Yellow Corporation reports First Quarter 2021 results
Yellow Corporation has reported the results for the first quarter ended March 31, 2021. Operating revenue was $1.198 billion and operating loss was $27.6 million, which included a $1.0 million net loss on property disposals. In comparison, operating revenue in the first quarter of 2020 was $1.150 billion and operating income was $28.0 million, which included a $39.3 million net gain on property disposals.
Net loss for first quarter 2021 was $63.3 million, or $1.26 per share, compared to net income of $4.3 million, or $0.13 per share, in first-quarter 2020.
“The severe winter weather, including a generational storm in the southern United States, significantly impacted our first-quarter results,” said Darren Hawkins, Chief Executive Officer. “In February, roughly two-thirds of the 322 terminals in our network were either closed or had limited operations for some period. Our linehaul operations were also impacted by suspended service at various times. The recovery period to get the network fully back in cycle had a long tail that lasted into March and we estimate the unfavorable impact to operating income in the first quarter was approximately $16 million.
“With the impact of the winter weather behind us, LTL capacity remains tight driven by an improving economy and consumer optimism. We continue to see a strong yield environment.
“As previously indicated, we expect near-term headwinds from higher purchased transportation expense primarily attributable to the use of local cartage and over the road purchased transportation, both of which are more expensive in a tight capacity environment. We continue to expand our nationwide recruiting efforts including holding more than two dozen hiring events and increasing the number of driving academy locations to 17. We also took delivery of more than 1,100 tractors, 1,600 trailers, and 140 containers during the first quarter as part of our $450 million to $550 million capital expenditures plan in 2021. As we hire drivers and bring on additional revenue equipment, we expect to use less local cartage and over-the-road purchased transportation.
“We are in the process of executing the migration of our operating companies to One Yellow technology platform. We are also focused on optimizing the network to create One Yellow network and to expand and enhance service in the 1, 2, and 3-day lanes nationwide. The transformation to One Yellow remains on schedule to be completed in the middle of 2022.
“The passage of the American Rescue Plan Act of 2021 will strengthen eligible multiemployer pension plans that are currently severely underfunded and substantially mitigate their unfunded liabilities. The Act and the relief it provides will protect the hard-earned benefits of retirees from many companies and many industries including members of the Yellow team,” concluded Hawkins.
Financial Update
- On a non-GAAP basis, the Company generated an Adjusted EBITDA of $13.2 million in first-quarter 2021, compared to $34.1 million in the prior year comparable quarter (as detailed in the reconciliation below). The last twelve months Adjusted EBITDA as of March 31, 2021, was $171.0 million compared to $214.6 million as of March 31, 2020 (as detailed in the reconciliation below).
- In first-quarter 2021, the Company invested $202.4 million in capital expenditures. This compares to $12.4 million in capital expenditures and $0.7 million in capital value equivalent in new operating leases for a total of $13.1 million in first-quarter 2020.
Operational Update
- The operating ratio for first-quarter 2021 was 102.3 compared to 97.6 in first-quarter 2020.
- Excluding fuel surcharge, first quarter 2021 LTL revenue per hundredweight increased 6.9% and LTL revenue per shipment increased 5.6% compared to the same period in 2020. Including fuel surcharge, first-quarter LTL revenue per hundredweight increased 6.7% and LTL revenue per shipment increased 5.4%.
- First-quarter 2021 LTL tonnage per workday increased 0.5% when compared to first quarter 2020.
Liquidity Update
- The Company’s available liquidity, which is comprised of cash and cash equivalents and Managed Accessibility (as detailed in the supplemental information provided below) under its ABL facility, was $423.0 million as of March 31, 2021, compared to $118.0 million as of March 31, 2020, an increase of $305.0 million.
- The Company’s outstanding debt was $1.462 billion as of March 31, 2021, an increase of $582.1 million compared to $879.9 million as of March 31, 2020.
- For the three months ended March 31, 2021 cash used in operating activities was $38.8 million compared to $15.6 million in 2020.
Key Information – First quarter 2021 compared to first quarter 2020
| 2021 | 2020 | Percent Change(a) |
|||||||
| Workdays | 63.5 | 65.5 | |||||||
| Operating revenue (in millions) | $ | 1,198.4 | $ | 1,150.4 | 4.2 | % | |||
| Operating income (loss) (in millions) | $ | (27.6 | ) | $ | 28.0 | NM* | |||
| Operating ratio | 102.3 | 97.6 | (4.7) pp | ||||||
| LTL tonnage per workday (in thousands) | 39.02 | 38.85 | 0.5 | % | |||||
| LTL shipments per workday (in thousands) | 67.13 | 66.00 | 1.7 | % | |||||
| LTL picked up revenue per hundredweight incl FSC | $ | 22.00 | $ | 20.63 | 6.7 | % | |||
| LTL picked up revenue per hundredweight excl FSC | $ | 19.53 | $ | 18.27 | 6.9 | % | |||
| LTL picked up revenue per shipment incl FSC | $ | 256 | $ | 243 | 5.4 | % | |||
| LTL picked up revenue per shipment excl FSC | $ | 227 | $ | 215 | 5.6 | % | |||
| LTL weight/shipment (in pounds) | 1,163 | 1,177 | (1.2 | )% | |||||
| Total tonnage per workday (in thousands) | 50.64 | 49.37 | 2.6 | % | |||||
| Total shipments per workday (in thousands) | 68.98 | 67.57 | 2.1 | % | |||||
| Total picked up revenue per hundredweight incl FSC | $ | 18.60 | $ | 17.65 | 5.4 | % | |||
| Total picked up revenue per hundredweight excl FSC | $ | 16.56 | $ | 15.69 | 5.6 | % | |||
| Total picked up revenue per shipment incl FSC | $ | 273 | $ | 258 | 5.9 | % | |||
| Total picked up revenue per shipment excl FSC | $ | 243 | $ | 229 | 6.1 | % | |||
| Total weight/shipment (in pounds) | 1,468 | 1,461 | 0.5 | % | |||||
| (a) | Percent change based on unrounded figures and not the rounded figures presented | |
| * | Not meaningful |
Review of Financial Results
Yellow Corporation will host a conference call with the investment community today, Wednesday, May 5, 2021, beginning at 5:00 p.m. ET.
A live audio webcast of the conference call and presentation slides will be available on Yellow Corporation’s website www.myyellow.com. A replay of the webcast will also be available at www.myyellow.com
