Yellow Corp (YELLQ)·Q1 2023 Earnings Summary

Executive Summary

• Q1 2023 saw soft demand and no typical seasonal uplift; operating revenue fell to $1.159B and the company posted an operating loss of $9.3M and a diluted EPS of -$1.06, with operating ratio deteriorating to 100.8% .
• Pricing remained resilient: LTL revenue per hundredweight rose 4.4% YoY (2.8% ex-fuel), partially offsetting volume declines; LTL tonnage per workday fell 12.0% YoY and shipments per workday fell 13.3% YoY, highlighting demand headwinds .
• Liquidity declined to $167.5M from $276.9M YoY, while outstanding debt fell to $1.509B from $1.607B YoY; cash from operations swung to +$12.6M from -$33.5M YoY .
• One Yellow network optimization: Phase One (western U.S.) completed and cited as successful; Phase Two (70% of network) planning underway with IBT to determine implementation; management emphasized completing the strategy and then pursuing capital structure refinancing .
• Wall Street consensus from S&P Global was unavailable for YELLQ for Q1 2023; estimate comparisons could not be performed due to missing CIQ mapping.

What Went Well and What Went Wrong

What Went Well

• Pricing strength: Including fuel surcharge, LTL revenue per hundredweight increased 4.4% YoY and revenue per shipment rose 6.0% YoY; ex-fuel increases were 2.8% and 4.4% respectively, demonstrating yield discipline despite softer volumes .
• Network optimization progress: “Phase One is a success” with earlier deliveries and fewer missed pickups; Phase Two planning underway toward transition to a super‑regional carrier, expected to improve asset utilization and efficiency .
• Cash generation and debt reduction: Cash from operations improved to $12.6M in Q1 from -$33.5M YoY; outstanding debt decreased to $1.509B from $1.607B YoY; CDA notes $66.0M fully repaid Jan 3, 2023 .

What Went Wrong

• Demand softness and lack of seasonal uplift: “Daily shipment count remained steady… without the typical seasonal uplift,” with LTL tonnage per workday down 12.0% and shipments per workday down 13.3% YoY .
• Profitability pressure: Q1 operating loss of $9.3M vs. operating income of $9.2M in Q1 2022; diluted EPS deteriorated to -$1.06 vs. -$0.54 in Q1 2022; Adjusted EBITDA fell to $34.3M from $52.0M YoY .
• Liquidity compressed: Available liquidity decreased to $167.5M from $276.9M a year ago, reflecting tighter availability under the ABL and lower cash balances .

Financial Results

Segment/Revenue Recognition

KPIs (LTL focus)

Liquidity and Capital Structure (Selected)

Guidance Changes

Note: No explicit revenue, margin, OpEx, OI&E, tax rate, or dividend guidance ranges were provided for Q1 2023.

Earnings Call Themes & Trends

Management Commentary

• “The soft demand environment during the first quarter was similar to the slowing pace we experienced late last year… daily shipment count remained steady… without the typical seasonal uplift… However, year-over-year pricing continued to improve” — CEO Darren Hawkins .
• “Our results for the quarter were impacted by some remaining costs associated with the execution of Phase One, and planning and preparation for Phase Two… It is imperative that we complete our One Yellow strategy… Phase One is a success… work with IBT to determine the best path forward… then turn our focus on refinancing the capital structure” — CEO Darren Hawkins .
• Q4 2022 context: “Demand for LTL capacity decreased… manufacturing strength began to waver… adjusted workforce… closely manage purchased transportation… yield environment remains stable… best operating income and operating ratio in 16 years” — CEO Darren Hawkins .

Q&A Highlights

• The company hosted its Q1 2023 earnings call at 4:30 p.m. ET on May 3, 2023; the full transcript was not available in our document set, so Q&A content cannot be summarized .

Estimates Context

• S&P Global/Capital IQ consensus estimates for Q1 2023 (EPS, revenue, EBITDA, estimate counts) were unavailable for YELLQ due to missing CIQ mapping; therefore, we cannot provide vs-consensus comparisons.
• Given the reported operating loss and volume declines alongside resilient pricing, any future estimate recalibrations would likely focus on volume trajectory and operating ratio improvements, but we explicitly refrain from directional speculation without consensus data .

Key Takeaways for Investors

• Pricing resilience amid demand softness: LTL revenue per hundredweight rose 4.4% YoY despite lower tonnage and shipments, indicating continued yield strength in the network .
• Volume headwinds drove profitability pressure: Operating loss of $9.3M and diluted EPS of -$1.06, with operating ratio at 100.8% vs. 99.3% a year ago and 96.6% in Q4 2022; monitor trajectory as Phase Two progresses .
• Liquidity compressed YoY to $167.5M; cash from operations positive at $12.6M; capex moderated to $29.6M, reflecting tighter financial posture .
• Deleveraging progress: Outstanding debt fell to $1.509B from $1.607B YoY; CDA notes fully repaid on Jan 3, supporting future refinancing efforts post-Phase Two implementation .
• Network optimization is the core operational catalyst: Phase One success (service improvements, fewer missed pickups); Phase Two scope covers 70% of network — watch for an implementation date update and associated cost/efficiency gains .
• Absent quantitative guidance and consensus estimates, near-term trading likely hinges on milestones toward Phase Two, volume stabilization, and evidence of operating ratio improvement back below 100% .
• Non-GAAP lens: Adjusted EBITDA fell to $34.3M from $52.0M YoY; understand reconciliation items and covenant framework when evaluating performance vs. GAAP .

Appendix: Non-GAAP Adjusted EBITDA Notes

• Adjusted EBITDA reflects EBITDA plus adjustments (e.g., letter of credit fees, equity-based compensation, property disposal gains/losses, restructuring, transaction costs), and is aligned to “Consolidated EBITDA” under TL Agreements; limits apply to certain adjustments at 10% of TTM Adjusted EBITDA .