Yellow Corporation

Good afternoon, everyone, and welcome to Yellow Corporation's third quarter 2021 earnings call. All participants will be in a listen-only mode. After today's presentation, there will be a question and answer session. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Tony Carino, Vice President of Investor Relations. Sir, please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to Yellow Corporation's third quarter 2021 earnings conference call. Joining us on the call today are Darren Hawkins, Chief Executive Officer, Dan Olivier, Chief Financial Officer, and Darrell Harris, President. During this call, we may make some forward-looking statements within the meaning of federal securities law. These forward-looking statements and all of the statements that might be made on this call, which are not historical facts, are subject to uncertainty and a number of risks. and therefore actual results may differ materially. The format of this call does not allow us to fully discuss all these risk factors. For a full discussion of the risk factors that could cause the results to differ, please refer to this afternoon's earnings release and our most recent SEC filings, including our forms 10-K and 10-Q. These items are also available on our website at myyellow.com. Additionally, please see today's release for a reconciliation of net income or loss to adjust the EBITDA. In conjunction with today's earnings release, we issued a presentation which may be referenced during the call. The presentation was filed in an AK along with the earnings release and is available on our website. I will now turn the call over to Darren.

Thanks, Tony, and good afternoon, everyone. Thank you for joining our call. Before I discuss Q3, I would like to recognize and thank our nearly 30,000 employees. Truckers are heroes and they continue to rise to the challenge and provide essential freight transportation services to the customers and communities we serve. Our employees are an essential piece of the U.S. supply chain and I am grateful for their efforts. Turning to Q3, we reported adjusted EBITDA of $94.4 million, a greater than 50% increase compared to a year ago. We are executing our yield strategy that is not only benefiting the company by improving the quality and profitability of the freight flowing through our more than 300 terminals, but it is also helping us manage through the industry-wide shortage of qualified drivers and dock workers in addition to purchase transportation headwinds. The strong pricing trends that we saw in Q2 gained momentum during Q3 and led to a year-over-year increase in LTL revenue per hundredweight, including fuel, of 20.7%. Favorable year-over-year pricing trends have carried into Q4. For the month of October, yellow averaged between 9 and 10% on contract negotiations. The freightback drop remained strong driven by continued consumer and business demand in addition to a limited ability to expand capacity across the supply chain. As we look ahead, demand for the valuable capacity and services we provide to the U.S. economy is poised to remain at an elevated level into 2022. Although our year-over-year LTL tonnage per day decreased in Q3, Let me be clear that our long-term strategy is to grow the business. This incredibly strong freight cycle is a tailwind as we expedite the culling of less profitable freight from the network and simultaneously execute the multi-year transformation to One Yellow. We remain on schedule to have all of our companies on a single operating system across the network, which is the technology linchpin for One Yellow. During Q3, Retaway was converted and is now operating on the One Yellow technology platform, joining YRC Freight and New Penn. We also expect to convert Holland around the end of this year. When completed, this will be the cornerstone of our fully integrated network, and it will allow us to continue streamlining our operations. Effective Tuesday of next week, we will rebrand Henry Logistics as yellow logistics to align with the journey to one yellow. The change is customer-focused and will allow them to ultimately work with one brand across all of our extensive core LTL resources, capabilities, and multi-mode logistics solutions. Through the end of Q3, we have acquired a majority of the equipment expected in our 2021 capital expenditures plans. We placed orders for much of the new equipment in 2020, which minimized significant delays in deliveries this year. During the first three quarters of 2021, we have acquired more than 2,100 tractors, 2,300 trailers, and 600 containers. Not only are these investments having a positive impact on the age of our fleet, but over time, we expect them to mitigate maintenance expense, and help our sustainability efforts through enhanced safety and improved fuel efficiency. I will now turn the call over to Dan, who will share additional details about the quarter.