Yellow Corporation

Good afternoon, everyone, and welcome to Yellow Corporation's first quarter 2023 earnings call. All participants will be in a listen-only mode. After today's presentation, there will be a question and answer session. Please note, this event is being recorded. At this time, I'd like to turn the conference call over to Tony Carino, Senior Vice President of Treasury and Investor Relations. Sir, please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to Yellow Corporation's first quarter 2023 earnings conference call. Joining us on the call today are Darren Hawkins, Chief Executive Officer, and Dan Olivier, Chief Financial Officer. During this call, we may make some forward-looking statements within the meaning of federal securities law. These forward-looking statements and all other 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 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. It's available on our website. I will now turn the call over to Darren.

Thanks, Tony, and good afternoon, everyone. Thank you for joining our calls. The Q1 results were in line with our expectations when considering the slowdown in the economy combined with the one yellow network transformation that we were undergoing. The number of daily shipments was consistent throughout the quarter without the typical early spring acceleration and demand that we are accustomed to seeing in March. In the near term, demand continues to be relatively flat due in part to ongoing destocking. Turning to pricing. In Q1, we improved year over year, despite following strong growth a year ago. We have been consistent with our strategy to improve yield on the freight moving through Yellow's network, and this is the 10th consecutive quarter where LTL revenue per hundredweight, excluding fuel, has increased on a year over year basis. Looking ahead, we plan to stick to our strategy, and our goal is to maintain the pricing gains made in recent years, which will be balanced with managing through the stagnant demand environment and fuel price headwinds. For the month of April, yellow averaged between a 1% and 2% increase on contract negotiations. In Q1, our results. were also impacted by elevated costs associated with the network transformation, including remaining expenses following the successful implementation of phase one last September and planning and preparation for phase two. Phase one included approximately 20% of our network in the western United States. The realigned and optimized terminal coverage positioned us closer to the customers, which has enabled us to enhance our service. Following the implementation of phase one, our customers have seen improvement across a broad range of areas that positively impact the customer experience, including an improvement in the percentage of shipments going out for delivery before 9 a.m., a reduction in missed pickups, and improvement in the percentage of shipments departing origin by 10 p.m. Our goal is to exceed customers' expectations with a red carpet experience And the improvements that we are seeing in phase one are examples of why moving to a super regional carrier is in the best interest of our customers, employees, and shareholders. Phase two consists of legacy wire sea freight, Holland, and New Penn terminals in the Midwest, Northeast, and Southeast, and covers approximately 70% of the network. We plan to communicate externally when an implementation date is determined. It's imperative that we complete our one yellow strategy, which will strengthen the company, protect 22,000 union jobs, and ensure that our customers are well cared for and receive the range of services that today's market demands. Phase one is a success, and as we look ahead, we plan to work with the IBT to determine the best path forward to implement Phase 2 and then turn our focus on refinancing the capital structure. Turning to purchase transportation expense, we continue to show improvement, primarily due to targeted efforts to reduce the use of over-the-road purchase transportation and to reduce equipment lease expense. In Q1, purchase transportation expense was down to 13.1%, of revenue, which is a 160 basis point improvement compared to a year ago and a 360 basis point improvement compared to two years ago. We recently announced the addition of David Weber to our board of directors. Mr. Weber is a law professor at Boston University and is a nationally recognized expert in pensions as well as shareholder activism and litigation. He was selected by the International Brotherhood of Teamsters to join the Board of Directors pursuant to its rights as the holder of Yellow's Series A Goading Preferred Stock. I am very pleased to welcome Mr. Weber to Yellow's Board of Directors, and the company will benefit tremendously from his insight. Thank you again for joining us today, and I will now turn the call over to Dan, who will share additional details about the quarter.