Yellow Corporation · OTC:YELLQ
Yellow — YRC Worldwide — Investor Presentation (August 2016)
39 slides from Yellow's investor presentation, Aug 18, 2016
Slide 1: Investor Presentation August 2016
INVESTOR PRESENTATION August 2016 Exhibit 99.1
Slide 2: Forward-Looking Disclosures
FORWARD-LOOKING DISCLOSURES 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 Worldw
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 carriers in North America with ~32,000 employees, drivi
Slide 4: YRCW provides services under a portfolio of four operating companies
YRCW provides services under a portfolio of four operating companies Among these four companies, 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, custom
Slide 5: We've got every corner of North America covered
We’ve got every corner of North America covered (And the maps to prove it)
Slide 6: North American Coverage
North American Coverage In 2003, Yellow Transportation acquired Roadway Express. The two companies were integrated in 2009 and rebranded as YRC Freight in 2012. When customers need longer-haul LTL shipping solutions, YRC Freight is the expert For next-day and time-sensitive services, YRC regional ha
Slide 7: Service to more than 250,000 customers
YRC Freight, Holland, Reddaway and New Penn, provide service to more than 250,000 customers in all 50 states, Puerto Rico, Canada and Mexico. Plus, with extensive networks already in place and spanning North America, we are well-positioned to offer LTL services to an even greater number of future cu
Slide 8: 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 9: We delivered, and our customers noticed
We delivered, and our customers noticed 4 out of the last 6 years, YRCW operating companies have received awards from Walmart for outstanding service In 2015, Toyota named Holland and Reddaway their LTL logistics partners of the year New Penn and Holland received Quest of Quality awards in 2016 from
Slide 10: Highly Experienced Senior Management
Highly Experienced Senior Management With More Than 150 Years of Operating Experience James Welch Chief Executive Officer, YRCW Jamie Pierson Chief Financial Officer, YRCW Jim Fry Vice President, General Counsel & Corporate Secretary, YRCW More than 34 years of experience in the transportation and l
Slide 11: Highly Experienced Senior Management (operating company presidents)
Darren Hawkins President, YRC Freight Scott Ware President, Holland Don Foust President, New Penn TJ O’Connor President, Reddaway More than 27 years of industry experience Prior to being named President of YRC Freight, was Senior Vice President of Sales for the Company More than 27 years of industry
Slide 12: Simplified Capital Structure
Term Loan ABL Term A Capital Leases ABL Term B CDA Note Series A Notes Series B Notes 6% Convertible Senior Notes Capital Leases New Term Loan CDA Note $1,361.3M $1,060.8M Pre-Refinancing (12/31/13) Today (6/30/16) 5% Convertible Notes 5% Convertible Notes Series B Notes Series A Notes Post-Refinanc
Slide 13: Leverage Ratio and Adjusted EBITDA growth
Leverage Ratio Adjusted EBITDA CAGR 20.3% 2011 – 2015 Growing into capital structure Continue to de-risk the balance sheet Note: Funded debt balances based on par value Steady progress every year since 2011 Funded Debt to Adjusted EBITDA ratio down 5.2 turns
Slide 14: Credit Facility Covenants
Credit Facility Covenants YRCW’s credit ratings as of June 30, 2016: Standard & Poor’s corporate family rating is B- with a Stable outlook Moody’s corporate family rating is B3 with a Stable outlook 3.32x LTM as of 2Q16
Slide 15: No Near-Term Maturities
No Near-Term Maturities Significant extension of debt maturities provides longer runway to continue operational transformation February 2014 Refinancing February Term Loan, ABL March IBT (MOU) December CDA Focused on Operational Execution Runway (1) ABL amendment in June 2016 provides for an extensi
Slide 16: 2Q 2016 Financial and Operational Update
2Q 2016 Financial and Operational Update 1 4 5 3 6 Continued reinvesting in the business in Added new Accelerated service at YRC Freight Allows customers’ non-guaranteed shipments to reach their destinations 1 – 2 days faster than standard transit times 2 Executing strategy of prioritizing freight m
Slide 17: Opportunity for EBITDA Margin Growth & Further Deleveraging
Opportunity for EBITDA Margin Growth & Further Deleveraging Assuming current market performance of an OR of 91 to 93, the long-term EBITDA margin segment goals are as follows: YRCF = 7.6% (equivalent to an OR of 95 – 96) Regional = 10.5% (equivalent to an OR of 93 – 94) Significant opportunity for b
Slide 18: Plan to Achieve Margin Segment Goals
Plan to Achieve Margin Segment Goals Include 1 4 Volume and Yield Growth Economic Growth Continued market price rationalization 2 5 3 Focusing on Safety 6 In-cab safety equipment installation in existing fleet substantially complete SMITH system training, peer safety trainers and the expansion of dr
Slide 19: 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 20: Forward Looking Considerations
Forward Looking Considerations 1 Plan to continue investing back into the business through combined purchasing and leasing to enhance shareholder value 2 No material long-term debt / facility maturities until 1Q19 3 International Brotherhood of Teamsters memorandum of understanding (MOU) in place th
Slide 21: Competitive Strengths
Competitive Strengths YRCW’s competitive strengths provide a platform for continued improvement and long-term growth GENERATION-SKIPPING TECHNOLOGY PHYSICAL ASSETS NETWORKS PEOPLE
Slide 22: 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 150 combined years of operati
Slide 23: Competitive Strengths: People
Competitive Strengths Typical LTL driving distance contributes to stable workforce and low turnover YRCW drivers covered over 940 million miles in 2015 The equivalent of more than 168,000 round trips between New York and Los Angeles Active million mile drivers – accident-free through specific career
Slide 24: Competitive Strengths: Networks
Competitive Strengths NETWORKS Networks include 384 terminals
Slide 25: 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 384 terminals ~21,000 doors ~15,000 tractors ~45,000 trailers Reinvesting in the business by replenishing the fleet through a combined approach of pur
Slide 26: Competitive Strengths: Technology
Competitive Strengths Implementing tools for continuous improvement in safety, efficiency, and productivity In-Cab Safety Technology – installation completed in 2016 and in service Dimensioners – in service Dock Supervisor Tablets – in service Pickup and Delivery Route Optimization Software – implem
Slide 27: Competitive Strengths
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 28: How we will move freight, our company and your investment forward
HOW WE WILL MOVE FREIGHT, OUR COMPANY AND YOUR INVESTMENT FORWARD Strong Industry Position Diversified Business Model Experienced Leadership Team Simplified & Stable Capital Structure Turnaround Still Has Legs Via Margin Expansion Reinvestment Back Into the Business National Footprint / Tremendous A
Slide 29: Investor Relations
INVESTOR RELATIONS NASDAQ: YRCW www.yrcw.com COMPANY CONTACT: Tony Carreño Vice President – Investor Relations (913) 696-6108 tony.carreno@yrcw.com
Slide 30: YRC Freight
YRC FREIGHT 7 0
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 $1.75* per hour in 2016 2016 cash contributions to be approximately $90 million* Expense included in EBITDA Contributions are made to 32 mult
Slide 32: Single-Employer Pension Plans
Single-Employer Pension Plans Certain employees not covered by collective bargaining agreements Plans closed to new participants effective January 1, 2004 with benefit accrual for active employees frozen effective July 1, 2008 Future funding requirements primarily driven by benefits paid, actuarial
Slide 33: Key Financial Results
KEY FINANCIAL RESULTS
Slide 34: YOY Revenue Per Shipment and Revenue Per CWT
YOY Revenue Per Shipment and Revenue Per CWT +2.9% +0.5% +1.3% +1.4%
Slide 35: YOY Volume
YOY Volume -4.6% -6.0% -1.6% -2.4%
Slide 36: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA ($ in millions) -$18.0M -110bps -$7.4M +20bps
Slide 37: Segment Adjusted EBITDA
Segment Adjusted EBITDA ($ in millions) -$9.2M -$8.9M -90bps -170bps
Slide 38: EBITDA Reconciliation - Consolidated
(a) As required under our Term Loan Agreement, other, net, shown above consists of the impact of certain items to be included in Adjusted EBITDA EBITDA Reconciliation - Consolidated ($ in millions)
Slide 39: 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)