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  • Investor Presentation Fourth Quarter 2018

    February 2019

  • Disclaimer and Forward-Looking Statements

    2

    Special Note Regarding Forward-Looking Statements

    This presentation, and certain information that management may discuss in connection with this presentation, contains forward- looking statements, within the meaning of the United States Private Securities Litigation Reform Act of 1995, which are intended to come within the safe harbor protection provided by such Act. These forward-looking statements reflect our current expectations, beliefs, plans, or forecasts with respect to, among other things, future events and financial performance and trends in our business and industry. Forward-looking statements are often characterized by words or phrases such as “may,” “will,” “could,” “should,” “would,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “prospects,” “potential” and “forecast,” and other words, terms, and phrases of similar meaning. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks, and uncertainties. Readers are cautioned that a forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement.

    Risks and uncertainties that could cause our actual results to differ materially from those contained in the forward-looking statements include, among others, those discussed in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission (SEC) as well as in other sections of the Form 10-K and in our subsequently filed Quarterly Reports on Form 10-Q and other filings with the SEC.

    Non-GAAP Financial Measures Reconciliation

    This presentation, and certain information that management may discuss in connection with this presentation, references certain non-GAAP financial measures, including revenues (excluding fuel surcharge), adjusted income from operations, adjusted net income, adjusted diluted earnings per share (EPS), adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), and Free Cash Flow. Reconciliations of the non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are in an appendix to this presentation. Management believes the use of these non-GAAP measures assists investors in understanding our business. The non-GAAP information provided is used by our management and may not be comparable to similar measures disclosed by other companies. The non-GAAP measures used herein have limitations as analytical tools, and you should not consider them in isolation, or as substitutes, for analysis of our results as reported under GAAP.

  • Leading North American Transportation Services Company

    3

    56% 20%

    4%

    19% 69%

    Iconic Orange Brand  A $5.0 billion Company founded in 1935 in Green

    Bay, WI

     Brand reputation of operational excellence built on service, trust, and reliability

     Industry-leading safety, culture and performance

     Comprehensive presence throughout North America

     Broad Portfolio of businesses with different asset intensities

     Only known industry peer of size to have completed a comprehensive IT platform transformation

     Strong balance sheet, with access to capital, provides flexibility to pursue organic and acquisitive growth initiatives

    Three Segments, all at scale – Truckload, Intermodal and Logistics

    ― Provides resiliency across market cycles ― Positioned for sustainable growth ― Utilize transformative Quest technology

    Truckload: ― For-hire and Dedicated configurations ― Second largest carrier in North America

    Intermodal: ― Owned container/chassis w/Company dray ― One of largest providers in North America

    Logistics: ― Freight brokerage & logistics services ― Fastest growing segment

    Notes: 1 Rank based on 2017 Revenue as reported in SEC filings, adjusted for the impact of a 2017 merger of two peers on an estimated pro forma basis

    1

    1

  •  Revenues (xFSC) growth of 10% YoY driven by strong price in all three segments and volume growth in Intermodal and Logistics.

     Intermodal and Logistics combined to contribute 48% of Enterprise adjusted income from operations.

     Truckload Revenue per truck per week improved 5% YoY driven by increased contract price. Income from operations increased 23% YoY. Operating ratio of 86.7%.

     Intermodal Revenue per order improved 13% YoY. Income from operations increased 44% due to strong price and volume, operational effectiveness, leveraging Quest, and owned chassis benefits. Operating ratio of 84.8%.

     Logistics Revenue growth of 14% YoY. Income from operations increased 27% YoY due to brokerage growth and effective net revenue management. Operating ratio of 94.1%.

    2

    4

    4Q18 – Broad and Diversified Portfolio of Services Delivers Record Operating Earnings

    Note: 1 See Appendix for non-GAAP reconciliations 2 Adjusted for $6.6 million of 2017 duplicate chassis costs

    Key Takeaways

    REVENUE REVENUE (xFSC)

    Operating Income (adj.)

    Net Income (adj.)

    EBITDA

    $916.29 $1,006.44

    $22.57

    $111.42$0.14

    Results (dollars in $M except EPS)

    Metric 1 4Q18 4Q17

    Operating Revenues $1,322 $1,191

    Revenues (xFSC) $1,185 $1,082

    Adj Income from Operations $121 $100

    Adj Net Income $87 $58

    Adj Diluted EPS $0.49 $0.33

    Adj EBITDA $195 $172

    Free Cash Flow $41 $43

    Net CapEx $116 $102

  •  Revenues (xFSC) growth of 11% YoY. Industry-wide driver constraints resulted in increased price in all three segments and volume growth in Intermodal and Logistics.

     Intermodal and Logistics combined contributed 46% of Enterprise adjusted income from operations, 31% in 2017.

     Truckload Revenue per truck per week improved 6% YoY. Income from operations increased 23% YoY. Operating ratio of 89.4%. Effective execution and sustainable pricing.

     Intermodal Revenue per order improved 11% YoY. Income from operations increased 94%. Operating ratio of 86.4%. Increased price and volume, container growth, operational effectiveness utilizing Quest platform, and owned chassis benefits.

     Logistics Revenue growth of 23% YoY. Income from operations increased 38%. Operating ratio of 95.4%. Brokerage volume growth and Quest revenue management capabilities.

    2

    5

    FY2018 – Portfolio Positioned to Delivered Record Returns

    Note: 1 See Appendix for non-GAAP reconciliations 2 Adjusted for $14.9 million of 2017 duplicate chassis cost

    Key Takeaways

    REVENUE REVENUE (xFSC)

    Operating Income (adj.)

    Net Income (adj.)

    EBITDA

    $916.29 $1,006.44

    $22.57

    $111.42$0.14

    Results (dollars in $M except EPS)

    Metric 1 FY2018 FY2017

    Operating Revenues $4,977 $4,384

    Revenues (xFSC) $4,454 $3,997.3

    Adj Income from Operations $384 $282

    Adj Net Income $275 $161

    Adj Diluted EPS $1.55 $0.94

    Adj EBITDA $675 $561

    Free Cash Flow $235 $109

    Net CapEx $332 $352

  • 38% 29%

    11% 10%

    51% 61%

    2011 2018

    Change in Customer Concentration 1

    Diversity of Customers and End-Markets Served Supports Stability and Growth Through Business Cycles

    6

    …that includes nearly 200 of the Fortune 500

    …with a broadening customer base…

    Retail 16%

    Food & Beverage 12%

    Home Improvement 8%

    Consumer Products 11%

    All Other 36%

    Auto 5% Transportation 6%

    2018 Revenues (xFSC) 1

    Diverse end-market footprint…

    #1 – #10 #11 – #20 All Others

    E-Commerce 6%

    2

    Notes: 1 Based on Enterprise Revenues (excluding fuel surcharge). See Appendix for non-GAAP reconciliation 2 “All Other” includes Apparel, Electronics, Paper, Chemical, Construction, Energy, Furniture, Medical, Metal, Plastics, and other miscellaneous industries

  • FOR HIRE DEDICATED

    Long-Haul Expedited

    Regional/Short-Haul

    FOR HIRE DEDICATED

    Long-Haul Chemical

    Regional/Short-Haul Energy

    Expedited

    Freeze Protection Reefer

    White Glove Threshold Expedited Large Parcel

    Specialty Van Multi-Stop

    Flatbed Cross-Dock

    E-COMMERCE/First-to-Final-Mile

    OTHER SPECIALTY

    STANDARD

    SPECIALTY

    BULK

    DRY VAN

    TEMPERATURE CONTROL

    7

    LOGISTICSINTERMODALTRUCKLOAD

    DOOR-TO-DOOR

    CONTAINER ON FLAT CAR (COFC)

    LONG-HAUL

    REGIONAL

    NORTH AMERICAN

    CROSS-BORDER

    NORTH AMERICAN CROSS-BORDER / INTERNATIONAL FREIGHT

    Temperature Control Full Truckload

    LTL Flatbed

    Intermodal Sole-Source

    Supply Chain Management Supplier Management

    Supply Chain Design Procurement

    Cross Border

    Warehousing Port Drayage

    Transloading

    BROKERAGE

    SUPPLY CHAIN SERVICES (3PL)

    IMPORT/EXPORT SERVICES

  • Fastest-Growing Segment

    $588 $639

    $737

    $834

    $1,025

    2014 2015 2

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