Here some speaking points for Jamie on Thursday:
25% of the public tonnage in the market
5 billion dollar company
400.000 customers
Average delivery time of the regionals 1-1 1/2 day
Very quick turns very high service
32.000 employees
Over 100 years of experience
Raised 250 million dollars in fresh equity in January-February 2014
Deleveraged the balance sheet
Because of the refinancing we will save 40-50 million dollars per year in interest
Increases our operating credibillity
We can operate in a much more investment type of business
Best agreement in LTL history ever
Much more simplified Capital structure
New term loan of 700 million
New ABL agreement that increases the flexibility in interest savings
Agreement with IBT extended till 2019, same date when the Term loan and the ABL agreement expire
IBT agreement preceded the financing agreement
Hard dollar savings on salaries
Increased ability to use purchased types of transportation
6% purchased transportation give us the flexibility in the network cycle
One absentees policy compared to 40-50 different policies increase the ability to enforce this policy which will save the company on overtime and on purchased transportation
4.2% higher revenue for Q1
Higher volume, higher tonnage and higher pricing in Q1
Q1 was bad because of weather (20 million dollar impact) and because of a slow down in productivity during the education in the agreement process in which actually we had a failed ratification vote at first but the company managed to pick that up and have it ratified. It all had a negative impact on the quarter.
Revenue increased per shipment
We come a long way, we are the largest public LTL freight company in the entire market with a much much more simplified capital structure with a new union contract going forward we will focus on three to four main areas:
1) 100% focus on North American LTL, we have taken out all the trash so we can focus on what we do best
2) We will improve employment engagement and moral
3) We will focus on operational execution and accountability
4) We will implement the new contract and reinvest in the company more than we have done in any number of years
For Q2 we are continuing to see growth in volume, IPA remains strong, ISN continues to be up, consumer sentiment is up,
We are so far behind in technology makes what we do today is they we are not jumping years but generations.
Specifically on the dimensioners, incredible piece of technology, plans are to roll out 58 of these, which we need only in our DC's where everything will pass through. Going to be great way for us to get paid for the right dimension and price it for the space it will take in the trailer. We are selling space at the end of the day. Pay back period for this equipment is expected to be 90 days or less. The dimensioners are just the tip of the iceberg. We now captioning data from specific customers, cones on top will be calculated in, this will give us a huge benefit over a long term basis. It will bring our revenue in balance with our costs.
Three more IT developments that driving value are: 12.000 handhelds rolled out a year ago, optimation of software, optimation of communication with our drivers, actively dispatch on the road shipment pickups, software to manage our workforce, 57% of the costs have to do with salaries!wages and benefits, any percentage point taken off will result in 50 million savings in value, with the workforce management tool we can do this by proactive management of the workforce by predictive technology.
Strong LTL environment both on the pricing as volume side. We are looking to open a couple or more DC's to improve our capacity and our services. We will expand as the market growth continues. I am excited for the first time in years to have the ability to reinvest. We will look opportunitely. It will take a couple of years to get a normal EBITDA. You don't turn a billions of dollar battleship around in one quarter. We will focus on the engagement of our employers in the improvement, in their moral and their culture. We need to communicate more with them, we know what we have to do there. We will focus secondarily on more productivity improvement the volume and the pricing will come, we need to be more predictive on what is coming.
There will be some margin pressure by operating leases of new trucks which we expect to compensated by a higher productivity. Flexibility of purchased transportation when we can't move the freight ourselves is completely new to the company and will be rammed up as necessary. It will save capital investment and help if the company has not the employees available to do the job. It allows us to reposition our empties. So it has a pretty profound impact.
For the workforce on salaries we are at par with the market, we have a much more richer programme with our healthcare than the market which gives us a competitive advantage to be able to recruit drivers.
There was a misperception in the market that we lost a lot of customers but we didn't loose them, they just moved the freight away, now that we through our reconstruction fase, it is much easier to get this freight back to us with a consistent service product which should be much easier.
