Good afternoon, everyone, 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 Carreño, 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 our 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 Adjusted 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 8-K along with the earnings release that's available on our website. I will now turn the call over to Darren. Thanks, Tony. Good afternoon, everyone. Thank you for joining our call. 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. 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. 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 I last September and planning and preparation for phase II. Phase I 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 I, 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 9:00 A.M., a reduction in missed pickups, an improvement in the percentage of shipments departing origin by 10:00 P.M. Our goal is to exceed customers' expectations with a red carpet experience and the improvements that we are seeing in phase I are examples of why moving to a super-regional carrier is in the best interest of our customers, employees, and shareholders. Phase II consists of Legacy YRC 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 I is a success, and as we look ahead, we plan to work with the IBT to determine the best path forward to implement phase II and then turn our focus on refinancing the capital structure. Turning to purchased transportation expense, we continue to show improvement, primarily due to targeted efforts to reduce the use of over-the-road purchased transportation and to reduce equipment lease expense. In Q1, purchased 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 Webber to our board of directors. Mr. Webber 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 Voting Preferred Stock. I am very pleased to welcome Mr. Webber 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. Thank you, Darren, good afternoon, everyone. For the first quarter of 2023, operating revenue was $1.16 billion compared to $1.26 billion in 2022, and operating loss was $9.3 million compared to operating income of $9.2 million in the prior year, including a $5.5 million net gain on property disposals. Adjusted EBITDA for the first quarter of 2023, $34.3 million compared to $52 million in 2022. Adjusted EBITDA for the last 12 months was $325.4 million compared to $341.4 million a year ago. The 8.1% decrease in year-over-year operating revenue in the first quarter was primarily attributable to lower volume and reduction in fuel surcharge revenue. Including fuel surcharge, first quarter LTL revenue per hundredweight was up 4.4%, and LTL revenue per shipment was up 6% compared to a year ago. Excluding fuel surcharge, LTL revenue per hundredweight was up 2.8%, and LTL revenue per shipment was up 4.4%. LTL tonnage per day in the first quarter was down 12%, driven by a 13.3% decrease in LTL shipments per day, partially offset by a 1.5% increase in LTL weight per shipment. Sequential LTL tonnage per day trends compared to the prior year were as follows: January, down 17.2%; February, up 1.3%; and March, down 16.9%. On a preliminary basis, April LTL tonnage per workday was down approximately 16% compared to last year. On a sequential basis from March to April, our LTL tonnage per day was up approximately 0.9%, which is slightly higher than our average historical trend of up 0.2%. Capital expenditures for the first quarter were $29.6 million compared to $36.4 million a year ago. Total liquidity at the end of the first quarter was $167.5 million compared to $276.9 million at the end of the first quarter of 2022. As a reminder, in early January, we paid the remaining $66 million due on the CDA note that matured at the end of 2022, consistent with the terms of the agreement. Total debt at the end of the first quarter of 2023 was $1.51 billion, compared to $1.61 billion at the end of the first quarter of 2022. Turning to hourly wages and mileage rates for our union employees. For 2023, our National Master Freight Agreement includes contractual wage increases of $0.40 per hour and $0.01 per mi on both April first and October first. In addition, the contract also includes a cost of living allowance clause, which provides for an additional increase effective April 1st each year based on the year-over-year change in the consumer price index published in January. Based on this year's measurement, our union employees qualify for a cost of living adjustment of $0.37 per hour and $0.00925 per mi, resulting in a total April 1st wage increase of $0.77 per hour and $0.01925 per mi, which is a wage increase of approximately 3%. For full year 2023, we expect our total union wage and benefits to increase between 4% and 5%. Since the inception of the current National Master Freight Agreement that became effective in 2019 through April 1st of 2023, we are extremely pleased that we have been able to increase the wages for our union employees by nearly $5 per hour and more than 20%. I will now turn the call back over to Darren for some closing comments. Thank you, Dan. The financial results on the path to completing one of the largest network changes ever implemented by a unionized LTL carrier are not linear. We expect the changes that we're making today will benefit customers, employees, and shareholders for many years to come. Throughout One Yellow, our goal has been to meet customers' needs, modernize our network, position Yellow for long-term success, and strengthen jobs. Thanks for your time this afternoon. We would now be happy to answer any questions that you may have. Ladies and gentlemen, we'll now begin the question and answer session. The first question today comes from Jack Atkins from Stephens. Please go ahead with your question. Great. Darren, Dan, thank you for the time. Really appreciate it. I guess if we could sort of dive into the One Yellow initiative. You know, I don't think I am letting the cat out of the bag that this is definitely dragging on longer than you would have anticipated in terms of trying to get, you know, phase II and phase III done. You know, can you update us on maybe a timeline for when you would expect to maybe start to be able to execute on phase II? What do you think the sort of the major sticking points are here? Good afternoon, Jack. This is Darren, great question to start with. You know, as I mentioned in the script, we continue to work with our union to determine the best path forward to implement phase II, then we'll certainly turn our focus on refinancing the capital structure. This, the proven success of phase I really sets the table for phase II. Phase II is much larger. It involves more local unions, it involves more employees, it involves more terminals. Certainly for the success that we've seen in phase I to continue with phase II, we need to bring all of our employees along with us, make sure they understand what the changes are, how it affects them, their bids, all of those items. We know what it does for the customer. You know, One Yellow is a growth strategy. We've seen the increase in the property and rolling stock asset utilization in the West. We can expand service offerings. We're creating density and reducing miles on a daily basis in the West. We've increased the productivity on our P&D side. Also just by rationalizing those physical locations, we've reduced the debt considerably from this time last year. You know, the benefits lead to us operating as one company, one network under one brand that puts a value proposition out there for our large and loyal customer base that they'll reward us with tonnage and job expansion. The Union's about creating jobs and creating membership, we'll work hand in hand. At the end of the day, I'm confident in this process because both sides are determined to get a deal done that works for everyone involved. The path to that, still is going to be determined, but the urgency around it and the interest in it, the communication lines are open, and we'll communicate that implementation date publicly, once it's determined. That's where we're at on those fronts, Jack. Okay. And I understand that you're limited in terms of sort of what you could say there, but I appreciate the color. Then, you know, in terms of the capital structure, you know, do you feel like you have to get One Yellow done before you can, you know, renegotiate the capital structure and the debt that comes due next year? Is that something that, you know, is that something that can, you know, what if this thing just keeps dragging out, I guess, Darren? I'll just ask you point blank. At what point do you need to pivot to the capital structure? I'll start with that and then let Dan jump in as well. We're picking up and delivering freight today just like we do every day. We're not as efficient as we can be without One Yellow. The marketplace, they pick winners and losers every day. Bottom line, we have to provide a value proposition that's equal to our national competitors in the LTL market, and One Yellow is certainly the way to do that. It's imperative that we complete our One Yellow strategy. It strengthens the company, it protects jobs, it ensures that our customers are well cared for, and that the range of services match the marketplace. Bottom line, we're in a very strong position from the collateral that we have in place, and I'll tee that up with Dan speaking to the capital structure. Yeah. Good afternoon, Jack. You know, just a reminder first off, we extended and upsized the ABL facility in the fourth quarter of last year. Then in January, as I mentioned, we paid off the remaining $66 million due on the CDA notes. We have turned our focus towards the term loan and the US Treasury loans, which mature respectively in June and in September of 2024. That said, with those maturities still being more than a year away, at this point in time, we continue to stay actively engaged in understanding what the best options will be to deal with those term loans and just to be in the best position possible to address them once we have clarity around the implementation date of phase II. Okay. Okay. Understood. Let me kind of move on to something else if I could. You know, you talked about April trends being, if I heard you right, Dan, I may be mistaken, but a little bit better than normal seasonality. Can you maybe talk about April first half of the month versus H2 of the month? Did you see an acceleration in trends? You know, that's encouraging that we're kind of performing along with seasonality. In terms of April, it's been steady first half, H2, pretty consistent throughout the month. You know, broader speaking from a tonnage perspective, you know, year-over-year, LTL tonnage per day, as I mentioned in Q1, was down 12%. That was slightly better than we expected. When I look at each month of the quarter, January and February were a little bit better than expected, but March was lower than expected, of course, as a result of not seeing the traditional seasonal lift that Darren mentioned. On a sequential basis from Q4 to Q1, LTL tonnage per day was up 1.2%. December to January was better than expected. January to February was right in line with what we expected. Then again, February to March was weaker than expected. Historically, we see about a 5% increase from February to March. This year, we were only up about one half of 1%. As I think about LTL tonnage per day for the second quarter, historically, we see about a 6% increase from Q1 to Q2. From month to month throughout the second quarter, we do expect to see the normal sequential changes. With March being weaker than expected and that being the jumping off point for Q2, I would expect that the second quarter in total would be below that historical 6% sequential increase. Okay. I guess, Dan, just kind of carrying that through, this is the last one for me, and I'll jump back in queue. I don't wanna hog all the questions, but, you know, I guess, how are you thinking about how that translates into operating ratio relative to normal seasonality? If revenue is below trend, tonnage below trend, I would imagine that's probably gonna mean OR is gonna be below trend. Can you walk us through your thoughts there? Yeah. Operating ratio for Q1 was 100.8, and that was pretty much in line, like Darren said, with what we expected. That did not include any significant one-time items. I would consider that a good jumping off point to use when thinking about the second quarter. Normally, sequentially going from Q1 to Q2, we see improvement of 300-400 basis points in operating ratio. I would expect some level of improvement from Q1 to Q2 this year, but taking into consideration that we didn't see the seasonal lift in tonnage during March and April, combined with the union wage increases that took effect on April 1st, and the fact that contractual renewals have moderated, to your point, I would expect the level of improvement to be less than that historical trend. So you would expect some improvement but less than the historical trend? That's correct. Okay. Well, guys, I'll hand it over to the next person in queue, but, thanks for taking my questions. Thank you, Jack. Our next question comes from Scott Group from Wolfe Research. Please go ahead with your question. Hey, guys. This is Erin on for Scott. thanks for taking our questions. I just wanted to start out. Just looking at one Q, you know, noticing tonnage, you know, increased sequentially, but yields were down sequentially. Like, how I know that you're focused on yields, but how are you kind of balancing this tonnage versus yield situation this week, environment? Just piggybacking off Jack, you had Ian mentioned that you will see some improvement in OR from one Q to two Q. Can we expect also some, like, revenue improvement as well? Like, how should we think about rev per hundredweight sequentially from one Q to two Q? Yeah. Good afternoon, Erin. This is Dan. Let me start, then I'll toss it to Darren for some further comments. You know, as Darren mentioned in his opening comments, in Q1, we saw a year-over-year improvement in yield, and we do expect to maintain the gains we've made over the past couple of years. You know, that said, the year-over-year percentage comparisons and the sequential gains in pricing have moderated just as we expected they would, especially in a weaker freight environment. That's evidenced by the recent contractual renewals, which on a year-to-date basis are averaging between 2%-3% compared to more than 10% a year ago. You know, those contractual renewals, they reflect the execution of the overall pricing strategy to get paid appropriately for the work we perform, as well as on a very selective basis, making strategic moves to either protect or to add profitable business to the network. This is Darren. I would just add, with the current limitation, in the union agreement on the over-the-road portion of purchased transportation, we'll certainly be leaning into pricing to protect our network, and that'll be the plan tech service, in Q2 as long as that limitation's in place. Got it. Thank you. Just if I can ask another one. I know that we talked about sequential margin improvement. How should we think about, like, EBITDA trends 1Q to 2Q? I know that you had sort of limited, one-time for, like, gains on sales this quarter. I'm just curious, like, where that trend is as well. I would just say from an EBITDA perspective, it's gonna follow the same trajectory as what the operating ratio, you know, changes would be. I think that's a good proxy for thinking about Adjusted EBITDA. Okay. Okay. I guess, like, all in, you know, with these, like, trends in mind sequentially, like, should we expect, you know, profitability at the operating line next quarter or this quarter? Apologies. I'm sorry, I missed that. What was that last part, Erin? just given all, like, what you've laid out, just the sequential trends and where you expect to land just versus seasonality, like, can we expect that you'll be profitable in, like, you know, an operating basis in 2Q? Yeah. Let me just touch on revenue for a little bit since that was part of your first question. I'll start with actually fuel surcharge revenue. Fuel prices for the first quarter were, you know, they were up 2.5% compared to last year. The prices were declining throughout the quarter and were down 18% year-over-year in March. Total fuel surcharge revenue in the first quarter, including the impact of the tonnage decline, was essentially flat or, you know, down 1%-2%. You know, sequentially from Q1 - Q2, fuel prices are expected to decline by about another 7%, whereas last year they went up by almost 30%. For the second quarter, we expect fuel surcharge revenue to be moderately lower than in the first quarter and significantly lower on a year-over-year basis. From a total revenue perspective, though, you know, even despite a moderate sequential decline in fuel surcharge revenue, even if we don't see the normal historical sequential increase in tonnage of 6%, I would expect total revenue could still be slightly higher in Q2 than it was in Q1. Got it. Okay. Thank you. Thanks for answering the questions. I'll hop back. Thanks. Thank you, Erin. Our next question comes from Jeff Kauffman from Vertical Research Partners. Please go ahead with your question. Thank you very much. Hey, everybody. Good afternoon. Well, I. Good afternoon. I think all the smart questions have been asked at this point. Let me try and come up with something a little less smart here. You did mention that there was a drag on your operating results from the final implementation of P1 and the planning stage for phase II. Could you elaborate on what you think either the OR would have been or how much of a drag you think you bore in the current quarter? With phase II being three times the size of phase I, but maybe we're a little bit smarter having gone through it. You know, what kind of drag might we see on operating results as you work through this? Good afternoon, Jeff. This is Darren. I'll start with that and then let Dan add some color on it as well. From a phase II perspective, we're certainly carrying a lot of additional headcount from a planning and execution stage and training stage. All that's still in place and will remain in place, per all the benefits that I talked about that One Yellow brings once it's implemented across the network. That's an investment with a lot of people that aren't associated with the daily movement of freight that we're utilizing to be in place to ensure the success of that. The lessons learned from phase I, big time benefit for phase II. That's exactly why we did it that way, a smaller part of the network, learning the lessons learned and applying them to the larger part of the network. I wouldn't extrapolate the discussion from phase I to phase II on the implementation cost. The other piece is part of the cost in phase I was utilizing traveling employees in certain portions of the country where we didn't have enough drivers, dock workers, et cetera, which is not completely associated with phase I, but somewhat associated with parts of the country where hiring can be a challenge. And we had to supplement that with some traveling employees until we were hired up in those areas. Dan, include anything that I might have missed. Yeah. I would just say an additional, you know, cost over and above the operational support and training that Darren mentioned would be, you have some costs associated with repositioning of equipment. I think about the financial impact to Q1, I think it's hard to exactly bifurcate those costs, but our best estimate is somewhere between, you know, $4 million and $6 million for the quarter. Okay. Thank you. Just one follow-up, if I can. You mentioned liquidity of $167 million, cash of $154 million to end the quarter. Is there a minimum cash balance that you would like to be at or above as we work through this environment and as we work through the integration? You know, Jeff, I'd say there's not necessarily a specific number, but- Mm-hmm ... more obviously is, of course, is better than less. Yeah, more is always good, right? No, I just didn't know if there was a floor where your mind is, okay, we just don't wanna go beneath this. If we have to tweak CapEx or something like that, we do it. I guess your point is you're not worried about that. Well, I'd say just from a broader liquidity perspective, you know, liquidity, free cash flow, they're at the top of our priority list every single day. Mm-hmm I am pleased that throughout the first quarter, we were able to maintain a solid liquidity position. As I mentioned in my opening comments, you know, and you called out that liquidity at the end of Q1 was $167 million. That's down $75 million from the end of the year, but that also included the $66 million payment we made in January related to the CDA notes. Mm-hmm ... you know, liquidity came down by about $9 million for the quarter, and we had positive operating cash flow in Q1 for the first time in more than five years. That's a direct result of our continuous efforts and focus on the balance sheet and our working capital. From a free cash flow perspective, we continue exercising prudence in our capital planning efforts, which allows us to remain flexible around CapEx levels in all areas of the business, especially in the near term. Yeah. This is Darren. I would just add that, we'll continue matching the size of our workforce to the volume and the network, to the needs of our customers, but also tightly managing purchased transportation, not just the over-the-road portion, but the entire piece as well. All right. Thanks so much. Congratulations in a tough quarter. Thank you very much. Thank you, Jeff. Our next question comes from Bruce Chan from Stifel. Please go ahead with your question. Hey, thanks, operator. Good afternoon, everyone. Just a few quick follow-ups for me here. I know, you know, right now in the industry, there's a lot going on, a lot of, you know, share shifts happening or potentially happening right now. As you know, think about the change of operations and the network integration, have you seen any customer attrition? If so, is there a path or a view towards, you know, maybe winning some of that business back or, you know, given some of the network changes, maybe, you know, do you even have to? Bruce, this is Darren. Great question. You know, one of the benefits at Yellow with all the brands that we've owned over a large number of years is the large and loyal customer base that we've got because of that. When you look at the publicly reported numbers of total customers, in the LTL area for each individual company, Yellow typically is at the top of that list because of all those relationships that have been built over a long period of time. It's not just about having the relationship with a customer, it's what share of their spend that customer is giving to you.f Certainly, One Yellow is our pathway to take some of the frustration out of the customer service experience that our customers see, where they can do business with one website, one PRO number, one account executive, one driver from our company visiting their location on a daily basis, those type things. We do believe there's a tremendous growth opportunity on the other side of One Yellow. While we're getting there. I like the responsiveness and the loyalty of the customers that we have. They've continued to give us a large number of shipments on a daily basis, and we will continue to protect that through this down cycle in the economy until we see destocking improve somewhat. Once we get to the bottom of that, I believe the majority of customers out there are certainly wise to the fact that there will be a capacity challenge again because of what all carriers have had to do during this downturn, and also not being determinative on how long the downturn's going to last. Okay, great. That's really helpful. Then maybe just one last question here. You know, I know you all got an injection of some new equipment a few years ago. You know, as you think about the integration and, you know, network consolidation process, is there an opportunity to bring the fleet age down further as you sort of, you know, rationalize terminals and footprint and equipment pools? Well, it's one of the most exciting things about One Yellow, is the asset utilization piece. You know, not only do we go away from four separate line haul networks where we can have one line haul network that creates density and reduces miles across the whole thing. As long as you've been following LTL, you know what that could be worth. It's tremendous value, along with creating that density in the local terminals. Also, we free equipment up, and that oldest equipment can certainly be removed from the system. Bottom line, when we're pulling back on CapEx during a downturn, and once things do improve, that we could be in a position to actually create our own capacity, not through buying, leasing, or building anything additional from a tractor, trailer or terminal property standpoint, that we would create that additional capacity just by eliminating the redundancy, and that especially applies to tractors. Okay, great. Thanks for that color. Ladies and gentlemen, this concludes our earnings call. I'd like to turn the conference call back over to the company for any closing remarks. Thank you, operator, and thanks again to everyone for joining us today. Please contact Tony with any additional questions that you may have. This concludes our call. Operator, I'm turning the call back to you. The conference has now concluded. We thank you for attending today's presentation. You may now disconnect your lines.