Schneider National(SNDR) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section provides the unaudited consolidated financial information for Schneider National, Inc., including financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures Financial Statements This section presents the unaudited consolidated financial statements for Schneider National, Inc. for the quarter ended March 31, 2025, including comprehensive income, balance sheets, cash flows, and detailed notes Consolidated Statements of Comprehensive Income For the first quarter of 2025, the company reported operating revenues of $1,401.8 million, an increase from $1,319.0 million in the prior year period, with net income rising to $26.1 million, or $0.15 per diluted share Consolidated Statements of Comprehensive Income (Q1 2025 vs Q1 2024) | Metric (in millions, except per share data) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating revenues | $1,401.8 | $1,319.0 | | Income from operations | $42.1 | $28.7 | | Net income | $26.1 | $18.5 | | Diluted earnings per share | $0.15 | $0.10 | Consolidated Balance Sheets As of March 31, 2025, total assets were $4,978.5 million, a slight increase from year-end 2024, with total liabilities increasing to $1,990.3 million primarily due to a rise in long-term debt Consolidated Balance Sheet Highlights (as of March 31, 2025) | Metric (in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $1,165.0 | $1,115.3 | | Net property and equipment | $2,875.5 | $2,869.4 | | Goodwill | $339.6 | $377.9 | | Total Assets | $4,978.5 | $4,933.7 | | Total current liabilities | $614.2 | $704.5 | | Long-term debt and finance lease obligations | $565.8 | $420.8 | | Total Liabilities | $1,990.3 | $1,946.8 | | Total Shareholders' Equity | $2,988.2 | $2,986.9 | Consolidated Statements of Cash Flows Net cash provided by operating activities was $91.7 million for the first quarter of 2025, a decrease from the prior year, while net cash used in investing activities increased to $126.7 million Cash Flow Summary (Q1 2025 vs Q1 2024) | Activity (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $91.7 | $97.6 | | Net cash used in investing activities | $(126.7) | $(102.1) | | Net cash provided by (used in) financing activities | $23.6 | $(30.6) | | Net decrease in cash and cash equivalents | $(11.4) | $(35.1) | Notes to Consolidated Financial Statements The notes detail key accounting policies and events during the quarter, including the acquisition of Cowan, the company's debt structure, and segment performance breakdowns - On December 2, 2024, the company acquired Cowan for approximately $398.6 million, financed through cash and borrowings under a $400.0 million delayed-draw term loan facility[29] - Goodwill decreased from $377.9 million to $339.6 million in Q1 2025 due to a $38.3 million adjustment related to the Cowan acquisition[62] Debt and Credit Facilities (as of March 31, 2025) | Facility (in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Unsecured senior notes | $50.0 | $145.0 | | Revolving credit agreement | $50.0 | $— | | Receivables purchase agreement | $70.0 | $70.0 | | Delayed-draw term loan facility | $400.0 | $300.0 | | Total debt and credit facilities | $570.0 | $515.0 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the financial results for Q1 2025, highlighting a 6% increase in operating revenues and a 47% increase in income from operations, largely driven by the Cowan acquisition and improved Intermodal performance - Enterprise net income increased by $7.6 million (41%) in Q1 2025 compared to Q1 2024, driven by a $13.4 million increase in income from operations[122] - Operating revenues increased by $82.8 million (6%) in Q1 2025, primarily due to a $75.6 million increase in Truckload revenues (driven by the Cowan acquisition) and a $13.2 million increase in Intermodal revenues[124][129] - Key operating expense increases in Q1 2025 vs Q1 2024 include a $44.9 million (13%) rise in salaries, wages, and benefits and a $10.8 million (11%) increase in depreciation, both primarily due to the Cowan acquisition[130] Income from Operations by Segment (Q1 2025 vs Q1 2024) | Segment (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Truckload | $25.1 | $14.9 | | Intermodal | $13.8 | $7.0 | | Logistics | $8.1 | $5.4 | | Other | $(4.9) | $1.4 | | Total Income from operations | $42.1 | $28.7 | Truckload Segment Analysis The Truckload segment's income from operations increased by 68% to $10.2 million in Q1 2025, driven by a 14% increase in revenues (excluding fuel surcharge) primarily from increased Dedicated volumes following the Cowan acquisition Truckload Segment KPIs (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues (ex-fuel, $M) | $613.7 | $538.1 | | Average trucks | 12,279 | 10,884 | | Revenue per truck per week | $3,953 | $3,853 | | Operating ratio | 95.9% | 97.2% | - Truckload income from operations increased by $10.2 million (68%) year-over-year, driven by revenue growth from the Cowan acquisition, partially offset by higher insurance premiums[140] Intermodal Segment Analysis The Intermodal segment's income from operations nearly doubled, increasing 97% to $6.8 million in Q1 2025, due to a 5% increase in revenues (excluding fuel surcharge) driven by volume and revenue per order growth Intermodal Segment KPIs (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Orders | 104,440 | 100,494 | | Revenue per order | $2,467 | $2,442 | | Operating ratio | 94.7% | 97.2% | - Intermodal income from operations increased by $6.8 million (97%) year-over-year, attributed to volume growth, higher revenue per order, and a decrease in rail-related costs[146] Logistics Segment Analysis The Logistics segment's income from operations grew by 50% to $2.7 million in Q1 2025, primarily due to a higher net revenue per order, which offset lower brokerage volumes - Logistics revenues (excluding fuel surcharge) increased by $7.1 million (2%) in Q1 2025, driven by the Cowan acquisition, but offset by lower revenue per order and volume in the brokerage business[149] - Logistics income from operations increased by $2.7 million (50%) year-over-year, mainly due to an increase in net revenue per order[150] Liquidity and Capital Resources The company's primary liquidity source is cash from operations, supplemented by credit facilities, with Q1 2025 seeing a slight decrease in operating cash flow and increased debt to fund the Cowan acquisition - As of March 31, 2025, the company had combined available capacity of $234.5 million under its revolving credit and receivables purchase agreements[154] - Net cash provided by operating activities decreased by $5.9 million in Q1 2025 compared to Q1 2024, while net cash used in investing activities increased by $24.6 million[161][162] - Financing activities provided $54.2 million in cash, a reversal from the prior year, due to proceeds from the delayed-draw term loan and revolving credit agreements, partially offset by a large payment on unsecured senior notes[165] Quantitative and Qualitative Disclosures about Market Risk The company states that its market risks have not changed significantly from those disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - There have been no significant changes to market risks since the last annual report[172] Controls and Procedures Based on an evaluation by management, including the CEO and CFO, the company's disclosure controls and procedures were deemed effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[173] - No changes occurred during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[174] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, and details on unregistered sales of equity securities and use of proceeds Legal Proceedings The company is involved in various lawsuits in the ordinary course of business, which are not expected to have a material impact on its operations or financial statements - The Company is party to various lawsuits in the ordinary course of its business, which are not expected to have a material impact[176][89] Risk Factors There have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes have occurred to the risk factors disclosed in the 2024 Annual Report on Form 10-K[177] Unregistered Sales of Equity Securities and Use of Proceeds During the first quarter of 2025, the company repurchased 337,352 shares under its publicly announced program, with $46.1 million remaining available for future repurchases Share Repurchase Activity (Q1 2025) | Period | Total Shares Purchased | Avg. Price Paid | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | Jan 2025 | — | $— | — | | Feb 2025 | 210,776 | $27.29 | 53,352 | | Mar 2025 | 305,763 | $24.34 | 284,000 | | Total | 516,539 | | 337,352 | - As of March 31, 2025, the company had $46.1 million remaining under its $150.0 million share repurchase authorization[180]