Ryder System, Inc.

Good morning and welcome to the Writer System First Quarter 2022 Earnings Release Conference Call. All lines are in a listen-only mode until after the presentation. Today's call is being recorded. If you have any objections, please disconnect at this time. I would now like to introduce Mr. Bob Brunn, Senior Vice President, Investor Relations and Corporate Strategy for Writer. Mr. Brunn, you may begin.

Thanks very much. Good morning, and welcome to RIDER's first quarter 2022 earnings conference call. I'd like to remind you that during this presentation, you'll hear some forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive, market, political, and regulatory factors. More detailed information about these factors and a reconciliation of each non-GAAP financial measure to the nearest GAAP measure is contained in this morning's earnings release, earnings call presentation, and in RIDER's filings with the Securities and Exchange Commission, which are available on RIDER's websites. Presenting on today's call are Robert Sanchez, Chairman and Chief Executive Officer, and John Diaz, Executive Vice President and Chief Financial Officer. Additionally, Tom Havens, President of Global Fleet Management Solutions, and Steve Sensing, President of Global Supply Chain Solutions and Dedicated Transportation, are on the call today and available for questions following the presentation. This time, I'll turn the call over to Robert.

Good morning, everyone, and thanks for joining us. I'm very pleased with our performance this quarter. and I'm excited to share the significant progress that we're making on our strategy to create long-term shareholder value through increased returns in fleet management and accelerating growth in our higher return supply chain and dedicated businesses. I'll begin the call by providing you with a strategic update. John will then take you through our first quarter results, which exceeded our expectations again this quarter. We'll then discuss our outlook. Let's start on slide four. I'm pleased to share that our two recent supply chain acquisitions, Whiplash and Midwest Warehouse and Distribution System, are both performing well and in line with expectations. These acquisitions support our strategy to accelerate growth in our asset-light supply chain business. Whiplash significantly grows our e-fulfillment network with scalable e-commerce and omni-channel fulfillment solutions, and Midwest expands our multi-client warehousing offerings. We expect both acquisitions to be accretive to 2022 earnings. Sales activity across all segments remains strong, following record new contract wins in supply chain and dedicated in 2021, and again in the first quarter of this year. Challenges impacting labor, supply chains, and truck production continue to provide us with additional growth opportunities because they focus companies' leadership on the importance of transportation and supply chains and drive companies to make long-term outsourcing decisions. FMS is also benefiting as companies look to source truck capacity in this extremely tight market. We generated record ROE of 25% for the trailing 12-month period, reflecting strong demand in pricing in our used vehicle sales and rental. as well as benefits from our multi-year lease pricing and maintenance cost savings initiatives. ROE also improved from a declining depreciation expense from prior residual value estimate changes. We increased our full year 2022 ROE forecast to 23 to 25% from our prior forecast of 20 to 22%, reflecting the strong market environment in FMS. We're on track to return to our high single digit target in EBT as a percent of operating revenue in supply chain and dedicated in the second half of the year, reflecting pricing adjustments to recover higher labor costs as well as growth. We're executing our previously announced 300 million accelerated share repurchase program, which we expect to complete no later than October. Our balance sheet remains strong and provides capacity for additional acquisitions and share repurchase activity. We increased our full year 2022 free cash flow forecast to 550 to 650 million, primarily to reflect 300 million in expected proceeds from UK asset sales related to our previously announced exit from our UK FMS business. Slide five provides an overview of the investments we're making to drive accelerated growth in supply chain and dedicated, a key element of our strategy to generate higher returns. Developing new and enhanced capabilities in e-commerce fulfillment, last mile delivery, and freight brokerage provides opportunities to leverage profitable growth areas in the market and cross-sell services. Innovative technology enables us to deliver value-added logistics solutions that are in high demand. In previous quarters, I highlighted our Rider Last Mile and Rider Share offerings. This quarter, I'll discuss our e-commerce fulfillment offering, which was significantly enhanced by our recent acquisition of Whiplash. Sales and marketing are a key to our brand awareness and ensuring customers are aware of the full array of supply chain capabilities. Our Ever Better campaign and increased digital marketing presence have driven a significant increase in qualified sales leads. We're also expanding our sales force and investing in their capabilities to drive additional growth opportunities. We expect to continue pursuing M&A opportunities with a focus on adding new capabilities, geographies, and or industry verticals. These opportunities are an important way to accelerate growth, especially in supply chain and dedicated, and we have a strong track record of success in this area. Rider Ventures, our corporate venture capital fund, aims to invest $50 million over five years through direct investment in startups. Our investments here advance strategic relationships to support development of new products that benefit our customers and solidify our position as an industry leader. We've made investments in numerous exciting areas, such as autonomous vehicle technology, e-commerce micro-fulfillment, and digital driver staffing. and are working with these startups to address important customer needs. Slide six provides a closer look at Rider's e-commerce fulfillment offering, recently branded Rider e-commerce by Whiplash. Through this offering, we have combined the best-in-class e-commerce fulfillment platform with industry-leading logistics expertise to bring significant value to our customers. The combined solutions portfolio provides seamless, direct-to-consumer retail and warehouse fulfillment nationwide with the ability to deliver to 100% of the U.S. population within two days and 60% within one day. Our proven technology platform facilitates customer onboarding and easily integrates with customer e-commerce sales platforms. Additional customer benefits include streamlined orders and inventory management, as well as optimized carrier selection. The platform also has the flexibility to scale to meet the needs of small to medium-sized businesses, as well as large enterprise brands. The ability to seamlessly scale with growth addresses a key pain point of emerging brands looking for a partner who can support them over time. Utilizing robotics and automation enhancements drives increased productivity, lower costs, improves safety and retention, and enables seamless scaling within the same footprint. We're excited about the value Rider e-commerce by Whiplash brings to the market, and we expect this offering will be a key contributor to accelerated growth in supply chain. I'll turn the call over to John now to cover the first quarter results.