Schneider National, Inc. Reports Fourth Quarter 2019 Results

Operating Revenues $1.2 billion

Schneider National, Inc. announced results for the fourth quarter and year ended December 31, 2019.

 “Collectively, we leveraged our portfolio and delivered solid results despite the muted seasonal peak of the fourth quarter,” stated Mark Rourke, Chief Executive Officer and President of Schneider. “Core Truckload generated an operating ratio of 89.1% driven by the performance of our Dedicated operations and effective cost management. Intermodal delivered a fourth quarter operating ratio of 87.7% and surpassed $1 billion in annual revenue for the first time in 2019. Logistics grew brokerage volumes which helped mitigate rate compression.”

“We took several actions during 2019 to refine our freight mix and the services we offer. In addition, we improved our cost profile, lowered our age of fleet and drove improvements through continued investments in technology,” Rourke continued. “We believe these actions position us well for 2020 and the opportunities that lie ahead.”

Results of Operations – Enterprise

Enterprise income from operations for the fourth quarter of 2019 was $78.1 million, a decrease of $40.5 million, or 34%, compared to the same quarter in 2018. Income from operations was impacted by an additional $13.3 million of shutdown costs for the First to Final Mile (FTFM) service offering, primarily related to equipment disposal valuations recorded in the Truckload segment. In addition, lower price and muted peak season volumes contributed to lower income compared to a year ago. Adjusted income from operations was $91.4 million, a decrease of $29.2 million, or 24%, compared to the same quarter in 2018.

Results of Operations – Reportable Segments

Truckload

Truckload revenues (excluding fuel surcharge) for the fourth quarter of 2019 were $494.5 million, a decrease of $85.6 million, or 15%, compared to the same quarter in 2018. Revenue per truck per week decreased $173, or 4%, compared to the fourth quarter of 2018. Excess industry capacity levels resulted in fewer peak season opportunities compared to the same quarter a year ago.

Truckload income from operations was$40.4 million in the fourth quarter 2019, a decrease of $34.5 million, or 46%, compared to the same quarter in 2018 primarily due to lower price, partially offset by the efforts to reduce costs and align our fleet. Fourth quarter 2019 included $13.3 million of FTFM shutdown costs while fourth quarter of 2018 included approximately $10 million of FTFM operating losses. Truckload segment operating ratio was 91.8% in the fourth quarter of 2019 compared to 87.1% in the fourth quarter 2018. Excluding all impacts of the FTFM service offering, core Truckload operating ratio was 89.1% in the fourth quarter of 2019 compared to 84.4% in the same quarter a year ago.

Intermodal

Intermodal revenues (excluding fuel surcharge) for the fourth quarter of 2019 were $261.2 million, a decrease of $6.7 million, or 3%, compared to the same quarter in 2018. Revenue per order decreased $81, or 4%, compared to the fourth quarter of 2018 primarily due to a change in mix related to seasonal project orders. Intermodal orders increased 1.5% compared to the fourth quarter of 2018.

Intermodal income from operations for the fourth quarter of 2019 was $32.2 million, a decrease of $7.5 million, or 19%, compared to the same quarter in 2018 primarily due to increased third-party costs, including rail. Intermodal operating ratio was 87.7% in the fourth quarter of 2019 compared to 85.2% in the same quarter a year ago.

Logistics

Logistics revenues (excluding fuel surcharge) for the fourth quarter of 2019 were $227.8 million, a decrease of $52.4 million, or 19%, compared to the same quarter in 2018. Brokerage volume increased 5%, which was moderated by lower rates and fewer premium revenue opportunities. Revenue also decreased due to a customer insourcing in the Company’s import/export business earlier in 2019.

Logistics income from operations for the fourth quarter of 2019 was $7.9 million, a decrease of $8.2 million, or 51%, compared to the same quarter in 2018 due primarily to net revenue compression, partially offset by cost management and benefits from continued investments in digital technology. Logistics operating ratio was 96.5% in the fourth quarter of 2019, compared to 94.3% in the fourth quarter of 2018.

Business Outlook

“We are optimistic about 2020 as we expect a supportive macroeconomic climate to lead to a more balanced marketplace, especially in the second half of the year as capacity levels rationalize,” noted Rourke. “We expect to generate growth by delivering truck-like reliability in our Intermodal offering, creative solutions in our Dedicated and specialty offerings, and deployment of new technology across our portfolio. We are committed to deliver value to our customers, returns for our shareholders and a quality experience for our professional drivers. Our full year 2020 guidance for adjusted diluted EPS is $1.25 to $1.35, and our net capital expenditures guidance is approximately $310 million.”

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