Schneider National delivered record revenues of $6.6 billion in 2022
Schneider National, Inc. Announces Fourth Quarter 2022 Results
Schneider National, Inc. (NYSE: SNDR, “Schneider” or the “Company”), a leading transportation and logistics services company, today announced results for the fourth quarter and year ended December 31, 2022.
“Our enterprise delivered record revenues of $6.6 billion and adjusted earnings of $617 million in 2022, illustrating the significant strategic progress of our multimodal portfolio since our IPO in 2017,” said Mark Rourke, Chief Executive Officer and President of Schneider. “I want to acknowledge the diligent efforts of our professional drivers and associates, who work hard and contribute to our success every day.”
“During the fourth quarter, we seamlessly transitioned our Western rail operations to the Union Pacific. This move further enables our plans to double our Intermodal offering by 2030 while providing our customers more lane options and more frequent departures,” Rourke commented.
“In 2023, the focus remains on our key growth initiatives in Dedicated, Intermodal, and Logistics, as well as steady investments in our digital platform Schneider FreightPower®,” said Rourke. “In addition, we will provide increased value for our customers, drivers, and carriers through improved fluidity across our freight and trailing asset networks.”
Results of Operations (unaudited)
The following table summarizes the Company’s results of operations for the periods indicated.
| Three Months EndedDecember 31, | Year EndedDecember 31, | |||||||||||||||||||
| (in millions, except ratios & per share amounts) | 2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||
| Operating revenues | $ | 1,561.7 | $ | 1,574.8 | (1)% | $ | 6,604.4 | $ | 5,608.7 | 18% | ||||||||||
| Revenues (excluding fuel surcharge) | 1,347.7 | 1,444.8 | (7)% | 5,741.9 | 5,163.9 | 11% | ||||||||||||||
| Income from operations | 143.3 | 178.0 | (19)% | 600.4 | 533.7 | 12% | ||||||||||||||
| Adjusted income from operations | 148.3 | 177.0 | (16)% | 617.0 | 532.7 | 16% | ||||||||||||||
| Operating ratio | 90.8 | % | 88.7 | % | (210) bps | 90.9 | % | 90.5 | % | (40) bps | ||||||||||
| Adjusted operating ratio | 89.0 | % | 87.7 | % | (130) bps | 89.3 | % | 89.7 | % | 40 bps | ||||||||||
| Net income | $ | 110.1 | $ | 134.1 | (18)% | $ | 457.8 | $ | 405.4 | 13% | ||||||||||
| Adjusted net income | 115.1 | 135.9 | (15)% | 471.5 | 407.2 | 16% | ||||||||||||||
| Diluted earnings per share | 0.62 | 0.75 | (17)% | 2.56 | 2.28 | 12% | ||||||||||||||
| Adjusted diluted earnings per share | 0.64 | 0.76 | (16)% | 2.64 | 2.29 | 15% | ||||||||||||||
| Weighted average diluted shares outstanding | 178.9 | 178.3 | 0.6 | 178.8 | 178.1 | 0.7 |
Enterprise Results
Enterprise fourth quarter 2022 income from operations was $143.3 million, a decrease of $34.7, or 19% compared to the prior year. It included a $5.0 million net loss attributed to costs associated with a management buyout of 100% of the Company’s China-based logistics operations, backed by certain members of the Company’s Tianjin management team, which closed in the quarter. Considering this item, adjusted income from operations for the fourth quarter of 2022 was $148.3 million, a decrease of $28.7 million, or 16%, compared to the prior year.
At December 31, 2022, the Company had a total of $215.1 million outstanding on various debt instruments compared to $270.3 million as of December 31, 2021. The Company had cash and cash equivalents of $385.7 million and $244.8 million as of December 31, 2022 and December 31, 2021, respectively. The Company’s effective tax rate was 21.5% in the fourth quarter, compared to 25.3% in the prior year, a reduction related to a change in our overall state income tax rates.
In October 2022, the Company’s Board of Directors declared an $0.08 dividend payable to shareholders of record as of December 9, 2022. This dividend was paid on January 10, 2023. On January 30, 2023, the Company’s Board of Directors declared a $0.09 dividend payable to shareholders of record as of March 10, 2023, expected to be paid on April 10, 2023. As of December 31, 2022, the Company had returned $55.7 million to shareholders year to date.
On January 31, 2023, its Board of Directors approved a share repurchase authorization of $150 million. The program is a complementary component of the Company’s capital allocation framework and will primarily serve to offset the dilutive effect of equity grants to employees over time.
Results of Operations – Reportable Segments
Truckload
- Dedicated trucks represent 57% of Truckload fleet
Truckload revenues (excluding fuel surcharge) for the fourth quarter of 2022 were $545.4 million, an increase of $21.8 million, or 4%, compared to the same quarter in 2021. The increase was due to dedicated growth, including both the MLS acquisition and nearly 500 units of organic dedicated new business, partially offset by lower miles per tractor related to moderating market demand and lower network price including less premium freight opportunities year over year. Truckload revenue per truck per week was $4,171, a decrease of 8% compared to the same quarter in 2021.
Truckload income from operations was$68.9 million in the fourth quarter of 2022, a decrease of $18.8 million, or 21%, compared to the same quarter in 2021. Earnings were impacted by the factors cited above, as well as higher driver and equipment-related costs. Truckload segment operating ratio was 87.4% in the fourth quarter of 2022, compared to 83.3% in the fourth quarter of 2021.
Intermodal
- Intermodal comprised 25% of segment revenues in the quarter
Intermodal revenues (excluding fuel surcharge) for the fourth quarter of 2022 were $315.5 million, a decrease of $2.1 million, or 1%, compared to the same quarter in 2021 primarily due to moderating market demand, partially offset by a 7% improvement in revenue per order.
Intermodal income from operations for the fourth quarter of 2022 was $52.8 million, a decrease of $1.8 million, or 3%, compared to the same quarter in 2021. The impact of favorable yield and network management was offset by higher equipment and dray driver costs. Intermodal operating ratio was 83.3% in the fourth quarter of 2022, a sequential improvement of 740 basis points from the third quarter of 2022.
Logistics
- Logistics comprised 33% of segment revenues in the quarter
Logistics revenues (excluding fuel surcharge) for the fourth quarter of 2022 were $425.0 million, a decrease of $122.5 million, or 22%, compared to the same quarter in 2021, primarily due to decreased revenue per order and 5% lower brokerage volume year over year.
Logistics income from operations for the fourth quarter of 2022 was $24.1 million, a decrease of $13.3 million, or 36%, compared to the same quarter in 2021 due to lower volumes and decreased net revenue per order. Logistics operating ratio was 94.3% in the fourth quarter of 2022, compared to 94.0% in the third quarter of 2022, and 93.2% in the same quarter the prior year.
Business Outlook
| (in millions, except per share data) | Current Guidance | |
| Adjusted diluted earnings per share | $2.15 – $2.35 | |
| Net capital expenditures | $525.0 – $575.0 |
“We anticipate that 2023 will finish stronger than it began and that freight demand will strengthen as the year progresses,” said Stephen Bruffett, Executive Vice President, Chief Financial Officer of Schneider. “Based on this and other market expectations, our guidance for full year 2023 adjusted diluted EPS is $2.15 – 2.35. Our net capital expenditures guidance for full year 2023 is approximately $525 – $575 million, with an expected full year effective tax rate of approximately 24.5%.”
“We look forward to demonstrating the resilience of our diverse portfolio through evolving market conditions, while advancing our strategic priorities of Dedicated, Intermodal, and Logistics, disciplined investment in our business, and shareholder value,” Bruffett commented.
Non-GAAP Financial Measures
The Company has presented certain non-GAAP financial measures, including revenues (excluding fuel surcharge), adjusted income from operations, adjusted operating ratio, adjusted net income, and adjusted diluted earnings per share. Management believes the use of non-GAAP measures assists investors in understanding the business, as further described below. The non-GAAP information provided is used by Company management and may not be comparable to similar measures disclosed by other companies. The non-GAAP measures used herein have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of results as reported under GAAP.
A reconciliation of net income per share to adjusted diluted earnings per share as projected for 2023 is not provided. Schneider does not forecast net income per share as the Company cannot, without unreasonable effort, estimate or predict with certainty various components of net income. The components of net income that cannot be predicted include expenses for items that do not relate to core operating performance, such as costs related to potential future acquisitions, as well as the related tax impact of these items. Further, in the future, other items with similar characteristics to those currently included in adjusted net income, that have a similar impact on the comparability of periods, and which are not known at this time may exist and impact adjusted net income.
Category: Featured, General Update, Management, News
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