Yellow Corporation · OTC:YELLQ
Yellow — YRC Worldwide — Investor Presentation (November 2019)
39 slides from Yellow's investor presentation, Nov 13, 2019
Slide 1: Turning the corner
Turning the corner Investor presentation November 2019 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 Legacy $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 technolog
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 - Complete NETWORK OPTIMIZATION Identifying opportunities to optimize our
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: 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 8: 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 9: 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 10: 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 11: Network optimization
Network optimization Serving our customers coast-to-coast 12 facilities consolidated on track for ~25 in 2019 ~ 25 On track with ~$25M estimated cash proceeds which provides additional liquidity ~ $25M This initial ~25 consolidations completed in 2019 paves the way for the next ~25 to start in 2020
Slide 12: 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 13: 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 14: 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 15: Simplifying customer engagement
SIMPLIFYING Customer engagement Customer Customer PREVIOUS SALES STRUCTURE NEW SALES STRUCTURE Single point of contact One Sales Team
Slide 16: Market potential: LTL and beyond
Market potential LTL and Beyond TOTAL MARKET POTENTIAL: $600 Billion TRUCKLOAD: $395 Billion LTL: $64 Billion REVERSE LOGISTICS & DISTRIBUTION: $41 Billion 3PL/CONTRACT LOGISTICS: $86 Billion FINAL MILE FREIGHT: $9 Billion EXPEDITED FREIGHT: $5 Billion Source: American Trucking Association, Armstron
Slide 17: Serving customers beyond LTL: HNRY Logistics
Serving customers beyond Ltl HNRY Logistics HNRY Logistics is driving towards $150M of revenue in 2019 with the potential of $250M of revenue as early as 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
Slide 18: 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 19: 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 Continued attention to capital
Slide 20: Consolidated Financial Results
Consolidated Financial Results
Slide 21: Reinvesting in the business
Reinvesting in the business Expected investment level of approximately 6% 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 Through Q3 2019, 37% of the linehaul tractor fleet has been replenished si
Slide 22: Debt obligations reduced since 2013
Since 2013, debt obligations reduced by $455.0 million and cash interest payments reduced by ~$40 million per year Term Loan ABL Term A Capital Leases ABL Term B Contribution Deferral Agreement (CDA) Notes Series A Notes Series B Notes 6% Convertible Senior Notes Capital Leases New Term Loan CDA Not
Slide 23: Opportunity for operating ratio improvement
Opportunity for operating ratio improvement 2016 - 2018 YRCW average Opportunity for operating ratio improvement fueled by the expected $60M to $80M in operational improvements and network optimization Anticipated achievement of consolidated operating ratio of 95 in 2-3 years GOAL 96.3 - 95.9 $60M t
Slide 24: Investor relations
YRCW yrcw.com Eric Birge Vice President of Investor Relations investor@yrcw.com Investor relations
Slide 25: Appendix
° YRC Worldwide APPENDIX
Slide 26: Experienced senior management
Experienced senior management MORE THAN 175 YEARS OF COMBINED INDUSTRY EXPERIENCE LEADING THE TRANSFORMATION OF YRCW Darren Hawkins Chief Executive Officer Returned to the Company in 2013 and served as President of YRC Freight and Chief Operating Officer of YRCW prior to being appointed Chief Execut
Slide 27: 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 3Q19 Revenue $3.1 Billion LTM 3Q19 Adjusted EBITDA $160 Million # of Customers ~ 110,
Slide 28: Regional Transportation
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 3Q19 Revenue $1.8 Billion LTM 3Q19 Adjusted EBITDA $81 Million # of Customers ~ 125,000 # of Te
Slide 29: 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, which are comparable to rates in 2018 Expense included in EBITDA Not impacted by changes in interest rates Contributions are made to 32 multi-employer pens
Slide 30: 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 31: New Capital Structure
New Capital Structure Cash savings provides long-term operational runway YRCW’s credit ratings as of September 30, 2019: Standard & Poor’s Corporate Family Rating was B with Stable Outlook Moody’s Investor Service Corporate Family Rating was B2 with Stable Outlook New Term Loan Old Term Loan Facilit
Slide 32: Term Loan Covenant
Term Loan Covenant New Term Loan introduces a minimum LTM Adjusted EBITDA requirement of $200 million As defined under the new Term Loan, Adjusted EBITDA has been updated to reflect revised presentation
Slide 33: Cash flow and property sale proceeds
Targeting cash proceeds from the sale of properties of approximately $25 million Cash flow Free cash flow = operating cash flow less acquisitions of property and equipment, cash proceeds from disposals During Q4 2018, the Company recognized cash proceeds on the sale of a terminal of approximately $3
Slide 34: Key segment information
KEY SEGMENT INFORMATION (a) Percent change based on unrounded figures and not the rounded figures presented YRC Worldwide Inc. Instructions: Segment Statistics 1 Update linking as appropriate Quarterly Comparison 2 Review check totals at the bottom YRC Freight Regional Transportation 3Q19 3Q18 YoY %
Slide 35: Key segment information
KEY SEGMENT INFORMATION (a) Percent change based on unrounded figures and not the rounded figures presented With the launch of HNRY Logistics in late 2018, year-over-year revenue per hundredweight metrics that we have historically presented for YRC Freight, which includes the results of operations f
Slide 36: EBITDA reconciliation (consolidated)
($ in millions) Ebitda reconciliation (consolidated) The Adjusted EBITDA reconciliations presented herein (for both Consolidated and Segment Adjusted EBITDA) should be read in connection with the Company’s Current Report on Form 8-K and Quarterly Form 10-Q filed on October 31, 2019, including, but n
Slide 37: EBITDA reconciliation (segment)
($ in millions) EBitda reconciliation (segment) YRC Freight Segment 2014 2015 2016 2017 2018 3Q 2018 3Q 2019 LTM 3Q 2018 LTM 3Q 2019 Reconciliation of operating income to adjusted EBITDA Operating income (loss) $ 23.2 $ 63.3 $ 71.8 $ 60.7 $ 85.0 $ 24.7 $ 31.6 $ 58.7 $ 66.9 Depreciation and amortizat
Slide 38: EBITDA reconciliation (segment)
($ in millions) EBitda reconciliation (segment)
Slide 39: Free cash flow reconciliation
($ in millions) Free cash flow reconciliation
YRC Worldwide — Investor Presentation (November 2019) on 6ix