Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. And welcome to the Yellow Corporation’s Fourth Quarter 2022 Earnings Call. All participants will be in listen-only mode. After today’s presentation, there will be a question-and-answer session. Please note, this event is being recorded.

turn of over Treasury to Senior Tony like President Vice and would the to conference Carreno, I Investor Relations. ahead. go Please

Tony Carreno

Thank everyone. afternoon, quarter call. and Yellow Operator, fourth conference XXXX Welcome Corporation’s earnings you, to good

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

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

format The factors. call risk us allow to not fully of all these this discuss of does

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

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

the turn Darren. call now will I to over

Darren Hawkins

fully to you Thanks, as supply chain capacity the QX, Thank and inventories notable Tony, capacity to QX. from good call. retail demand afternoon, cool require the already for LTL begun economy With for In drop down. our joining stocked everyone. prior sector we less to in saw had a continued

longer size kept needs adjusting term We the needed use from our in of to of a mitigate workforce sale of the of an align several demand as from the from no addition efficiencies to the began meeting network our cost proceeds gain the the transportation, slow adjustments, our a growth. to we phase of near closely of customers’ use to sector following while the transformation. During excess manufacturing on net of quarter, portion the The In reducing the we sale response, focus on the a including terminal result with loan. managing quarters structure purchase headwinds. one help of also term down our benefited a also down our

the in pricing tonnage LTL environments slowdown an face is of of and Even the experienced many economic have this stable and years. we one most declining

of the XXX, year-over-year profitability the inflationary have to We consistent of including freight per with January network offset stayed the economic operating XXXX and the later ratio XXXX. improving X% on between average in LTL the reported operating increased through contract year, revenue and and on income XX.X% despite financial fuel our QX In significant improvement pressures. improve Yellow’s strategy slowdown for made since Yellow yield best company moving cost and in X% its negotiations, month

which field the the one meeting end and plan the with The changes to the date concerns closer of the Turning the unions around process phase any mailed pickups phase is efficient the the externally optimization. two experience. one. of to us process been or in are in timely have and the phase the terminal implementation optimization network are network phase to U.S., in U.S. customers, has critical of contractual make more are same we customer positioned We us questions and we optimization when determined. to enabled to two Yellow deliveries to Eastern unions, as following recommended those and communicate to which an local optimize both Concerning coverage western real

investments experience customer self our transactional include XXXX service on capabilities continuing to enhance ahead, technology and our features provide Looking to in our website. priorities with new

speed of help regional company. us and the a provide grow to in network. first offerings fashion our customers Serving streamlined count of our plan profitably shipment a will also super We grow suite our utilizing class service

us you additional Thank quarter. I now about joining over to for who details Dan, again will the call today. turn will share the

Dan Olivier

Full in Good XXX revenue million XXXX. XXXX operating which XXXX. full compared billion everyone. year of included was XXX.X for you, This income EBITDA to Thank operating gain was million million million, to XXXX in in Operating net X.XX XXXX. million, XXXX year a property compared Adjusted to XXX.X XX X.XX on Darren compares afternoon income was in disposals. XXX.X billion

XX.X gain XX.X income for XX.X of continued fourth the lower X.X% was the XXXX. XXXX fuel net higher million, by year. the fourth to The EBITDA billion quarter in quarter to compares surcharge yield and X.X in XX.X in million was XXXX operating strong quarter decrease X.XX revenue to compared volume, offset including property revenue. income in XXX.X of compared in revenue fourth million, year-over-year partially This operating disposals performance million attributable Adjusted the million. For operating was was billion on a And operating XXXX. to prior

fuel compared year up XX.X% a surcharge shipment ago. LTL hundredweight up XX.X% to revenue was quarter Including revenue per per LTL fourth was and

XX.X% to down Sequential per and down On Excluding tonnage XX% follows; compared in were trend shipment basis, up quarter November per compared LTL historical trend approximately XX.X% LTL shipments sequential LTL preliminary December to up per down by down driven the XX.X%. LTL LTL per was a decrease in January LTL LTL was per down was X%. our fuel XX.X% day revenue ship. day a October last a workday our X.X%. from year. to surcharge per tonnage X% decrease to was of the year tons per On as day XX% roughly X.X% compared XX.X%, in for tonnage a fourth and hundredweight and approximately down prior was up weight December January, day basis revenue LTL

million the million, the compared compared quarter XXX.X XXXX. the million capital a of XXX.X fourth compared XXX.X the in is expenditures XX.X end liquidity ago. were for million were XXX.X to year at quarter to XX.X expenditures Capital XXXX fourth million, XXXX. fourth to at Total of Total for million quarter end

payroll due the the deferral the for of a As provisions XX.X Act. December, remaining in certain taxes Cares reminder, we under million of paid

in capital term of early we early and The strengthen notes in excess reduced of continue pay we January, the quarter facilities by that our October, the CDA outstanding lending XX our through million end have sale used off down million January. XXXX fourth facility XXX the the the terms Much nearly pay agreement. to extension with notes, net to of like based due debt the XX matured at of remaining the on asset the structure. simplify of paid our loan with proceeds In combined from of consistent million CDA the the

back I will the some now call turn to closing comments. Darren for over

Darren Hawkins

of the customers was another think our unionized one the needs tremendous When team’s progress our at XXXX implemented and about of Thank carrier. passion Yellow. I’m of network very accomplishments to dedication I LTL employees’ you, Dan. and our meeting by proud year largest of ever executing changes

employees customers, strategy. from the to expect multiyear shareholders benefit We this of execution and

this we excited year couldn’t XXXX, a be As XXX head anniversary future into the company’s which is more year company. of the away about just we from

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

Operator

We will now session. the answer question begin and

Stephens. Atkins go comes today ahead. from Please with Jack The question first

Jack Atkins

going afternoon, I to promise. have afternoon. Darren for than Dan. taking Hey, more good my Thanks and one question I’m this

afternoon. So good

we wants if better take kind heard know maybe was guess I I think with this a to pretty for start January? of could I feared. than most who little bit than or don’t consistently better we’ve folks So expected

weather. that seasonality. you normal You’re Anything up cop easy maybe an would just better seeing better than December January that to attribute versus

could if talk about maybe that be could that, little Just you great. bit a

Darren Hawkins

comment certainly, contract This sales Jack. force X%. renewals Yellow any from technology as pricing And were direction I’ll bringing Darren. and those we sales customer our market. that now I’ll also we’ve the there opportunity proposition Yes, aspect. positive pipeline with especially well that a from value as let up and X% were for of the with specifics. I’m you We more what is saw got encouraged entire standpoint, the a was pleased January, the for QX to Dan, I’m force into into get think there’s the seeing we’re I also on

Dan Olivier

It’s Jack. day the XX% my fourth on was opening little to roughly decline quarter per LTL time. from for basis And I sequential down historical approximately was an I year-over-year sequential Good compared tonnage as a mentioned QX of talked remarks, a in Yes. bit that X%. about afternoon. decline trends, XX.X%. our

certainly December’s November expected. Specifically what more we would sequential pronounced and have declines than were

up from December X% increase sequential January than was which better the to of a out historical was call average decline. much X%, could you However,

is So change chance have could weather how January, from historical I know yet and of outperform to when don’t about a its X% we QX quarter we the outperforming with sequential course, the in entirety, I decent the LTL tonnage believe But day per of quarter decline sequential QX first typically X% and about think to that, decline. impact remainder that historical a

Jack Atkins

that’s the and guess, the the helpful original December the different plan, normal which know given with if to from kind of quarter, line line maybe fourth perform kind obviously were. I’m in how market had of have really but challenging about that in would thinking a bottom No, I commentary that. seasonality, just I not impact idea, been November, mistaken

a one seasonality quarter? to it maybe Yellow a you’re have of the about maybe first the bit going up of versus feels ratio stabilized mean, think perhaps that like in maybe you bit operating more. benefits, can help I the have here things Now quarter, showing kind of the us fourth

Darren Hawkins

Jack. Yes,

quarter million included So fourth our for property on OR $XX the was disposals. which the XX.X, gain

January, think XX like it is would the about from now I really quarter have OR benefit any considering worse about And the been tonnage QX associated driven would historically and line was be a I two. saw some though, a with phase the the to in few said, basis execution by about that per I December So December. for day from we still with little sequential sequential a in in see XXX now, have which, and declines things, changes phase to excluding degradation in call expected. we than we would OR preparation tonnage November costs during QX than that expect we’re But sequential as points, When at little we we one, you expecting also first from probably incurring two out, considering which and expected change. that of that phase would historical without better

Jack Atkins

great. us and bit that minute. shifting kind kind and a process think kind up that thinking go one of by appreciate Can through a kind color. And maybe I wrapped third I gears out a kind we moment to would call, be what’s for idea I two the about maybe be just the of Yellow walk was maybe to guess of point. quarter if this walk, for I mean, of with explain effectively you dragging that of phase back

Darren Hawkins

Darren. is this Jack,

So as of for compared phase XX% operating best successful the two, we’re and about process phase working our of companies. we two includes ensure And we phase and did companies, of to through of one. implementation the planning have similar approximately XX% operating legacy three network strategy. that’s one network two Phase legacy to our execution the a with and

this lessons mailing in using and We’re concerns local phase And questions the been with two any fielding meeting recommended of two the recent unions that, to the those execute phase. most around optimization. much larger The through we’re the from we’ve or changes mailings learned process on phase the one unions. to

we’re two implementation when two. stable phase date number So and importance certainly of being with very still to employees, also we’re is involved, moving is unions, focused set. the forward. and we approaching do the in local of But plan way the of number customers And phase externally the the communicate

Jack Atkins

impact one sounds you’ll thoughts broader communicate feel year, that I cost could terms communicating market, comfortable structure externally you Yellow broadly, will the of in more the of what just or that? more the market? be think this you good. your sort more at that’s mean, be in the position do to that of to about any cumulatively kind Darren talking Okay think stability have guess on I a of in point maybe you around kind competitive to guys something the do that

Darren Hawkins

on not utilization we’re congestion one facilities in at at brands asset reduction in already to delivery and and, on having the operation miles pickup West, the the delivery The same benefit with Sure. time our of dock time, in already seeing phase the convenience along course, their have customer the and customer of better service. the of cost driven, having seeing the our pickup

up and that things creating redundancy only any in keep freeing not geography All improving together, reduction of along those times mind, debt we’re the with and in transit giving this up from are just facilities process. through we’re

will significantly change and the in as be lay do to weeks. this the we benefits able we of all coming out categories absolutely, those So larger

Jack Atkins

I’ll maybe Maybe bit back we’ll last you interest year. hop little queue. question a can me, and talk in expense one for But about this maybe Dan,

You’re debt, which good. paying down is

balance You’ve of couple interest been on things should able to are rising. XXXX? sheet interest But broadly? in on rates thinking things. that to Any way P&L in the overall about terms about the think refunding rework a some be of kind we of How expense

Dan Olivier

so million, for the I’ll and quarter start. The full fourth interest Yes, for XX.X the year. was million expense XXX.X was

rate run and million is expense. now current right year interest XXX XXX Our of per between million

interest million XXX XXXX. The a floor XXX QX our of a with Our and on current was And for loans, term run per cash for interest million course, X%. million have interest full for year. rates million LIBOR between year rate cash our XX.X and is component XXX

So and compared expense the that’s in year, out we are prior interest I the right interest incremental reflected rates and cash called you’ve incurring naturally, just like provided. annual to run now

Operator

comes from with Group question go Please next ahead. Wolfe Scott Research. The

Scott Group

the give Can missed and are you an guidance in on you you’ll think be Where on do thanks, end of I you case update count? us year CapEx terminal afternoon, Hey, the guys. any it? then where

Darren Hawkins

Darren. this Scott, is

XXX. we complete mag. will When today As we’re two, of with phase be at and XXX are we

Dan Olivier

into to million XXX XXXX, get would did that jump that call. so start $XX carried we to on related on as total We would quarter just have have delivered Good expected, been we Yes, in provide guidance came million XXX and timing CapEx Those with over the CapEx. in deliveries. been third XXXX tractors and within or about We afternoon. based the XXX range on have at million.

get we a clearer the CapEx aren’t requirements ‘XX feel of year XXXX, picture completion guidance. in of through equipment. two economic of the sight have providing full yet line be we’ll quite we to and position maybe our as where will for phase For have better a we a environment, comfortable Once somewhat of what specifically

Scott Group

just to Okay, market? this Can some lot do to the volume volume. a of volume? we up have a a back? year, We of to gave price? Are back, to step obviously, keep What’s we have up year? lot taking plan What get we price a hoping to last give pushing price regain little go

Darren Hawkins

prioritize Yes. This is yield. Darren. And we continue to

As one across the we’ll LTL the script, this and in network, in we’re phase got growth equation that. continue strong to We’ve two. and in capacity efforts to a be yield I finding the we said certainly redundancies to the as The are truly cost cover Yellow eliminate about costs the inflationary story. prioritize

to the driving jobs. with in cycle be investments, going in will competition what’s demand the ready for are now, think in number be involved We changes. When poised direct on going and I be about America right the when infrastructure that jobs of that the XXX,XXX

see protecting line to opportunity by exceed proposition be will an certainly while that, got our demand the Yellow holding value ready for also on we’ve price. think I capacity, and

Scott Group

earlier, I carriers. with today, maybe about think competitive the a dynamic Are you that troubles now? there seeing after some dynamic, anything guys concerns some after share from you going competitive national right is

Darren Hawkins

other Our carriers took they October. see I that with larger general to concerned. landed. is contract that with seeing what we contract pace me predatory increase range be the renewals Yellow our negotiations. perspective. rate where was I glad that typically in the has I from X% We’ve was I’m January pricing back seen the around in pleased haven’t encouraged sets And for I’m been,

Scott Group

just we just you should an keeping what environment on? can just are then And eye us covenants just last in be the this Good. remind thing,

Darren Hawkins

LTL now only of million we have EBITDA. is the covenant Yes, right Scott $XXX

Scott Group

it stay And does does there? at up some point? Or it step

Darren Hawkins

stays at XXX. it No,

Scott Group

better can need rates. Can those from feel guess maintain rate you stick are where QX growing can hopefully we’ll to and how back we but it’s run run QX, EBITDA we we start getting I to that, start to we

Darren Hawkins

think sure. I

Scott Group

time. Thank you Appreciate Great. guys. your Okay.

Operator

The Kauffman Jeff with Please Research next Partners. ahead. question from Vertical comes go

Jeff Kauffman

a on very know lot what review Hello, you of than tonnage, was But question. to bit want talk that’s the rest of little it everybody. Down you number. bigger about Scott’s can some tonnage a up the much. is a not I follow And not is little I the And Thank XX% industry. there’s yield. in kind all tonnage on and focus more away strategic same number? falling this the

down just was that inventory really very hood, that happening talk of then the to and XX% bit you the simply the you at debate of in is is correction, some XX. allude, happening? in going as kind is there’s of tonnage when or to a environment It beneath on, can we’re tonnage starts is inventory think seeing Is of on bigger going how seeing a mix there back, a more more the the than that and And there is slowing a So saw, a been issue back others kind tonnage did down what what a difference your to address picture, come something that that’s little you will we’re change? comments particularly large you’re nefarious A, about the or and side? you manufacturing come to in what whether timing

Darren Hawkins

with Good on I’m bullish and things. afternoon, this the question bullish about part I Jeff, is of I’m America, start and on Darren LTL. I’ll how see your

carriers capacity that will I there’s available. have think for incredible opportunity national

months, As America the chain we the supply in coming starting in really see, again.

our we our are through match the to So I with see tonnage these LTL longer we networks, we’re adjusting that that tonnage moat move moving. meantime, the the is still it In national costs the strong. as carriers, around incredible and certainly no opportunity that

the me two very currently implementation phase up. at is coming waterline The okay large we’re with with

time an is make that transformation the to eastern ideal that in of the part United States. think I

us in the As right QX. our as shipments no end at is longer decline saw far of the QX in certainly and business in we the with retail a QX

as business XX/XX business to XX/XX there’s in in well that on of actually retail was time, far business voted us. do that Yellow’s a with then and pretty for is us. as side, would a the and operate the and the we well range, on past, that, divided. very lot very of it that portions shippers, our we’ve longer retail more of to evenly over the industrial be adjusted also large be closer tend and But industrial, In retail is no network customers

not and company, it’s and operating pulling business back better on If focusing on other that and the adding Yellow. we’re of this the to operates for well profitability areas purchase off transportation

As amount tremendous have completion to terminals, terminals, with will that value to or our to count build and we’ve a have the bring we our proposition we we can I the going any that proven or the shipment through we’re two add of capacity. handle to capacity expands positioned phase bring don’t uniquely driving think on on any schools, increased any drivers where of lease be terminals

business continue we’re do we’ll think implementation, watch then and through the well of work and positioned I our will to and So the until other proposition certainly phase value expanding cost on improves. two demand plan the growing our as we’re side

Operator

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

Jack Atkins

see once just willing demand and curious there’s mean Thank Jeff’s through tell? we’re generally get build the I of the thought kind take just too One, second Great. to going just stabilize that. you. markets here that I in the underwrite? is to two following half markets, the free be on on on Darren, outlook. guess quarter, on question a Okay. get this something Or of it back phase. I to up to maybe second a the around destock maybe early questions. bit Is you’re to your year, we start that

Darren Hawkins

in I’m big Hello, from re-shoring great on I out. again, America, industry as we’re and bullish LTL to to I’m going bullish going awakening benefit I that’s the absolutely over Jack, that play to on and time. have what I share going near-shoring, America, standpoint, will I think And a is an And to LTL. a said, typically industrial be believe

work demand into of Now, timing be get for those our certainly the near processes, when those term, and and phase two exceeds come going more play capacity. we’re through implemented, to prepared

on in drivers is happen summer comment LTL And I that XXX,XXX we capacity, infrastructure being know the going to for is do construction to the investments good added believe want jobs, area the I the one with truckload and to jobs it’s number and that and industry. personally that competitor

be see a that of So back we’re in And will I we’ll that’s watching Yellow. an think opportunity for capacity situation challenged. and drivers, there shortage a we’ll right where be

Jack Atkins

same But Last competitors, let kind discussion And week of guys there united carriers ways that their one improve sort that a second the half. all was and I costs, we’re improve build back of pulling for in other think unionized in with I’ll maybe with finding efficiency, me, thing. earlier find for this your of go. question call on you to to conference ways about density, reduce to collaborate to way

your really willing effort guys your back get would unturned to do Is thoughts think that think What to you leaving no guys on be sense? it you you get Just are in it? Yellow on explore? something that? about curious be You that Do makes track. to stone

Darren Hawkins

four the five last working with under companies been I’ve umbrella Jack, Well, years. the for Yellow

we’ve that going at and input for that But on we’re four those been really road we’re lot through, comments. that us. any year proud companies working we’re So have companies and that we’re for landing with about excited were don’t had we’re we’re of at here. we’re just well final terribly I what’s of. where a competitor here Yellow, discussion And a part just down multiyear home right in on transformation the the it’s the of And

Jack Atkins

collaborating thinking with been wanted makes with sense. on, folks just of your kind before chopper with there’s other I it’s about enough So mean, minds. carriers. unionized on thoughts get a I organization, to that own your maybe

Darren Hawkins

aware in the LTL part are and got so simply-simply which barriers as entry everyone interested you’re And industry estate high, the are reason of that the of, just follows that and replicated. in think portfolio to cannot so be but aware many real of, the is people that we’ve I moat a

And We’ve at as back and we’ve us opportunity got front got of and employees, approaching year, real those tremendous estate Yellow, centennial we’re it And we’re had wholly to focused what on. is progress delivering looking that to we XX seen of bring, XXXX forward the in that’s hadn’t in what right then years. going in next that after in XXXX our we over anniversary, nice improvements portfolio, especially XX,XXX up. here

So to it’s be Yellow. just at time exciting

Operator

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

Darren Hawkins

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

Operator

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

disconnect. You may now

Yellow (YELLQ) 9 Feb 232022 Q4 Earnings call transcript