Schneider National Reports Rise in Second Quarter Results

Schneider National, Inc. (NYSE: SNDR), a leading transportation and logistics services company,  announced positive results for the quarter and six months ended June 30, 2018.

Key highlights are as follows:

•     Operating Revenues of $1.2 billion, an increase of 15% compared to second quarter 2017
•     Revenues (excluding fuel surcharge) of $1.1 billion, an increase of 12% compared to second quarter 2017
•     Net Income of $65.8 million, an increase of 42% compared to second quarter 2017
•     Diluted Earnings Per Share of $0.37, compared to second quarter 2017 of $0.27
•     Adjusted Diluted Earnings Per Share of $0.40, compared to second quarter 2017 of $0.23
•     Full year 2018 Adjusted Diluted Earnings Per Share updated guidance of $1.45 to $1.55

“Our portfolio of service offerings consisting of asset, asset-light, and non-asset businesses delivered strong financial results for a couple of key reasons,” noted Chris Lofgren, Chief Executive Officer of Schneider. “First, we provided our customers with a variety of valuable alternatives in a highly driver-constrained environment as evidenced by growth in our Intermodal and Logistics segments. Second, our Quest technology platform delivered enhanced margins through driver and asset productivity, in conjunction with yield management. Our Intermodal segment improved its operating ratio by over 750 basis points compared to the second quarter of 2017, and more than 250 basis points sequentially compared to the first quarter of 2018, due to the benefits of our 2017 chassis conversion, strong execution, market dynamics, and the complete integration of our Quest platform. We continue to work with our customers to ensure productivity in all aspects of their supply chains. The foreseeable limited supply of driver capacity puts productivity at a premium.”

Results of Operations – Enterprise

Enterprise operating revenues for the second quarter of 2018 were $1,236.3 million, resulting in growth of $161.1 million, or 15%, compared to the same quarter in 2017. Revenues (excluding fuel surcharge) for the second quarter of 2018 were $1,103.2 million, growth of $120.6 million, or 12%, compared to the same quarter in 2017. The primary driver of the Company’s revenue growth was a strong pricing and demand environment, driven by tight industry-wide capacity throughout the quarter.

Enterprise income from operations for the second quarter of 2018 was $91.7 million, an increase of $12.7 million, or 16%, compared to the same quarter in 2017, primarily driven by price, partially offset by higher driver capacity related costs. Adjusted income from operations for the second quarter of 2018 was $97.5 million, an increase of $29.8 million, or 44%, compared to the same quarter in 2017. In the second quarter of 2018, the Company recorded in its Other segment $5.8 million of expense related to a settlement of a lawsuit that challenged Washington state labor law compliance. This expense was removed to arrive at Enterprise adjusted income from operations.

Net income for the second quarter of 2018 was $65.8 million, or $0.37 on a weighted average diluted per share basis, an increase of $19.3 million, or 42%, compared to the same quarter in 2017. Adjusted net income for the second quarter of 2018 was $70.1 million, or $0.40 on a weighted average diluted per share basis, an increase of $30.4 million, or 77%, compared to the same quarter in 2017. The effective income tax rate was 25.5% in the second quarter of 2018, compared to 37.7% in the second quarter of 2017. The Company estimates its annual effective tax rate to be between 25.5% and 26.5%.

Results of Operations – Reportable Segments

Truckload

Revenues (excluding fuel surcharge): $568.7 million; growth of 5% compared to second quarter 2017
Income from operations: $62.3 million; an increase of 17% compared to second quarter 2017

Intermodal

Revenues (excluding fuel surcharge): $227.9 million; growth of 17% compared to second quarter 2017
Income from operations: $30.8 million; an increase of 175% compared to second quarter 2017

Logistics

Revenues (excluding fuel surcharge): $249.7 million; growth of 30% compared to second quarter 2017
Income from operations: $10.2 million; an increase of 57% compared to second quarter 2017

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