Schneider National, Inc. Announces First Quarter 2021 Results

• Operating Revenues $1.2 billion; $1.1 billion in 2020
• Income from Operations $76.2 million; $54.9 million in 2020
• Diluted Earnings Per Share $0.31; $0.25 in 2020
• Adjusted Diluted Earnings Per Share $0.31; $0.24 in 2020

GREEN BAY, Wis.–(BUSINESS WIRE)–Schneider National, Inc. (NYSE: SNDR, “Schneider” or the “Company”), a leading transportation and logistics services company, today announced results for the three months ended March 31, 2021.

“Our first quarter results affirm our strategy of a scaled, multi-modal portfolio providing enterprise solutions for our customers,” said Mark Rourke, Chief Executive Officer and President of Schneider. “Weather conditions in the quarter disrupted operations and impacted results in all our segments above that of an average year. In our Truckload segment, effective yield management and dedicated new business offset the impact of challenged driver capacity conditions and severe weather. Our Intermodal segment grew earnings 23% year over year, as favorable growth in our Eastern operations outweighed a series of disruptions in the network. Our Logistics segment achieved record first quarter revenue and earnings, aided by our broad qualified carrier network and expanded leverage of the Schneider FreightPower® platform.”

Rourke continued, “Despite the restricted driver capacity and lack of intermodal fluidity, we delivered the most profitable first quarter in our history, and our 2021 objectives to drive growth, enhance margins, and deliver shareholder value remain intact.”

Results of Operations (unaudited)

The following table summarizes the Company’s results of operations for the periods indicated.

Results of Operations – Reportable Segments

Truckload

Truckload revenues (excluding fuel surcharge) for the first quarter of 2021 were $451.7 million, a decrease of $17.7 million, or 4%, compared to the same quarter in 2020, primarily due to lower network capacity levels and weather conditions, partially offset by favorable yield and dedicated growth. In addition, Truckload network revenue per truck per week was $3,859, an increase of $264, or 7%, compared to the first quarter of 2020.

Truckload income from operations was $38.3 million in the first quarter of 2021, an increase of $1.7 million, or 5%, compared to the same quarter in 2020. Constructive yield management actions taken in the quarter, including contract renewals and spot market opportunities, and favorable equipment and safety costs more than offset the earnings impact of reduced capacity and increased driver costs. Truckload segment operating ratio was 91.5% in the first quarter of 2021, compared to 92.2% in the first quarter of 2020.

Intermodal

Intermodal revenues (excluding fuel surcharge) for the first quarter of 2021 were $255.8 million, an increase of $17.8 million, or 7%, compared to the same quarter in 2020. Intermodal orders grew 2%, and revenue per order increased 6% compared to the first quarter of 2020. Further leverage and market differentiation of the Company’s Eastern rail operations more than offset the impact of Western service issues and weather in the quarter.

Intermodal income from operations for the first quarter of 2021 was $20.0 million, an increase of $3.7 million, or 23%, compared to the same quarter in 2020. Yield management actions and Eastern network growth led to the year over year increase in earnings, more than offsetting weather disruptions. Intermodal operating ratio was 92.2% in the first quarter of 2021, compared to 93.2% in the first quarter of 2020.

Logistics

Logistics revenues (excluding fuel surcharge) for the first quarter of 2021 were $355.9 million, an increase of $116.3 million, or 49%, compared to the same quarter in 2020. Following record fourth quarter 2020 revenues, increased revenue per order and continued brokerage volume growth resulted in record first quarter revenues in 2021.

Logistics income from operations for the first quarter of 2021 was $15.9 million, an increase of $11.7 million, or 279%, compared to the same quarter in 2020, primarily due to increased net revenue per order and volume growth compared to the first quarter of 2020. Logistics operating ratio was 95.5% in the first quarter of 2021, compared to 98.2% in the first quarter of 2020.

Business Outlook

“We anticipate strong demand, improved intermodal network fluidity, and constrained driver capacity throughout 2021,” Rourke commented. “Based on these anticipated market conditions, our updated full year adjusted diluted earnings per share guidance is $1.60 – $1.70, up from our original guidance of $1.45 – $1.60. Our full year guidance for net capital expenditures is updated to a range of $375 million to $425 million subject to potential OEM supply chain issues.”

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 2021 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.

About Schneider National, Inc.

We are one of the largest providers of surface transportation and logistics solutions in North America. Schneider National, Inc. is a publicly held holding company that, together with our wholly owned subsidiaries, provides safe, reliable, and innovative truckload, intermodal, and logistics services to a diverse group of customers throughout the continental United States, Canada, and Mexico. Unless otherwise indicated by the context, “we,” “us,” “our,” “ours,” the “Company,” and “Schneider” refer to Schneider National, Inc. and its consolidated subsidiaries. We were founded in 1935 and have been a publicly held company since our initial public offering in 2017. Our stock is publicly traded on the NYSE under the ticker symbol SNDR and is included in the Russell 1000 Index. Schneider possesses an array of capabilities and resources that leverage artificial intelligence, data science, and analytics to provide innovative solutions that coordinate the movement of products timely, safely, and effectively, thus adding value to our customers’ supply chains.

Our diversified portfolio of complementary service offerings combines truckload services with intermodal and logistics offerings, enabling us to serve our customers’ varied needs. Our service offerings include transportation of full-truckload freight, which we directly transport utilizing either our company-controlled revenue equipment and company drivers or owner-operators under contract with us. We have arrangements with most of the major North American rail carriers to transport freight in containers. We also provide customized freight movement, revenue equipment, labor, systems, and delivery services tailored to meet individual customer requirements and typically involve long-term contracts. These arrangements are generally referred to as dedicated services and may include multiple pickups and drops, local deliveries, freight handling, specialized equipment, and freight network design. We also provide comprehensive logistics services with a network of thousands of reliable third-party carriers, and through a China-based subsidiary, we offer limited transportation and logistics services in China which consist primarily of brokerage services.

Special Note Regarding Forward-Looking Statements

This earnings release contains forward-looking statements, within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company’s current expectations, beliefs, plans, or forecasts with respect to, among other things, future events and financial performance and trends in the business and industry. The words “may,” “will,” “could,” “should,” “would,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “prospects,” “potential,” “budget,” “forecast,” “continue,” “predict,” “seek,” “objective,” “goal,” “guidance,” “outlook,” “effort,” “target,” and similar words, expressions, terms, and phrases among others, generally identify forward-looking statements, which speak only as of the date the statements were made. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks, and uncertainties. Readers are cautioned that a forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement.

The statements in this news release are based on currently available information and the current expectations, forecasts, and assumptions of the Company’s management concerning risks and uncertainties that could cause actual outcomes or results to differ materially from those outcomes or results that are projected, anticipated, or implied in these statements. Such risks and uncertainties include, among others, those discussed in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K filed on February 19, 2021, subsequent Reports on Form 10-Q and 8-K and our other filings we make with the U.S. Securities and Exchange Commission. In addition to any such risks, uncertainties, and other factors discussed elsewhere herein, risks, uncertainties, and other factors that could cause or contribute to actual results differing materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following:

• Our ability to successfully manage the demand, supply, and operational challenges and disruptions (including the impact of reduced freight volumes) associated with the ongoing COVID-19 pandemic and the associated responses of federal, state, and local governments and businesses;
• Economic and business risks inherent in the truckload and transportation industry, including competitive pressures pertaining to pricing, capacity, and service;
• Our ability to effectively manage tight truck capacity brought about by driver shortages and successfully execute our yield management strategies;
• Our ability to maintain key customer and supply arrangements (including Dedicated arrangements) and to manage disruption of our business due to factors outside of our control, such as natural disasters, acts of war or terrorism, disease outbreaks, or pandemics;
• Our ability to manage and implement effectively our growth and diversification strategies and cost saving initiatives;
• Our dependence on our reputation and the Schneider brand and the potential for adverse publicity, damage to our reputation, and the loss of brand equity;
• Risks related to demand for our service offerings;
• Risks associated with the loss of a significant customer or customers;
• Capital investments that fail to match customer demand or for which we cannot obtain adequate funding;
• Fluctuations in the price or availability of fuel, the volume and terms of diesel fuel purchase commitments, and our ability to recover fuel costs through our fuel surcharge programs;
• Our ability to attract and retain qualified drivers and owner-operators;
• Our reliance on owner-operators to provide a portion of our truck fleet;
• Our dependence on railroads in the operation of our intermodal business;
• Service instability from third-party capacity providers used by our business;
• Changes in the outsourcing practices of our third-party logistics customers;
• Difficulty in obtaining material, equipment, goods, and services from our vendors and suppliers;
• Variability in insurance and claims expenses and the risks of insuring claims through our captive insurance company;
• The impact of laws and regulations that apply to our business, including those that relate to the environment, taxes, associates, owner-operators, and our captive insurance company; changes to those laws and regulations; and the increased costs of compliance with existing or future federal, state, and local regulations;
• Political, economic, and other risks from cross-border operations and operations in multiple countries;
• Risks associated with financial, credit, and equity markets, including our ability to service indebtedness and fund capital expenditures and strategic initiatives;
• Negative seasonal patterns generally experienced in the trucking industry during traditionally slower shipping periods and winter months;
• Risks associated with severe weather and similar events;
• Significant systems disruptions, including those caused by cybersecurity events;
• The potential that we will not successfully identify, negotiate, consummate, or integrate acquisitions;
• Exposure to claims and lawsuits in the ordinary course of business; and
• Our ability to adapt to new technologies and new participants in the truckload and transportation industry.

The Company undertakes no obligation to publicly release any revision to its forward looking statements to reflect events or circumstances after the date of this earnings release.

Conference Call and Webcast Information

The Company will host an earnings conference call today at 10:30 a.m. Eastern Time. The conference call can be accessed by dialing 877-451-6152 (U.S.) or 201-389-0879 (international). A replay will be available approximately three hours after the call through May 6th by dialing 844-512-2921 (U.S.) or 412-317-6671 (international). The passcode for the replay is 13717823. A live webcast of the conference call can also be accessed on the Investor Relations section of the Company’s website, Schneider.com.

Schneider National, Inc.

Key Performance Indicators by Segment

(unaudited)

We monitor and analyze a number of KPIs in order to manage our business and evaluate our financial and operating performance. Below are our KPIs by segment.

Truckload

The following table presents KPIs for our Truckload segment for the periods indicated, consistent with how revenues and expenses are reported internally for segment purposes. Descriptions of the two operations that make up our Truckload segment are as follows:

• Dedicated – Transportation services with equipment devoted to customers under long-term contracts.
• Network – Transportation services of one-way shipments.

Intermodal

The following table presents our KPIs for our Intermodal segment for the periods indicated.

Logistics

The following table presents our KPI for our Logistics segment for the periods indicated.

Schneider National, Inc.

Reconciliation of Non-GAAP Financial Measures

(unaudited)

In this earnings release, we present the following non-GAAP financial measures: (1) revenues (excluding fuel surcharge), (2) adjusted income from operations, (3) adjusted operating ratio, (4) adjusted net income, and (5) adjusted diluted earnings per share. We also provide reconciliations of these measures to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Management believes the use of each of these non-GAAP measures assists investors in understanding our business by (1) removing the impact of items from our operating results that, in our opinion, do not reflect our core operating performance, (2) providing investors with the same information our management uses internally to assess our core operating performance, and (3) presenting comparable financial results between periods. In addition, in the case of revenues (excluding fuel surcharge), we believe the measure is useful to investors because it isolates volume, price, and cost changes directly related to industry demand and the way we operate our business from the external factor of fluctuating fuel prices and the programs we have in place to manage fuel price fluctuations. Fuel-related costs and their impact on our industry are important to our results of operations, but they are often independent of other, more relevant factors affecting our results of operations and our industry.

Contacts

Steve Bindas, Director of Investor Relations

920-592-SNDR

[email protected]

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