Yellow Corporation · OTC:YELLQ
Yellow — YRC Worldwide — Investor Presentation (August 2017)
41 slides from Yellow's investor presentation, Aug 22, 2017
Slide 1: Investor Presentation August 2017
INVESTOR PRESENTATION August 2017 Exhibit 99.1
Slide 2: Forward-looking Statements and Disclaimers
Forward-looking Statements and Disclaimers 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 mad
Slide 3: There are freight companies and then there's YRCW
From the time we began traveling the roads more than 90 years ago, we have used a combination of extraordinary service, technology and good old fashioned hard work to evolve into the company we are today — one of the largest less-than-truckload (LTL) carriers in North America with ~32,000 employees,
Slide 4: Portfolio of four operating companies
YRCW provides services under a portfolio of four operating companies Collectively, we have approximately 20 - 25% of the public carrier market by tonnage. We provide the broadest coverage and more service capability throughout North America than any competitor. To put it simply, customers tell us wh
Slide 5: North American Coverage
North American Coverage 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 For next-day and time-sensitive services, we have three distinct regional carriers: Holland
Slide 6: The company you keep says a lot about you
The company you keep says a lot about you. And we work with some very good companies. We’re fortunate to have stable, long-standing relationships with some of the greatest companies in the world, from large Fortune 500 companies to small, privately-held businesses
Slide 7: Customer awards and recognition
Walmart 2016 LTL Carrier of the Year NASSTRAC 2016 LTL Carrier of the Year JB Hunt 2015 National LTL Carrier of the Year Inbound Logistics 2015 top 100 Trucker Unishippers 2015 LTL Carrier of the Year ScoopMonkey’s Top 100 Best Carriers Commercial Carrier Journal’s Top 250 Carriers Transport Topics
Slide 8: Highly Experienced Senior Management
Highly Experienced Senior Management With More Than 150 Years of Operating Experience James Welch Chief Executive Officer, YRCW Stephanie Fisher Chief Financial Officer, YRCW Jim Fry Vice President, General Counsel & Corporate Secretary, YRCW More than 37 years of industry experience and a 34-year v
Slide 9: Operating company presidents
Darren Hawkins President, YRC Freight Scott Ware President, Holland Don Foust President, New Penn TJ O’Connor President, Reddaway More than 25 years of industry experience Prior to being named President of YRC Freight, was Senior Vice President of Sales for the Company More than 31 years of industry
Slide 10: Simplified Capital Structure
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 Notes $1,361.3M $1,000.8M Pre-Refinancing - 12/31/13 As of 6/30/17 5% Convertible Notes 5% Convertible Notes Series B
Slide 11: Leverage Ratio
Leverage Ratio Growing into capital structure Continue to de-risk the balance sheet Note: Funded debt balances based on par value Funded Debt to Adjusted EBITDA ratio down 4.9 turns YRCW Adjusted EBITDA Millions Funded Debt / Adjusted EBITDA
Slide 12: Cash Flow
Cash Flow Focused on improving cash flows while simultaneously increasing reinvestment into the Company Millions Millions (a) Free cash flow = operating cash flow less acquisitions of property and equipment net of disposals
Slide 13: No Near-Term Maturities
No Near-Term Maturities Significant extension of debt maturities provides runway to continue operational transformation July Term Loan(a) March IBT (MOU) December CDA If the Company’s Contribution Deferral Agreement (CDA) notes are not extended to at least late October 2022, the term loan maturity w
Slide 14: Opportunity for EBITDA Margin Growth & Further Deleveraging
Opportunity for EBITDA Margin Growth & Further Deleveraging 8.8% 6.4% Note: The peer group’s LTM 2Q17 EBITDA includes ODFL, SAIA LTL, ABFS, FDXF and XPO LTL. Note: For comparison purposes, EBITDA for all companies is defined as operating income plus depreciation and amortization. EBITDA used to calc
Slide 15: Plan to Achieve Margin Segment Goals
Plan to Achieve Margin Segment Goals All Contribute to Achieving Goals Improving Productivity Dock supervisor tablets Utilizing Sysnet software to reduce linehaul miles Volume and Yield Growth Economic growth Continued market price rationalization Delivering Award Winning Service and Partnering with
Slide 16: Reinvesting in the Business
Reinvesting in the Business After several years of curtailing investment in the business, capital spending has resumed Fleet replenishment through operating leases beginning in 2013 Increased leasing activity due to greater financing options resulting from the Company’s improved financial condition
Slide 17: Reinvesting in the Business – Technology & Other CapEx
Reinvesting in the Business – Technology & Other CapEx 4x increase in technology investment from 2013 to 2016 Recent Technology & Other CapEx investments include Dimensioners(a) Mobileye and Lytx in-cab safety technology(a) Pickup and delivery handheld units Upgraded forklift technology PROS yield m
Slide 18: Financial and Operational Update
1 3 2 4 Financial and Operational Update 2Q 2017 Financial Results Operating revenue increased by more than 4% to $1.261 billion compared to 2Q 2016 Adjusted EBITDA of $91.1 million in line with $91.4 million reported a year ago Term Loan Extension Completed in July Term loan extended from February
Slide 19: Forward Looking Considerations
1 Plan to continue investing back into the business through combined purchasing and leasing to enhance shareholder value 3 No material long-term debt / facility maturities until 4Q19 2 International Brotherhood of Teamsters memorandum of understanding (MOU) in place through March 2019 Annual wage in
Slide 20: Competitive Strengths
YRCW’s competitive strengths provide a platform for continued improvement and long-term growth GENERATION-SKIPPING TECHNOLOGY PHYSICAL ASSETS NETWORKS PEOPLE Competitive Strengths
Slide 21: Competitive Strengths: People
Competitive Strengths ~32,000 highly experienced employees throughout North America Average tenure of union employees approximately 15 years Union employee turnover less than 10% Long-term relationships with more than 250,000 customers Experienced senior management with more than 150 years of operat
Slide 22: Competitive Strengths: People
Competitive Strengths Typical LTL driving distance contributes to stable workforce and low turnover YRCW drivers covered over 930 million miles in 2016 The equivalent of more than 166,000 round trips between New York and Los Angeles Active million mile drivers – accident-free 2,094 drivers > 1 milli
Slide 23: Competitive Strengths: Networks
Competitive Strengths NETWORKS Networks include 387 terminals YRC Freight, Holland, Reddaway and New Penn provide service to more than 250,000 customers in all 50 states, Puerto Rico, Canada and Mexico
Slide 24: Competitive Strengths: Physical Assets
Competitive Strengths YRC Freight operates a large hub and spoke network Regional carriers operate direct loading and quick sort networks YRCW Totals 387 terminals ~21,000 doors ~14,000 tractors ~45,000 trailers Reinvesting in the business by replenishing the fleet through a combined approach of pur
Slide 25: Competitive Strengths: Technology
Competitive Strengths Implementing tools for continuous improvement in safety, efficiency, and productivity In-Cab Safety Technology – in service 83 Dimensioners – in service Dock Supervisor Tablets – in service Quintiq Pickup and Delivery Route Optimization Software – full implementation expected i
Slide 26: Competitive Strengths: award-winning customer service
Competitive Strengths The result is award-winning customer service with a flexible supply chain that provides the broadest coverage throughout North America GENERATION-SKIPPING TECHNOLOGY PHYSICAL ASSETS NETWORKS PEOPLE
Slide 27: How we plan to move freight, our company and your investment forward
HOW WE PLAN TO MOVE FREIGHT, OUR COMPANY AND YOUR INVESTMENT FORWARD Strong Industry Position Diversified Business Model Experienced Leadership Team Simplified & Stable Capital Structure Well Positioned Once Capacity Tightens Reinvestment Back Into the Business North American Footprint / Tremendous
Slide 28: Investor Relations
Investor Relations NASDAQ: YRCW WEBSITE: www.yrcw.com COMPANY CONTACT: Tony Carreño Vice President – Investor Relations (913) 696-6108 tony.carreno@yrcw.com
Slide 29: Appendix
Appendix
Slide 30: Credit Facility Covenants
Credit Facility Covenants YRCW’s credit ratings as of June 30, 2017: Standard & Poor’s Corporate Family Rating of B- with Stable outlook Moody’s Investor Service Corporate Family Rating of B3 with Stable outlook (upgraded to Positive in July 2017) (a) As amended in July 2017 3.61x LTM as of 2Q 2017
Slide 31: Multi-Employer Pension Plans Contingent Liability
Multi-Employer Pension Plans Contingent Liability Employees covered by collective bargaining agreements Required contributions anticipated to be an average of $1.85(a) per hour in 2017 2017 cash contributions to be approximately $89 million(a) Expense included in EBITDA Not impacted by changes in in
Slide 32: Single-Employer Pension Plans
Single-Employer Pension Plans Certain employees not covered by collective bargaining agreements Plans closed to new participants effective January 1, 2004 with benefit accrual for active employees frozen effective July 1, 2008 Future funding requirements primarily driven by benefits paid, actuarial
Slide 33: Financial Results
Financial eet: Results = ia ,
Slide 34: Consolidated ($ in millions)
Consolidated ($ in millions)
Slide 35: Second Quarter 2017 Year-Over-Year Revenue Per Shipment and Revenue Per CWT
-0.1% Second Quarter 2017 Year-Over-Year Revenue Per Shipment and Revenue Per CWT +1.1% +1.9% +0.2%
Slide 36: Second Quarter 2017 Year-Over-Year Volume
Second Quarter 2017 Year-Over-Year Volume +3.9% +2.7% +3.6% +1.9%
Slide 37: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA ($ in millions) -0.3M -40bps
Slide 38: Segment Adjusted EBITDA
Segment Adjusted EBITDA ($ in millions) +4.4M -5.5M +30bps -150bps ($ in millions)
Slide 39: EBITDA Reconciliation - Consolidated
(a) As required under our Term Loan Agreement, other, net, shown above consists of the impact of certain items to be included in Adjusted EBITDA EBITDA Reconciliation - Consolidated ($ in millions) YRCW Consolidated FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 LTM 2Q 2016 LTM 2Q 2017 2Q 2016 2Q 2
Slide 40: EBITDA Reconciliation - Segment
(a) As required under our Term Loan, other nonoperating, net, shown above does not include the impact of non-cash foreign currency gains or losses EBITDA Reconciliation - Segment ($ in millions) YRC Freight Segment FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 LTM 2Q 2016 LTM 2Q 2017 2Q 2016 2Q 20
Slide 41: Free Cash Flow Reconciliation - Consolidated
Free Cash Flow Reconciliation - Consolidated ($ in millions) YRCW Consolidated FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 LTM 2Q 2016 LTM 2Q 2017 2Q 2016 2Q 2017 Net Cash (used) / provided in operating activities (26.0) $ (25.9) $ 12.1 $ 28.5 $ 140.8 $ 103.1 $ 157.2 $ 94.0 $ 58.7 $ 64.4 $ Acqui