow in and talk improvement, move it in. will Darrel, I’ve that benefits let is to So One the some

go So ahead, Darrel.

Darrel Harris

you. Thank And Grant. good afternoon

redundancies the that well the have as operations, all think when today networks. utilize capital. say better asset When just about opportunity you human As to have linehaul still we four opportunities we front utilization, think equipment around have the you and when fixed under about Darren of and our us umbrella, and facilities that different four really the that Yellow, different in are four is LTL asset as different our I trucking exist running, our pickup yellow better delivery One companies that mentioned,

but opportunity better improved asking operations excited only point with most really to drive our asset us we to think this for improved importantly, we OR. to also streamline for that customers And value so not solution Darren’s like several greater get utilization, an growth allows streamlined for about proposition when the who our efficiency for have been years. But to drive

come great things And to here. And bring things the as updated certainly as so the way many going these everyone continue more together. we’re keep work we to journey focused and along we to

Grant Smith

quarter. Thank you guys great and congrats on a

Darren Hawkins

Grant. you, Thank

Operator

Our from with Stifel. Please Chan your question. question comes from ahead next Bruce go

Bruce Chan

here. all progress Everyone, afternoon on and congrats the

think help kind of maybe about term the some level. your fleet good spend towards But when that do and network. normal back need be the normal Just rationalization maybe to investment gave to year. think you can about you that back you average order might as in is industry color what us get some to fleet in of you P&D CapEx we’ll little takes your a and and the puts the a us longer for see Can agent? think get to we a that on where more bit linehaul And CapEx

Darren Hawkins

is where Hey, A one. Darren. the trailers Bruce. two right customer. that This big that and start direction, tractors, One I’ll asset piece good at Yellow of afternoon, with utilization same in moving is two the

have of newer what will As that and years, forward on improved a equipment I’ll thoughts utilization we’ve appetite the network. pieces, equipment brought because we CapEx we time, eliminate into the comment it our our over will then And although the Dan are. those by certainly basis for two moving diminish on let

go ahead, So Dan.

Dan Olivier

Yes. A Bruce, afternoon. basis, long-term good

I technology it’s infrastructure. lot think terminal a equipment in tied about CapEx up and of really

invest that our transformation to doing that aggregate, a the But When $XXX dollars take it which with able have long-term that on luxury the in as when would really side. to and consideration, into on make we’re capacity investment made And without to us we all significant the to changes to in I have grow this that. evaluate infrastructure million we time any the We be gives terminal XXXX, go these would long-term. having down comes we not I basis where think space to equipment and now, materially range. different guidance Darrel XXXX entered of million ultimately land I expect be it year we need a $XXX for forward. as executes that with about to too huge from

Bruce Chan

one rate might think debt you, Okay. and you’re That’s what is and here pursue to debt right now, come of And another $X.X bit think really you’ve that billion. helpful. opportunity as an maybe about EBITDA, is over Dan, you here? there a then with level the where And you with be a happening as the where refinancing for about environment,

Dan Olivier

performance. And the progress improving progress our as structure, we’ve far financial structure that current a our capital billion. certainly result as $X.X so about of growing into in we’ve with of some terms made cap Well, talked

is XXXX, less million. capital leverage are our times for That now Our just us give said, still coming. the first when today. over for the have I’d since say room with the not than $XXX We improvement total X with structure there than what have operational was changes and until still would options that ratio think even maturity XXXX, we still that some that’ll we more still is better time

Bruce Chan

And a Okay, quick then maybe here. last just great. one

Is the One looks? as converting Yellow there more Regional how think dynamics, about that the lane some basis about line network length haul footprint or affect of maybe yield a per anything a to Super As far national of from revenue on One. regional might as that move you of to a and via that think shipment, top

Darren Hawkins

all Bruce, a transcontinental facilities is we going a supporting waterline the to I go with a over about significant think we’re XX this couple good when our customer will what also going line they the top in transcontinental strength still Regional Yellow standpoint tonnage the just the that length position like timing think Darren. done Especially will is a that we Western do length per that haul, What have shorter that the just of on smooth. I of will of about is those piece, we our changes foundation have have be already we we and mixture the When now. got an yield that right in the in a we’ve hauls, to giving got just is have today. on Super we’ve then to We’ll changes about of the you from that operation. different consistent as and operation by the industry about want, this on well. overall when about standpoint network that in protect. end tonnage aligns yield companies it’s when position think happening the that. ideal we’ll transit on and regional Bottom service think the in changes make And of just of from coming, the increase got we’re And competitive time know year the in the revenue we’ve And right line we a think weeks are shipment.

but length and shipment of wouldn’t the per I think So improving major of terms changes would of revenue for in haul and terms think customer to time. time, value over over I our better an

Bruce Chan

great. on Well, congrats results. color Okay, the and I appreciate again that

Darren Hawkins

Thank Bruce. you,

Operator

comes Please with Group from your question. Wolfe ahead go next Research. question our from And Scott

Erin Weed

time the and taking Scott. on today afternoon. questions. good Erin my for Hi, This is for Thanks answering

Darren Hawkins

Absolutely.

Dan Olivier

Erin. Hi,

Erin Weed

of talk so was a you a I impact the fuel seeing in this about more between growth quarter just first, could the in large spread guess little quarter. hoping guess, fuel far I XQ. you’re and yields you bit net had pretty and Great. of what I

Dan Olivier

is this Yes. Erin, Dan.

diesel roughly were last XX% compared up to second So prices for the quarter, year.

So that being up revenue XX% resulted fuel our year-over-year. and in surcharge between XX%

look So so the we’ve course, as that over having the but little month to bit the we’re into the prices excluding full still weeks, including will past all like. few a how what moderated one It’s I quarter of and hard that’s only gap really that versus drives And fuel. us. exactly mean quarter fuel behind seen early know have

Erin Weed

Got it.

And then count, for kind thank about end. on terminals? do where of more to that also around last by that. any guess Now, And guess the it’s or cut year call you XXX at Is you talked earnings being see know then you in if I I terminal plan? just still falling, like of I tonnage continues stays kind the potential terminals

Darren Hawkins

Erin, this is Darren.

year, We’re XXX. we weeks will here by bring of end the we changes us next in XXX range. XXX. that’ll Western the When currently few And be in the the to then execute at down the

now. have profitable for right freight We capacity

to We are capacity. going that protect

geography going not these in We’re to give up changes.

terminal the or to number it’ll But full be comes around minus. plus count ballpark So in XXX fruition. One Yellow once that could the fluctuate

Erin Weed

it. Got

a I But if I you earlier. Okay. to of guess I in you just trends then of X% guess, know, on into you’ve trending expect are like to throughout touched pricing pricing the that range. now know sort XX% Thank so could more seeing general stable guess of that were in is you July, quarter? kind I moderation like And any far you. seeing – I April, you and just XX%. the contractual X% rest this of And do ask I year-over-year kind renewals were one more, noted the

Darren Hawkins

number and renewals, bad past those comment Darren. on our contract The the exceeds we’ve a renewals are We’ve far true numbers the very up. it’s contract evenly not I I’m yield. Taking pleased that compared still the out with in typically when those, a our those what will month overall, in they somewhat weather month see whether of Erin, renewals are our around to yield yield look reported and that. numbers this pleased pricing. with month for I’m is we is one I the contract like July renewals those any path seen on as XXXX from beyond. And way spread taking lot a say at throughout and yield we to what year at. have where varies, have pricings the but of one industry I confidence especially

Erin Weed

appreciate the all Thanks Great. color. Thank the you. for time. I

Darren Hawkins

you. Thank

Operator

that, And turn today’s concluding to with we’ll I’d to question-and-answer ladies gentlemen, be remarks. back the over session. for company like conference the closing and call any

Darren Hawkins

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

Operator

you ladies presentation. thank gentlemen, And today’s conference call. attending do conclude and that for today’s will We

may disconnect line. You now your

Yellow (YELLQ) 4 Aug 222022 Q2 Earnings call transcript