Earnings call transcript Q1 2023

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

Operator

Good afternoon, everyone. And welcome to Yellow Corporation’s First Quarter 2023 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.

would Carreño, turn Treasury Senior Relations. I over conference and time, Tony to Vice this like the to call Investor At President of please Sir, ahead. go

Tony Carreño

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

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

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

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

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

turn I will the now call over to Darren.

Darren Hawkins

call. good Thanks, you our everyone. Tony, joining afternoon, and for Thank

to relatively the destocking. economy undergoing. in to the daily in results were were throughout to was of part with term, line that with typical flat slowdown our we quarter combined near QX due shipments and in accustomed considering be acceleration in Yellow continues the The In that number when network expectations the demand One without The the we demand March. seeing transformation consistent the early spring ongoing are

pricing. year to following growth year-over-year we despite improved QX, ago. strong In Turning a

quarter where strategy has a and with excluding hundredweight is LTL consistent consecutive fuel been our basis. Yellow’s network, revenue on increased to this moving the freight yield through per XXth have improve on We the year-over-year

to to strategy, stick be plan demand years, pricing Looking through is which to price ahead, gains our goal managing fuel and and with headwinds. the stagnant our the balanced we environment made in will recent maintain

month Yellow X% Two. and the increase a of of impacted contract and with our transformation, also between planning preparation In including averaged implementation elevated QX, remaining the were For following April, costs results X% expenses the for Phase negotiations. on by network Phase successful last One and September associated

States. terminal included of One enabled United coverage Phase and realigned service. in to customers, the western XX% enhance positioned optimized approximately us us the The closer has our network our to which

the of of have a.m., out One, in implementation seen X:XX a going areas broad customers shipments impact reduction the a positively percentage improvement shipments range the Phase the our before improvement missed percentage of an by p.m. in Following XX:XX customer across improvement in delivery for an departing including origin experience, that pickups, of

implementation the customers, consists covers employees New IBT receive and plan network. of Northeast implement the Midwest, an that and Freight, best approximately capital Two and terminals in strategy, communicate refinancing date Penn Phase work Southeast, focus to shareholders. and is we and path structure. our seeing will XX,XXX One is which a range examples on to determined. interest of protect the imperative of for to super-regional our the expectations demands. exceed market and the our well and to a a are the to as forward our then experience Our the moving we is One success, improvements customers plan Two, red Phase we best carpet goal why Company, look in with the are in carrier of to legacy ensure XX% jobs, Phase YRC ahead, when that customers’ externally Phase we the Holland and turn that and of with One determine is services are cared Yellow strengthen It’s today’s complete union that We

to to the expense, road due Turning is expense. basis-point reduce down improvement, to two we ago, of compared to revenue, years and a equipment targeted of over In improvement ago. compared efforts purchased improvement use show transportation continue the purchased reduce XXX basis-point XX.X% year primarily to a QX, to XXX expense purchased and was transportation lease transportation which to to

our as addition Teamsters International well litigation. law Yellow from at Directors. was Series of of the Webber the to in and of announced David to Mr. He as pleased Brotherhood pensions recognized I We Boston rights selected stock. join holder Board Board to pursuant the expert directors A of Mr. Professor tremendously is his its recently welcome the a Webber shareholder and very to and nationally Board benefit of Company activism preferred Yellow’s am Directors, a will voting to insight. the of University as Webber is by

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

Dan Olivier

and Darren, Thank good everyone. you, afternoon,

a quarter on disposals. revenue billion million million was operating the net and of billion million For income loss $X.X property operating $X.XX XXXX XXXX, $X.X in was the to $X.X compared in first $X.XX gain prior year, compared operating to including

per and a to fuel was primarily first up hundredweight LTL ago. was in million year-over-year year and year fuel compared the Including the attributable to in volume XX the XXXX. Adjusted EBITDA surcharge, in $XX for last decrease quarter first quarter $XXX.X XXXX revenue compared up The to per reduction for operating ago. revenue. LTL quarter, to $XXX.X was revenue months revenue million million X.X% EBITDA million shipment compared surcharge first lower Adjusted $XX.X X% was in a X.X%

revenue per hundredweight per up a up X.X% Excluding fuel LTL X.X%. revenue LTL surcharge, was and was shipment

to tonnage the XX.X%, were quarter shipments follows: day X.X% February XX.X% LTL LTL a year offset LTL day, per Sequential a January weight On tonnage down March basis, sequential tonnage average per compared and in than in LTL April XX% was down per higher per shipment. was LTL X.X% our to up year. down of approximately day historical trend to increase tonnage up preliminary from workday slightly basis, per up X.X%, partially was driven our XX.X%. by LTL first April, as On X.X%. is XX%, last the decrease day per which down March trends approximately by a in compared prior a

quarter $XX.X liquidity to million ago. Capital the expenditures end million to $XXX.X $XXX.X end quarter compared XXXX. first year million was of of at at first for the million $XX.X a Total first quarter, compared the the the

billion the that to January, end the remaining the at the XXXX early of paid first in million the matured the due consistent with compared of end quarter Total XXXX debt the end of reminder, the at a billion at was $XX XXXX. first on agreement. terms we of $X.XX of CDA As notes quarter $X.XX the

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

National per includes of on increases $X.XX contractual Xst Xst. and April For both, Freight XXXX, Agreement per wage $X.XX our hour mile Master and October

Xst cents includes a wage of living addition, living index which on X%. adjustment the per an each cost hour and $X.XX cents per of for in cost wage April of April In X.XXX hour a of provides our clause, Based a increase approximately this union additional January. year’s increase X.XXX price the in Xst published for is total effective also which qualified mile, the and of per measurement, per resulting the in year increase allowance employees year-over-year on consumer contract change based $X.XX mile,

that extremely more hour Freight full total the Agreement expect union and we XX%. wage current we per than have benefits XXXX our and increase April X% Master our wages of and that For nearly increase inception pleased year National X%. are in been Xst, through XXXX, became to the we the by union able between to XXXX, employees for $X Since effective

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

Darren Hawkins

Dan. you, Thank

One unionized been jobs. our network path needs, our goal for benefit The implemented that customers, to meet one and financial Yellow today we long-term Throughout LTL shareholders of ever are largest and success years changes to the linear, for results will Yellow, carrier expect on employees not has the strengthen customers’ completing the changes and making we are come. by position network, modernize many to

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

Operator

first question question. Please ahead your Stephens. Atkins from with from The go comes Instructions] [Operator Jack today

Jack Atkins

appreciate and you Darren the thank great. for Dan, Really it. time. Okay,

what on sort done. sticking to Three update able Phase for Two? when of and here? don’t Can So to we Phase could if I’m think but points us maybe major bag, I would letting do execute I of start are expect a the cat maybe you to trying had of get guess than on think Phase in the to sort out definitely initiative. longer anticipated dive dragging the terms of you you One on Two you is Yellow be that into this the And timeline

Darren Hawkins

to is afternoon, Darren with. start question Good This Jack. great and

the I to sets As for script, determine the our to we continue Two, Two. in best One really the to turn the success Phase mentioned refinancing capital path we’ll focus union table with structure. certainly then forward implement and proven The on of work Phase Phase our

to involves larger. seen success with Yellow what to Phase utilization their Our terminals. items. it growth a asset is all that make our west. Certainly, continue the bids, employees, along know Phase strategy. involves us, we property It for seen more increase the those offerings. expand we’ve can for they local One them, One what the changes service Two it the are, need sure affects Phase bring is it more in in it how stock customer. in understand of much more rolling does and unions, all with Two, the We employees the of We’ve We involves

rationalizing We’ve also We’re in the side. last reducing a debt physical the from this basis time just west. P&D our daily locations, productivity miles considerably on creating increased and on density reduced year. by And the we’ve those

hand large under us membership union’s loyal benefits to to there about are one end out that value puts that the one in The both and proposition a as So, the operating base that work And works involved. network, with deal for everyone reward the get day, expansion. for our done this tonnage creating of determined hand. I’m process, they’ll in brand one lead because customer at and jobs company, creating job a and sides will us confident

lines are still to determined. it’s the that be going it, the open, determined, communicate date and the that in path is communication to it once urgency publicly, around we’ll and but implementation interest the Now,

where those fronts, that’s on we’re Jack. So, at

Jack Atkins

Darren? terms say guess you’re the like terms there, the but or Yellow this structure? appreciate Okay. could you of that I what thing I -- feel what before structure, is sort that understand at you I’ll debt in the capital that renegotiate capital point keeps you point One structure ask have is then, and do you I capital that that just to something to get comes year, color. what And of you blank, can done do the the -- you that limited pivot in through if dragging just something next need can out, to of

Darren Hawkins

Yes.

So, I’ll in and jump as start that, let then Dan well. with

So, like we’re picking we do today, freight day. delivering every and just up

One can the pick as to Bottom a the One every our to And efficient we winners as be not We’re LTL is way that. Yellow provide they national without the do losers we have and certainly value Yellow. to proposition competitors day. in market. And line, marketplace, equal that’s

imperative it’s customers ensures that jobs, of strengthens It it the we Yellow range services the One strategy. protects that marketplace. and cared well are it for our Company, So, match our that the complete

we position strong with have very that a from to the structure. in we’re in the that capital place. speaking tee collateral up And line, Dan bottom I’ll Our

Dan Olivier

afternoon, Yes. Jack. Good

paid a in first remaining then and as $XX the last Just CDA million off of on off, I January, an upsized extended fourth ABL in the the quarter we we year, reminder, notes. mentioned, due facility

and treasury turned June have We XXXX. term mature loan towards our respectively and the in the loans, which September focus of in U.S.

them, more with with Phase clarity of just away, said, and being date be once point a Two. those the continue be position year to that in in possible have Now, the loans to to best understanding at what implementation this we we still in than term deal those actively the address time, engaged around to stay best maturities will options

Jack Atkins

Okay. Understood.

Let on me something else move could. kind if of to I

we’re of mistaken, You month seasonality. That’s the but about performing be trends in month? April first bit may half if little that I Did second normal April being, heard you talk of better see than about an right, half of talked seasonality. you with you acceleration a maybe Can the line versus encouraging trend? Dan, I kind

Dan Olivier

quarter, was day, pretty tonnage down In look XX%. in terms per it’s we month from steady, first bit April, a as at month. second than QX, than year-over-year was the lift LTL QX a expected, of of Broader, up slightly traditional seeing basis sequential and the LTL each expected, been course, tonnage tonnage better of half, better Darren the perspective, X.X%. consistent mentioned March seasonal was February half, were but On When a That I QX day than speaking throughout mentioned. I not from little as expected. lower result January of was that to per

was the second to do see And with expect and about And sequential quarter the for I in was changes be about then second jumping LTL weaker From tonnage sequential line quarter, but increase. per the we point the X.X%. February QX we better January year below March, off from to total from than increase but to up X% second we was as throughout March than weaker this a about February expected, right about to see being the we only that December think Historically, So, that day X% to expected. expected. would I than to month again, increase see what February that in to March QX. expected. we a X% historical month normal for expect historically then, January being QX. quarter, were would

Jack Atkins

I’ll hog Dan, guess are I and I is normal would into all the me last that I that’s guess, But for thinking of tonnage so, below us I’ll is But revenue through probably trend. jump the seasonality? going to to And this don’t about just operating imagine is trend, how going I how and you carrying there? that kind can trend, to OR one want queue. in relative questions. back below below through be thoughts mean you translates ratio walk If -- your

Dan Olivier

Yes.

So, significant with in that XXX.X a any said, operating one-time that ratio line like items. did much include was Darren we for pretty expected. And QX and not what was

Normally have with in the lift that less tonnage QX we I about into to and QX see the I from But and union thinking consider the level in expect operating to would of second QX some points jumping moderated, increases on sequentially point off see fact that ratio. I So XXX we to to QX, from taking this XXX good improvement expect of quarter. a when use to going improvement year. point, of renewals improvement would that basis that consideration wage March contractual didn’t seasonal historical your the effect April combined than Xst during took the be April trend. that level would to

Jack Atkins

than so You less would you the trend? -- improvement, would historical some expect but

Dan Olivier

correct. That’s

Jack Atkins

I’ll Okay. but questions. taking person Well, over it to the guys, next my hand you thank for in queue,

Darren Hawkins

you, Thank Jack.

Operator

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

Q - Unidentified Analyst

how this sequentially, for yields, but increased to of Hey, guys. on so versus that questions. focused -- wanted tonnage taking on this just are And down This -- off from piggybacking in you’ll Is -- hundredweight XQ? that we from then well? how improvement weak like revenue expect that XQ OR had you improvement Jack, per some rev situation to see environment? you just Scott. [ph] Erin at Thanks is just for you’re were noticing out start also know you can mentioned tonnage but yields balancing about looking as some -- our to think like XQ I XQ, I kind we how sequentially, yields should sequentially Like, in XQ.

Dan Olivier

Darren start for some Let toss further then me it and I’ll to comments.

than in as environment. made years. moderated, that’s are on perform, contractual in As to X% overall And past renewals, Those and do and moves to they a we opening the QX, to well making the more in expect of recent sequential year-over-year the add profitable couple a which either XX% basis the saw contractual his evidenced in strategy over we on as or would, that the work X% of expected averaging to Darren ago. year-over-year That maintain freight they we and the pricing the protect for paid we’ve in the as selective mentioned renewals, a gains basis we network. said, between very get weaker to comments, appropriately business improvement pricing a have by strategic year-to-date reflect compared just especially gains percentage year to execution comparisons yields the

Darren Hawkins

as would protect road QX current long this limitation’s service union as with place. I add is the pricing and to And the portion be that plan of agreement Darren. the that’ll just transportation, the And into network. the at to over certainly we’ll our protect limitation on purchased be in And leaning

Unidentified Analyst

margin one. that sequential we just like to it. onetime you Got EBITDA And on know should I sort is talked know quarter. XQ I think I’m How that gains as where I curious Thank had like that how XQ? then, -- can you. this sales trend trend about limited like or improvement. another if ask just well. we about Like of

Dan Olivier

say what follow to just trajectory, going it’s from I’d be. Yes. the ratio changes an EBITDA would operating the perspective, same as

think about I proxy adjusted EBITDA. good for thinking a that’s

Unidentified Analyst

in, then, with the quarter sequentially, we in these next quarter? like I like And Okay. should all like this trends guess or profitability at line operating expect mind

Dan Olivier

I’m sorry. What that part, that. missed I last was Erin?

Unidentified Analyst

can all given just sequential you’ve be you what in where operating land will trends basis just expect profitable laid an on Just seasonality. and expect you like like XQ? to we that versus Like, out,

Dan Olivier

Yes.

that Let they the on for were Fuel were and year. in quarter revenue down me just actually compared March. last part for since -- XX% of little the X.X% prices to first was up touch a throughout quarter The prices were revenue. fuel surcharge I’ll with year-over-year first question. your bit, were declining start

to was prices essentially are decline decline to X% surcharge impact went total Sequentially last flat the year they to quarter, or the in up another XX%. fuel about expected first by whereas revenue the fuel almost QX by X% down from tonnage X%. of So, QX, including

For in first would expect in tonnage QX. moderate quarter, expect total a don’t normal in revenue fuel the surcharge to revenue increase revenue in still we fuel total the perspective moderately if historical a than revenue second see was decline be a on the I basis. year-over-year than sequential quarter in and of it and QX be sequential X%, higher surcharge could From even we slightly despite lower significantly even lower though,

Unidentified Analyst

it. Got

you. Thank back. Thanks. for the questions. I’ll Okay. hop Thanks answering

Darren Hawkins

Erin. you, Thank

Operator

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

Jeff Kauffman

asked I think been questions all have the smart this at point.

So, up smart a something try with come let little less here. me and

you then operating that did for smarter much bore a quarter? the What your on size have gone of we from operating implementation planning you think are in on the there maybe being And the drag of see results having might this? been through you how drag a think stage or and PX was times Two little results a drag current you Two. One, Phase you we You Phase on work mention elaborate OR X bit final what would through as either the the but with of Could Phase kind of it.

Darren Hawkins

afternoon, as Yes. is This Dan with I’ll well. that add some start it and color let on Good Jeff. then Darren.

from a stage So Phase and planning and of stage. certainly a lot additional Two execution perspective, a from we’re carrying training headcount

and the in of about will still in brings, I benefits across talked once that’s for it’s One place that implemented All Yellow network. that all the place remain

that. are in way, time network. learned be So, from it movement the part to onto applying One, daily Phase the why the lessons The people the larger investment success that lessons of Two. that aren’t the learned we That’s and with associated the that -- utilizing Phase of learning benefit network, we that’s for lot freight exactly place smaller an of big with to part a a did of of ensure

cost. Phase wouldn’t Phase One to from I implementation the discussion extrapolate Two So, on the

can parts some cost Phase country traveling in that The areas. a the challenge. And of with traveling of we cetera, One country didn’t enough employees other where piece the were somewhat be where et the hiring One, those is Phase we not hired is to employees certain we part with have but had dock was utilizing with associated completely workers, in in which associated of portions until supplement drivers, up

anything Dan, I have might that include missed?

Dan Olivier

costs additional would an I equipment. support operational with would and just repositioning over Yes, say Darren of above be mentioned cost training the associated and some that

I think impacts QX. about the financial of

quarter. our it’s best million and for hard those I but $X bifurcate estimate $X to think, between is exactly costs, somewhere million the

Jeff Kauffman

just if you. Thank Okay. one follow-up can. I And

$XXX of this or Is through $XXX of quarter. mentioned million, end as that and million the You cash work at cash the as we there integration? balance to like through would work the a we you be environment liquidity minimum to above

Dan Olivier

Jeff, a but course, it’s -- there’s it’s better necessarily not more number, obviously say less. specific -- of I’d than

Jeff Kauffman

If was that, didn’t have or Yes, just to good, I okay, a you’re always we I something more is not about if point But go where just to worried your mind don’t floor guess like is it. do know beneath right? there we No, your we tweak want CapEx this. is that.

Dan Olivier

that Well, they’re I’d say able solid at a we cash perspective, broader pleased I single the of a to throughout just top the list quarter am maintain liquidity, were day, liquidity free first position. liquidity flow, our from and every priority

and but end in I in CDA $XX of QX also the to we the $XXX As the my January million. from at payment year, down the was that made out included of notes. the opening you That’s $XX that liquidity million million called mentioned comments, end related

That’s for more down result $X a efforts and flow So in excluding operating working QX focus time had that, our continuous the about we the direct than for sheet quarter. liquidity the five positive And capital. of by years. came our in on cash million and first balance

areas of to capital remain term. free perspective, in levels the exercise in in business, we continue a From the especially planning prudence around us our allows cash efforts, near which CapEx flexible all to flow

Darren Hawkins

entire of of road purchased volume would not tightly workforce the to Yes. just Darren. piece managing the add the needs transportation, the and the also I our that network, to this size as over well. continue the matching portion, would just but -- is the I just customers, And our we’ll and but

Jeff Kauffman

much you much. so very tough Thank congratulations Thanks and a in quarter. right. All

Darren Hawkins

Thank you, Jeff.

Operator

Stifel. our Please Bruce from comes your ahead Chan from next with go And questions. question

Bruce Chan

lot Just know, lot share for here. industry in a now. on, going few quick follow-ups the I a of or right happening now potentially right happening me shift there’s a

As you have of if view a customer you of integration, of a think so, changes the attrition? there maybe operations do seen towards business you about and some the back that have or the or winning And maybe given any to? change even is network path some network

Darren Hawkins

Bruce, this is Darren. question. Great

customers publicly LTL the One base that, over got for built years we’ve of typically relationships reported because with Yellow list large of of when all total of benefits you top of is the brands we’ve individual a each is at owned number at numbers look over the the that the of in period all customer been a those of large area and company, time. that at Yellow long loyal that because the

see, our daily website, company is visiting Now, you. not some that experience take just Yellow can location do number, is customer, one account pathway customer one with one a a on our to where their our from about the it’s service One it’s of of having those type driver they Certainly, customer to relationship their out of the the that executive, what that giving basis, things. share one customers frustration spend phone with business

Yellow. a side we do opportunity the So, of other on believe tremendous One there’s growth

down of number large certainly be had this we will fact capacity And will challenge protect of through there, that, to the the getting like there get continued of and downturn daily and that we shipments do to downturn’s customers responsiveness all long of the believe we to and not on we to the I last. loyalty on have of cycle continue how a in destocking also carriers to to that us customers we’re basis, the going once there the determinative see somewhat. bottom improve a have. While a wise majority the until the economy because that I give again this are being out during what They’ve

Bruce Chan

know of a ago. an question you injection I years one maybe And some got then here. equipments just new all last few

footprint the opportunity As you the is sort think and terminals to further an network fleet consolidation down and about integration bring process, rationalize you as pools? equipment age of there and

Darren Hawkins

system. just actually be oldest could certainly by do and the during things that And exciting up standpoint, been networks would create that following reduces can our of things own piece. away line capacity in one worth. that utilization that from along a as to go once asset eliminating not line, with the or haul most across downturn and terminals, density we we do the capacity, four where bottom free only property density removed we’re the One it’s Well, equipment terminal you’ve And that to It’s Not we whole redundancy. leasing separate could through buying, about know building the network line a one additional LTL, is that additional from improve position creating tractors. especially we back haul when from but what Yellow be creates can anything a tremendous and create But or pulling be applies have on miles equipment thing. you tractor, long trailer also as value that in we local CapEx that the

Operator

gentlemen, conference and call the like over concludes earnings back ladies Company our to this I’d turn And for to call. remarks. any the closing

Darren Hawkins

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

Operator

conference for today’s you now presentation. concluded. We The attending has thank

lines. disconnect may You your now

Yellow (YELLQ) 3 May 232023 Q1 Earnings call transcript