Company Overview - Schneider National, Inc. (SNDR) is currently facing multiple headwinds, making it an unimpressive investment option [1] - The company's earnings estimates have been revised downward significantly, with a 21.1% decrease for the current quarter and a 16% decrease for the current year [1] Price Performance - SNDR's shares have declined by 23.3% year-to-date, compared to an 11.2% decline in the transportation-services industry [2] Earnings and Rank - SNDR holds a weak Zacks Rank of 4 (Sell) [6] - The company has a negative earnings surprise history, missing the Zacks Consensus Estimate in two of the last four quarters, with an average miss of 5.11% [6] Operational Challenges - The company's revenue is impacted by lower network volumes and reduced brokerage revenue per order, despite the acquisition of Cowan Systems [7] - Ongoing inflation and supply-chain disruptions are driving up costs, particularly in insurance, which negatively affects operating expenses [8] Industry Context - The transportation-services industry has a Zacks Industry Rank of 187 out of 247 groups, placing it in the bottom 24% of Zacks industries [10] - The performance of SNDR is likely to be influenced by the overall weak industry conditions, as studies indicate that 50% of a stock's price movement is tied to its industry group [10]

Group 1 - Schneider National, Inc. has demonstrated resilience in the face of macroeconomic disruptions over nearly a century of operations [1] - The company has faced soft demand in the past year, indicating challenges in the logistics sector [1] Group 2 - The author has extensive experience in the logistics sector and stock investing, focusing on ASEAN and NYSE/NASDAQ stocks [1] - The investment strategy includes diversification across various industries and market cap sizes, with holdings in banks, telco, logistics, and hotels [1] - The author began trading in the US market in 2020, gaining insights from Seeking Alpha and comparing analyses with the PH market [1]

Competitive Environment - The company operates in a highly competitive industry with significant price competition, which could adversely affect its operational results [74]. - A substantial portion of the company's revenues is derived from major customers, and the loss of any of these customers could materially impact its business [75]. - The logistics segment relies heavily on third-party capacity providers, and any issues with performance or pricing could adversely affect revenue and operations [92]. Operational Challenges - The company faces challenges in attracting and retaining qualified drivers, which may lead to increased compensation costs and negatively affect profitability [76]. - Economic conditions, tariffs, and geopolitical issues can adversely impact customer shipping volumes and operating costs, affecting overall financial performance [73]. - Labor disputes and potential unionization efforts could disrupt operations and lead to increased labor costs, adversely affecting financial results [78]. - The company's intermodal operations depend on railroads and ports, and disruptions in these services could negatively impact operational results [84]. Financial Risks - The company’s variable rate indebtedness exposes it to interest rate risk, which could significantly increase debt service obligations if interest rates rise [91]. - The company has not entered into derivative financial instruments to hedge against fuel price fluctuations during 2024, exposing it to potential risks [83]. - The company faces risks from insurance and claims expenses, which could significantly reduce earnings due to self-insurance and potential claims exceeding coverage limits [98]. Strategic Investments and Acquisitions - Strategic investments in technology and startups carry inherent risks and may result in significant volatility in earnings if expectations are not met [88]. - The company is actively pursuing acquisitions to enhance service offerings, but faces risks including integration difficulties and potential inability to generate sufficient revenue from these acquisitions [90]. - The acquisition of Cowan Systems on December 2, 2024, constituted 9.4% of total assets and 0.9% of operating revenues as of December 31, 2024 [271]. - The company acquired M&M Transport Services for $243.8 million, resulting in $103.5 million of goodwill recorded in the Truckload segment [334]. Financial Performance - Operating revenues for 2024 were $5,290.5 million, a decrease of 3.8% from $5,498.9 million in 2023 [276]. - Net income for 2024 was $117.0 million, down 50.0% from $238.5 million in 2023 [276]. - Basic earnings per share decreased to $0.67 in 2024 from $1.35 in 2023, representing a decline of 50.4% [276]. - Total operating expenses for 2024 were $5,125.3 million, a slight decrease of 1.5% compared to $5,202.5 million in 2023 [276]. Regulatory and Compliance Issues - The company is subject to various environmental laws and regulations, and violations could result in substantial fines or penalties, adversely affecting business operations [122]. - The company is monitoring compliance with federal and state greenhouse gas (GHG) regulations, which could increase costs and impact operations [120]. - Increased regulatory requirements regarding GHG emissions could lead to significant capital expenditures or operational changes, impacting financial performance [121]. - The SEC has adopted climate disclosure rules requiring the company to disclose climate-related risks that could materially impact its business strategy and financial condition [124]. Asset Management - The company has significant goodwill and long-lived assets totaling $3.4 billion as of December 31, 2024, with a total market value of outstanding shares at $5.1 billion [94]. - Goodwill related to the Cowan Systems acquisition was recorded at $46.2 million, reflecting expected synergies and growth opportunities [330]. - The company recorded goodwill of $103.5 million related to the acquisition of M&M after adjustments [338]. - The total intangible assets net carrying amount was $51.1 million as of December 31, 2024, compared to $56.1 million in 2023, indicating a decrease of approximately 8.9% [385]. Cash Flow and Capital Structure - Cash and cash equivalents increased to $117.6 million at the end of 2024 from $102.4 million at the end of 2023 [278]. - Long-term debt and finance lease obligations rose to $420.8 million in 2024, compared to $197.6 million in 2023, marking a significant increase of 112.5% [278]. - Net cash provided by operating activities was $686.1 million in 2024, slightly up from $680.0 million in 2023 [279]. - Dividends paid increased to $66.6 million in 2024 from $63.6 million in 2023, reflecting a growth of 4.7% [279]. Market and Stock Performance - The Class B common stock price has experienced volatility, ranging from $20.65 to $33.61 per share in 2024, which may impact investor confidence [107]. - The company is classified as a "controlled company," allowing it to rely on exemptions from certain corporate governance requirements, potentially making Class B stock less attractive to investors [105]. - Provisions in the company’s governance documents may deter hostile takeovers, potentially affecting the trading price of Class B common stock [109]. Internal Controls and Reporting - The company’s financial statements for the years ended December 31, 2024, and 2023 were audited and presented fairly in all material respects [259]. - The company’s internal control over financial reporting was deemed effective as of December 31, 2024 [269].

Core Insights - Schneider National, Inc. (SNDR) reported fourth-quarter 2024 earnings per share (EPS) of 20 cents, meeting the Zacks Consensus Estimate and reflecting a 25% improvement year-over-year [1] Financial Performance - Operating revenues for Q4 2024 were $1.33 billion, missing the Zacks Consensus Estimate of $1.38 billion and declining 2.4% year-over-year; revenues excluding fuel surcharge increased by 1% to $1.20 billion [2] - Adjusted income from operations grew 38% year-over-year to $45 million [2] Segment Performance - Truckload revenues (excluding fuel surcharge) reached $560.1 million, up 2% year-over-year, driven by the acquisition of Cowan Systems and organic growth, despite lower Network volumes; truckload revenue per truck per week was $4,100, a 1.1% increase year-over-year [3] - Truckload income from operations was $19.8 million, a 5% increase year-over-year, with an operating ratio of 96.5% compared to 96.6% in the prior year [4] - Intermodal revenues (excluding fuel surcharge) were $276.2 million, up 6% year-over-year, supported by a 3% volume growth and a 2% increase in revenue per order to $2,536 [5] - Intermodal income from operations surged 177% year-over-year to $17.2 million, with an improved operating ratio of 93.8% from 97.6% in the previous year [6] - Logistics revenues (excluding fuel surcharge) were $323.9 million, down 5% year-over-year, attributed to lower brokerage revenue and volumes; however, logistics income from operations increased 39% year-over-year to $8.5 million [7][8] Liquidity and Cash Flow - At the end of Q4 2024, cash and cash equivalents stood at $117.6 million, down from $179 million in the prior quarter; long-term debt increased to $420.8 million from $124.7 million [9] - Cash generated from operations was $199.5 million, with free cash flow totaling $93.8 million and net capital expenditures at $105.7 million [9] Shareholder Returns - In February 2023, SNDR approved a $150 million stock repurchase program, repurchasing 3.8 million Class B shares for $95.5 million by December 31, 2024 [10] - The company returned $66.6 million to shareholders in dividends year-to-date for 2024 [12] 2025 Outlook - For 2025, SNDR anticipates adjusted EPS in the range of $0.90 to $1.20, with a Zacks Consensus Estimate of $1.13; the company expects continued improvement in freight market conditions leading to revenue and earnings growth [13] - Projected net capital expenditures for 2025 are between $400 million and $450 million [13] - The effective tax rate for the full year is expected to be between 23% and 24% [14]

2 FOURTH QUARTER 2024 Investor Presentation INNOVATIVE – RESILIENT – DRIVEN • BUSINESS OVERVIEW • STRATEGY • CAPITAL ALLOCATION • TECHNOLOGY AND INNOVATION • PEOPLE AND VALUES • SECULAR TRENDS • INVEST WITH SNDR • CURRENT RESULTS AND OUTLOOK • SNDR ACQUISITION OF COWAN SYSTEMS, LLC • APPENDIX BUSINESS OVERVIEW Presentation highlights * * Mark Rourke Darrell Campbell Jim Filter 4 • Chief Executive Officer and President since 2019, previously serving as Executive Vice President and Chief Operating Officer. • ...

Core Insights - Schneider National reported $1.34 billion in revenue for Q4 2024, a year-over-year decline of 2.4%, with an EPS of $0.20 compared to $0.16 a year ago, indicating a slight improvement in earnings despite revenue decline [1] - The revenue fell short of the Zacks Consensus Estimate of $1.38 billion by 3.26%, while the EPS met the consensus estimate [1] Financial Performance Metrics - The operating ratio for the consolidated segment was reported at 96.8%, slightly worse than the estimated 96.3% [4] - The intermodal operating ratio was 93.8%, better than the estimated 94.4% [4] - The truckload operating ratio was 96.5%, compared to the average estimate of 95.2% [4] - The logistics operating ratio was 97.4%, slightly worse than the estimated 97.1% [4] Revenue Breakdown - Fuel surcharge revenue was $133.40 million, down 24.6% year-over-year, and below the average estimate of $146.98 million [4] - Inter-segment eliminations revenue was -$43.30 million, worse than the estimated -$35.45 million, but showed a 1.9% improvement year-over-year [4] - Logistics revenue was $323.90 million, below the average estimate of $331.54 million, reflecting a 5.3% decline year-over-year [4] - Other revenue was $88.80 million, slightly below the estimated $94.55 million, but showed a 5.8% increase year-over-year [4] - Excluding fuel surcharge, total revenue was $1.21 billion, below the average estimate of $1.25 billion, but represented a 0.9% year-over-year increase [4] - Intermodal revenue was $276.20 million, exceeding the average estimate of $271.74 million, with a year-over-year increase of 6% [4] - Truckload revenue was $560.10 million, slightly above the average estimate of $558.06 million, reflecting a 1.7% year-over-year increase [4] - Excluding fuel surcharge, network revenue was $185.10 million, below the estimated $207.73 million, showing an 11.9% decline year-over-year [4] Stock Performance - Schneider National's shares returned +1.7% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Company Performance - Schneider National reported quarterly earnings of $0.20 per share, matching the Zacks Consensus Estimate, and an increase from $0.16 per share a year ago [1] - The company posted revenues of $1.34 billion for the quarter, missing the Zacks Consensus Estimate by 3.26%, and a decrease from $1.37 billion year-over-year [2] - Over the last four quarters, Schneider National has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates [2][6] Market Comparison - Since the beginning of the year, Schneider National shares have increased by approximately 1.7%, while the S&P 500 has gained 2.7% [3] - The current Zacks Rank for Schneider National is 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $1.51 billion, and for the current fiscal year, it is $1.14 on revenues of $6.29 billion [7] - The outlook for the Transportation - Services industry, where Schneider National operates, is currently in the bottom 44% of over 250 Zacks industries, which may impact stock performance [8]

Financial Performance - Operating revenues for Q4 2024 were $1.339 billion, a decrease of 2% from $1.372 billion in Q4 2023[5] - Income from operations increased by 35% to $42.4 million in Q4 2024, compared to $31.3 million in Q4 2023[6] - Adjusted diluted earnings per share rose by 25% to $0.20 in Q4 2024, up from $0.16 in Q4 2023[5] - Net income for the year ended December 31, 2024, was $117.0 million, down 51.0% from $238.5 million in 2023[25] - The Truckload segment generated revenues of $560.1 million in Q4 2024, an increase of 1.3% from $550.7 million in Q4 2023[31] - Intermodal segment revenues for Q4 2024 were $276.2 million, up 5.4% from $260.6 million in Q4 2023[31] - Logistics segment revenues decreased to $323.9 million in Q4 2024 from $342.1 million in Q4 2023, a decline of 5.0%[31] - Revenues (excluding fuel surcharge) for Q4 2024 were $1,205.7 million, a 0.8% increase from $1,194.8 million in Q4 2023[52] - Adjusted net income for Q4 2024 was $34.5 million, compared to $28.4 million in Q4 2023, reflecting a 21.5% increase[61] - Adjusted EBITDA for Q4 2024 was $152.2 million, an increase from $131.6 million in Q4 2023, representing a 15.6% growth[63] - Free cash flow for Q4 2024 was $93.8 million, significantly higher than $48.4 million in Q4 2023[65] - Free cash flow for 2024 increased by $199.6 million compared to the same period in 2023[9] - Full year 2025 adjusted diluted earnings per share guidance is set at $0.90 - $1.20[17] Operational Metrics - The acquisition of Cowan Systems contributed to Dedicated business representing 70% of the Truckload segment as of year-end 2024[3] - Intermodal revenues increased by 6% to $276.2 million in Q4 2024, driven by a 3% growth in volume and higher revenue per order[13] - The average number of trucks in the Truckload segment was 10,919 for Q4 2024, slightly down from 10,942 in Q4 2023[37] - The operating ratio for the Truckload segment improved to 96.5% in Q4 2024 from 96.6% in Q4 2023[37] - Adjusted operating ratio improved to 96.3% in Q4 2024 from 97.3% in Q4 2023[59] - The company recorded total operating expenses of $1,296.7 million in Q4 2024, down from $1,340.4 million in Q4 2023[59] - Total operating expenses for the year ended December 31, 2024, were $5,125.3 million, a decrease of 1.5% from $5,202.5 million in 2023[25] Strategic Initiatives and Challenges - The company expects continued growth in revenues and profitability driven by operational efficiencies and market demand[68] - The company incurred acquisition-related costs of $1.4 million in Q4 2024, reflecting ongoing strategic expansion efforts[55] - The Company faces risks related to inflation both in the U.S. and globally, which could impact operational performance[69] - There are economic and business risks inherent in the truckload and transportation industry, including freight cycles and competitive pricing pressures[69] - The Company is challenged by cyclical driver shortages affecting truck capacity management and yield strategies[69] - Key customer and supply arrangements are critical, with potential disruptions from external factors such as natural disasters and pandemics[69] - The Company relies on owner-operators for a portion of its truck fleet, which poses risks in attracting and retaining qualified drivers[69] - Fluctuations in fuel prices and the ability to recover fuel costs through surcharge programs are significant concerns[69] - The Company must navigate changes in laws and regulations that impact its operations, including environmental and tax regulations[69] - There are risks associated with financial markets that could affect the Company's ability to service debt and fund capital expenditures[69] - The trucking industry experiences negative seasonal patterns during slower shipping periods, particularly in winter months[69] - The Company is exposed to cybersecurity risks and potential systems disruptions that could impact operations[69] Dividend Information - The company declared dividends of $0.095 per share for Q4 2024, an increase from $0.09 per share in Q4 2023[25]

Core Viewpoint - Schneider National, Inc. is enhancing its operations through the strategic acquisition of Cowan Systems for nearly $390 million, which is expected to strengthen its position in the dedicated transportation sector [1][5]. Group 1: Acquisition Details - Schneider has agreed to purchase Cowan Systems and related entities for a cash price of almost $390 million, with an additional agreement to acquire certain real estate assets for approximately $31 million [1][2]. - The acquisition will be financed using existing cash and borrowings from a new $400 million delayed draw term credit facility [2]. - The deal is expected to close in the fourth quarter of 2024, pending customary closing conditions [3]. Group 2: Operational Impact - Cowan Systems will function as a wholly owned subsidiary of Schneider, similar to previous acquisitions like Midwest Logistics Systems and M&M Transport Services [4]. - The acquisition is projected to be accretive to Schneider's earnings per share within the first year, excluding anticipated synergies [5]. - With the addition of Cowan Systems, Schneider will operate over 8,400 Dedicated tractors, representing nearly 70% of its Truckload fleet, enhancing its status as a leading dedicated provider in the transportation industry [5]. Group 3: Strategic Vision - Schneider's president and CEO, Mark Rourke, emphasized that this acquisition aligns with the company's long-term vision of customer-centric Dedicated solutions as a cornerstone of its Truckload segment [6].

Core Insights - Scope23 is a newly launched technology company aimed at providing accurate measurement and management of carbon emissions for shippers and transportation service providers [1] - The company focuses on creating an action platform that utilizes actual shipment-level data and AI to support companies in achieving decarbonization goals [2] Company Overview - Scope23 was founded by veterans from the transportation industry and is based in Chicago [1][5] - The company has received initial funding from Schneider National, Inc. and Pilot Company [3] Product Offering - Scope23's flagship product, GreenSight, captures detailed data points related to shipping, such as origins, destinations, and fueling options, and provides actionable recommendations [3][4] - The platform aims to operationalize carbon accounting into existing transportation and purchasing procedures, enhancing visibility and decision-making for shippers and carriers [3][5] Market Context - A survey by Boston Consulting Group indicates that 87% of leaders see AI as a valuable tool for combating climate change, with the potential to mitigate 5-10% of global GHG emissions by 2030 [3] - The market for sustainability tools in transportation is rapidly evolving, with increasing commitments from shippers and carriers to reduce carbon emissions [5] Strategic Partnerships - Scope23 has secured commitments from the majority of PepsiCo's third-party transportation fleet partners to provide comprehensive shipment-level data, enhancing its dataset [4] - The collaboration with PepsiCo aims to integrate Scope23's solutions across various teams to meet sustainability goals [3][4]