Yellow Corporation · OTC:YELLQ
Yellow — YRC Worldwide — Investor Presentation (May 2019)
40 slides from Yellow's investor presentation, May 20, 2019
Slide 1: Turning the corner: 2019 Investor presentation
Turning the corner 2019 Investor presentation Exhibit 99.1
Slide 2: Forward-looking statements disclaimer
The information in this presentation is summary in nature and may not contain all information that is important to you. The Recipient acknowledges and agrees that (i) no representation or warranty regarding the material contained in this presentation is made by YRC Worldwide Inc. (the “Company” or “
Slide 3: Today is a new day for YRC Worldwide
~31,000 Employees ~90+ Years of experience $5.1B Total Revenue ~380+ Terminals ~60,000 Available assets ~20M Shipments Transported Annually We are North America’s largest alliance of LTL regional and national networks, perfectly balanced with multi-mode freight brokerage solutions and easy-to-use te
Slide 4: Roadmap to profitability improvement
ROADMAP TO Profitability improvement LABOR CONTRACT RATIFICATION Five-year contract with a renewed commitment to employees and union workforce. Creates a foundation for operational excellence and revenue growth FIRST HALF 2019 NETWORK OPTIMIZATION Identifying opportunities to optimize our four LTL n
Slide 5: Focus areas for our next chapter
Focus areas for our next chapter SHAREHOLDER RETURN Revenue Growth CapEx Investment Margin Expansion Customer engagement & Growth Simplified Sales Structure Capture New Market Opportunities through HNRY Logistics Technology Terminal & network operations Network Optimization Operational Efficiencies
Slide 6: People & culture
People & culture Our focus on people and culture fuels our network Committed to safety of our employees and the motoring public Competitive wage package and opportunities for career progression provides the career path and stability to attract employees Engaged employees deliver top notch service to
Slide 7: Leveling the playing field for success
OPERATIONAL FLEXIBILITIES HEALTH BENEFITS VACATION RESTORATION BONUS PROGRAM RESTRUCTURE ECONOMIC PACKAGE 5-Year LABOR AGREEMENT expected to provide $60m to $80M of margin expansion in 2020 WAGES PURCHASED TRANSPORTATION DOCK & YARD FLEXIBILITIES BOX TRUCKS BENEFITS HELPS COMPANY RECRUIT AND RETAIN
Slide 8: People drive our business
MARKET-COMPETITIVE WAGE & BENEFITS PACKAGE Total of $4 per hour increase over the life of the contract Continuation of high-quality health care with lower fixed cost for the corporation New bonus structure CAREER PATH TO ATTRACT AND RETAIN EMPLOYEES Military veteran programs Tuition-free driving sch
Slide 9: Driven by safety
SAFETY FOCUS 200+ safety trainers – many peer-to-peer driver trainers Smith System training Deployment of executive safety & area safety councils Individual area safety plans with locally empowered safety committees Injury and accident avoidance focus Advanced collision avoidance technology Lane dep
Slide 10: Terminal & network operations
Terminal & network operations building a network to drive financial and customer growth Operational Efficiencies Network Optimization Equipment Leveraging new efficiencies to improve productivities, service & profitability Building a common enterprise platform to create asset & network efficiencies
Slide 11: Operational flexibilities create multiple benefits
Operational flexibilities create multiple benefits PURCHASED TRANSPORTATION Increased cap to 29% for YRC Freight and introduced to Holland with an 8% cap New flexibility to shift between road and rail carriers as needed Expansion of purchased transportation increases network capacity, expands growth
Slide 12: We've got North America covered
We’ve got north America covered Serving our customers coast-to-coast
Slide 13: Network optimization
Network optimization Build density reduce cost redundancies asset utilization Facilities identified for immediate cohabitation Estimated cash proceeds which provides additional liquidity YRC Freight Holland New Penn Reddaway 15 to 20 $20-25M This initial assessment barely scratches the surface for c
Slide 14: A near-term example of optimization
A near-term example of optimization NETWORK OPTIMIZATION 6 key focus areas: Network Design and Facilities Linehaul Planning Routing and Interchange City Operations Dock and Yard Operations Visibility and Status CONSOLIDATION SCENARIO TERMINAL B Company 2 TERMINAL A Company 1 TERMINAL C Company 2 TER
Slide 15: YRC Freight operates a modernized national network
YRC Freight operates a modernized national network Holland, New Penn and Reddaway operate direct loading and quick sort networks 380+ terminals 21,000 doors 14,000 tractors 45,000 trailers Reinvesting in the business by replenishing the fleet through a combined approach of purchasing and leasing, ne
Slide 16: Customer engagement & growth
Customer engagement & growth Grow revenue & yield by deepening relationships with customers through simplified engagement and diversification of services One Sales Team Create a single point of access to all YRCW services through a new sales structure to simplify engagement & create cross-sell oppor
Slide 17: Simplifying customer engagement
SIMPLIFYING Customer engagement Customer Pricing Claims Accounts Receivable Operations Customer Service Customer Pricing Claims Accounts Receivable Operations Customer Service Pricing Claims Accounts Receivable Operations Customer Service Pricing Claims Accounts Receivable Operations Customer Servic
Slide 18: Market potential beyond LTL
Market potential beyond ltl TOTAL MARKET POTENTIAL: $546 Billion TRUCKLOAD: $356 Billion LTL: $61 Billion REVERSE LOGISTICS & DISTRIBUTION: $38 Billion CONTRACT LOGISTICS: $40 Billion FINAL MILE: $15 Billion EXPEDITED: $36 Billion Source: American Trucking Association, Armstrong & Associates, manage
Slide 19: Serving customers beyond LTL: HNRY Logistics
Serving customers beyond Ltl HNRY Logistics HNRY Logistics is driving towards $175M to $200M of revenue in 2019 with growth to more than $300M in 2020 Longer term target: 20% of overall revenue TRUCKLOAD DIRECT – When you need a full truck, we’ve got one. Along with the power and flexibility of our
Slide 20: Improved experience enabled by technology
Improved experience enabled by technology One view of customer easier engagement new customer base TECHNOLOGY TO IMPROVE OUR NETWORK AND SERVICE Implementing tools for continuous improvement in safety, efficiency, and productivity In-Cab Safety Technology (in service) Dimensioners (95 in service) Pi
Slide 21: Financial structure
Financial structure Build long-term shareholder value through financial performance Revenue Growth CapEx Investment Capital Structure Balanced approach to growth through yield and volume Replenishing the fleet to reduce maintenance costs and lower the average fleet age Continue to de-lever the compa
Slide 22: Consolidated Financial Results
Consolidated Financial Results (a) Revenue growth from customer engagement, HNRY Logistics growth and network optimization
Slide 23: Reinvesting in the business
Reinvesting in the business Expected investment level of 6-7% of operating revenues in 2019 After nearly 10 years of under-investment, YRCW resumed equipment acquisition in 2013, ramping up in more earnest in 2015 2019 and beyond will reflect more balanced investment approach between YRC Freight and
Slide 24: Manageable capital structure
Since 2013, debt obligations reduced by $476.8 million and cash interest payments reduced by ~$40 million per year (a) Average effective interest rate as of March 31, 2019 Term Loan ABL Term A Capital Leases ABL Term B Contribution Deferral Agreement (CDA) Notes Series A Notes Series B Notes 6% Conv
Slide 25: Opportunity for operating ratio improvement
Opportunity for operating ratio improvement 3-year YRCW average Opportunity for operating ratio improvement fueled by the $60M to $80M in operational improvements from the new labor contract Achievement of consolidated operating ratio of 95 in 2-3 years would be YRCW’s best since 2006 GOAL 96.3 - 95
Slide 26: Investor relations
YRCW yrcw.com Bri Simoneau Vice President and Controller investor@yrcw.com Investor relations
Slide 27: Appendix
° YRC Worldwide APPENDIX
Slide 28: Experienced senior management
Experienced senior management 196 YEARS OF COMBINED INDUSTRY EXPERIENCE LEADING THE TRANSFORMATION OF YRCW Darren Hawkins Chief Executive Officer, YRCW Returned to the Company in 2013 and served as President of YRC Freight and Chief Operating Officer of YRCW prior to being appointed Chief Executive
Slide 29: YRC Freight
YRC Freight serves manufacturing, wholesale, retail and government customers throughout North America. When customers need longer-haul LTL shipping solutions, YRC Freight is the expert North America. Delivered. LTM 1Q19 Revenue $3.2 Billion LTM 1Q19 Adjusted EBITDA $194 Million # of Customers ~ 110,
Slide 30: Regional carriers: Reddaway, Holland and New Penn
For next-day and time-sensitive services, we have three distinct regional carriers: Reddaway, Holland and New Penn. All three brands are well established in their respective regions Regional expertise LTM 1Q19 Revenue $1.9 Billion LTM 1Q19 Adjusted EBITDA $127 Million # of Customers ~ 125,000 # of T
Slide 31: Multi-employer pension plans
Employees covered by collective bargaining agreements Required contractual contributions anticipated to be an average of $2.63 per hour in 2019 Rates under new labor agreement are equal to 2018 rates with no future rate increases 2019 cash contributions to be approximately $120 million Expense inclu
Slide 32: Single-employer pension plans
Certain employees not covered by collective bargaining agreements Plans closed to new participants effective January 1, 2004 with benefit accrual for active employees frozen effective July 1, 2008 Future funding requirements are primarily driven by movements in plan asset returns and discount rate L
Slide 33: Leverage ratio
Note: Funded debt balances based on par value Leverage ratio Continue to de-risk the balance sheet Funded Debt to Adjusted EBITDA ratio down 1.81 turns
Slide 34: Credit facility covenants
Credit facility covenants YRCW’s credit ratings as of March 31, 2019: Standard & Poor’s Corporate Family Rating was B- with Stable outlook Moody’s Investor Service Corporate Family Rating was B3 with Positive outlook 2.76x LTM as of 1Q 2019
Slide 35: Cash flow
Focused on improving cash flows while simultaneously increasing reinvestment into the Company Cash flow Free cash flow = operating cash flow less acquisitions of property and equipment, cash proceeds from disposals
Slide 36: Key Segment Information
Key Segment Information (a) Percent change based on unrounded figures and not the rounded figures presented
Slide 37: Updated 2018 LTL operating metrics
Updated 2018 ltl Operating metrics With the enhanced focus of service and product expansion and the launch of HNRY Logistics in late 2018, our increase in shipments over 10,000 pounds is growing, impacting the year-over-year revenue per hundredweight metrics that we have historically presented for Y
Slide 38: EBITDA reconciliation (consolidated)
Ebitda reconciliation (consolidated) (a) Certain reclassifications have been made to prior years to conform to current year presentation (b) As required under our Term Loan Agreement, Other, net, shown above consists of the impact of certain items to be included in Adjusted EBITDA ($ in millions)
Slide 39: EBITDA reconciliation (segment)
EBitda reconciliation (segment) (a) Certain reclassifications have been made to prior years to conform to current year presentation (b) As required under our Term Loan Agreement, Other, net, shown above consists of the impact of certain items to be included in Adjusted EBITDA ($ in millions)
Slide 40: Free cash flow reconciliation
($ in millions) Free cash flow reconciliation