Description
Transportation and Logistics
Market Monitor
Spring 2016
MOSS ADAMS CAPITAL LLC
. Representative Transportation & Logistics Transactions
Transportation & Logistics
2
MOSS ADAMS CAPITAL LLC
. Table of Contents
Industry Update
4
Public Share Price Performance & Valuations
7
Recent M&A Activity & Valuations
11
Moss Adams Overview
17
Transportation & Logistics
3
MOSS ADAMS CAPITAL LLC
. Transportation & Logistics Update
 Consumer confidence measured 92.2 in February 2016 and jig-sawed up and down for most of 2015 reflecting consumers’ unease about
the direction of global economic growth and volatile equity markets, despite historically low unemployment, modestly rising wages, and
cheaper fuel prices
 Manufacturing contracted in February 2016 with PMI measuring 49.5% representing the fifth consecutive month of contraction
 Non-manufacturing activity in January 2016 measured 53.5% representing a decrease of 4.1% from December 2015 but marking the
72nd consecutive month of non-manufacturing growth
 Trucking tonnage remained flat in December 2015 and has measured in a very tight band over the last five quarters
 T&L indices (both share price performance and valuations) rebounded modestly in February 2016 relative to the lows reached in
January 2016
 M&A deal counts in the T&L market experienced the fourth straight year of decline; however, while deal counts have been trending
lower in recent years, 2015 M&A activity was underscored by several transactions valued at greater than $1 billion in enterprise value
─ Several notable, large M&A transactions in 2015 include:
• XPO Logistics’ acquisition of Con-Way for $3.0 billion
• UPS’ acquisition of Coyote Logistics for $1.8 billion
• XPO Logistics’ acquisition of Norbert Dentressangle for $3.0 billion
• Kintetsu World Express’ acquisition of APL Logistics for $1.2 billion
• Japan Post Bank’s acquisition of Toll holdings for $6.9 billion
• Fedex’s acquisition of GENCO Distribution Systems for $1.4 billion
 The owners of private T&L companies will continue to receive unsolicited calls from inquiring buyers --- being ready and
prepared will protect value
Source: Bureau of Transportation, ATA, Cass Information Systems, Moss Adams Capital analysis, Wall Street Journal
Transportation & Logistics
4
MOSS ADAMS CAPITAL LLC
. Trucking Tonnage Flat; Freight Shipments and Expenditures Lower
ATA U.S. TRUCKING TONNAGE INDEX
ISM PMI & NMI
December 2015: 134.7
70.0%
15.0%
65.0%
130
10.0%
125
55.0%
5.0%
120
0.0%
115
PMI
New Order
51.5%
(Feb. '16)
50.0%
45.0%
ISM PMI
49.5%
(Feb. '16)
40.0%
(5.0%)
110
ISM NMI
53.5%
(Jan.
'16) 60.0% Y/Y % Change 35.0% (10.0%) 105 Jan-16 Sep-15 Jan-15 May-15 Sep-14 Jan-14 May-14 Sep-13 Jan-13 May-13 Sep-12 Jan-12 May-12 Sep-11 Jan-11 May-11 Sep-10 Jan-10 May-10 (15.0%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 Sep-09 100 May-09 30.0% Jan-09 Seasonally Adjusted Tonnage (Quarterly Average) 135 Source: Institute for Supply Management Source: American Trucking Association CASS U.S. FREIGHT INDEX (Y/Y % CHANGE BY QUARTER) U.S. DIESEL FUEL PRICE & CONSUMER CONFIDENCE INDEX 40.0% Consumer Confidence Index 92.2 (Feb.
'16) 120 Expenditures (6.5%) 10.0% 0.0% (10.0%) Shipments (2.2%) (20.0%) $4.00 100 $3.50 80 $3.00 $2.50 Diesel Fuel $2.14 per Gallon (Jan. '16) 60 $2.00 40 $1.50 Diesel Fuel Price ($/gal) Monthly Average 20.0% Consumer Confidence Index 30.0% $4.50 $1.00 20 $0.50 (30.0%) Feb-16 Sep-15 Apr-15 Nov-14 Jun-14 Jan-14 Aug-13 Mar-13 Oct-12 May-12 Jul-11 Dec-11 Feb-11 Sep-10 Apr-10 Nov-09 Jan-09 Q4 15 Q3 15 Q2 15 Q1 15 Q4 14 Q3 14 Q2 14 Q1 14 Q4 13 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Q4 11 Q3 11 Q2 11 Q1 11 Q4 10 Q3 10 Q2 10 Q1 10 Q4 09 Q3 09 Q2 09 Q1 09 Source: Cass Information Systems Transportation & Logistics $0.00 Jun-09 0 (40.0%) Source: U.S. Energy Information Administration, The Conference Board 5 MOSS ADAMS CAPITAL LLC .
Rail Traffic and Container Volume Continues Trend Lower U.S. RAIL TRAFFIC – TOTAL CARLOADS U.S. INTERMODAL TRAFFIC 10.0% 5.0% 260,000 0.0% 240,000 (5.0%) 220,000 (10.0%) 200,000 (15.0%) 180,000 (20.0%) 160,000 25.0% 20.0% Average Total Intermodal per Week 280,000 280,000 260,000 15.0% 10.0% 240,000 5.0% 220,000 0.0% (5.0%) 200,000 Y/Y % Change 300,000 Average Total Carloads per Week 15.0% Y/Y % Change 320,000 (10.0%) (15.0%) 180,000 (20.0%) (25.0%) 160,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 (25.0%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 Source: AAR Source: AAR IATA SA GLOBAL FTK (Y/Y CHANGE) IMPORT / EXPORT MONTHLY CONTAINER VOLUME IATA FTK 30.0% 900,000 Dec. '15 Y/Y Change 40.0% 800,000 +0.8% 20.0% 700,000 10.0% 600,000 0.0% 500,000 (10.0)% 400,000 (20.0)% Port of Los Angeles 626,277 TEUs (Dec.
'15) 300,000 (30.0)% Port of Long Beach 536,188 TEUs (Jan. '16) Port of New York & New Jersey 499,225 TEUs (Dec. '15) (1) Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 200,000 Source: Port of Los Angeles, Port of Long Beach, Port of New York & New Jersey (1) Before 2011 Port of New York & New Jersey does not include empties, only loaded TEU’s Source: IATA Transportation & Logistics 6 MOSS ADAMS CAPITAL LLC .
Valuations Rebound Modestly From January 2016 Lows  Although the broader market has been down over the last twelve months, the Dow Jones and NASDAQ transportation indices significantly underperformed the S&P 500 over the same period  Valuations have seen a broad-based decline across all sectors over the last twelve month period, including the constituents consisting of the S&P 500  The broader market has managed to sustain a relatively modest decline in valuation multiples while transportation & logistics sectors have suffered greater percentage declines over the same period  However, share price performance has more recently rebounded in February from the lows hit in January 2016 ONE-YEAR SHARE PRICE PERFORMANCE PUBLIC MARKET VALUATIONS (ENTERPRISE VALUE / EBITDA) 10.0% 16.0x 5.0% 14.0x One Year % Change 0.0% Logistics (20.5%) 12.0x S&P 500 Index (8.0%) (5.0%) S&P 500 (3.5%) 10.0x (10.0%) NASDAQ Transportation Index (13.0%) (15.0%) Railroads (21.3%) 8.0x Dow Jones Transportation Average Index (18.9%) (20.0%) (25.0%) Expedited & Air (28.7%) Trucking (29.0%) 6.0x Feb-16 Jan-16 Dec-15 Nov-15 Oct-15 Aug-15 Jul-15 Jun-15 May-15 Mar-15 Feb-16 Jan-16 Dec-15 Nov-15 Oct-15 Aug-15 Jul-15 Jun-15 May-15 Apr-15 Mar-15 Apr-15 4.0x (30.0%) Source: S&P Capital IQ Note: The Freight Transportation and Logistics indices are composed of the public companies in the valuation section Transportation & Logistics 7 MOSS ADAMS CAPITAL LLC . Valuations Lower as Share Prices Trade Closer to 52 Week Lows ($ millions, except where noted) 2/28/16 Company Name Share Price TTM Data 52 week High/Low Market Cap Enterprise Value Sales EBITDA NTM Est. Growth EBITDA Margin Sales EBITDA EV Multiple TTM Sales TTM EBITDA NTM Sales NTM EBITDA Trucking JB Hunt Transport Services Inc. Old Dominion Freight Line Inc. Swift Transportation Company Knight Transportation Inc. Werner Enterprises Inc. Heartland Express, Inc. TransForce Inc. Saia, Inc. Marten Transport Ltd. ArcBest Corporation Covenant Transportation Group, Inc. Universal Truckload Services Inc. Celadon Group Inc. $78.05 64.81 17.96 25.20 26.91 18.78 15.97 26.15 16.71 20.07 22.18 15.85 9.05 $93.50 / $63.58 80.96 / 48.92 28.90 / 11.74 34.73 / 20.56 33.42 / 20.91 26.09 / 15.36 23.32 / 13.98 47.74 / 18.28 24.92 / 14.62 43.68 / 16.43 36.82 / 13.60 27.63 / 11.12 29.15 / 6.19 $8,802 5,482 2,454 2,039 1,937 1,580 1,559 653 547 521 400 450 252 $9,518 5,604 3,725 2,207 1,910 1,541 2,764 722 608 508 623 660 775 $6,188 2,972 4,229 1,183 2,094 736 2,904 1,221 665 2,667 724 1,129 1,026 $1,055 660 606 288 391 191 313 155 125 165 126 109 121 17.1% 22.2% 14.3% 24.4% 18.7% 25.9% 10.8% 12.7% 18.8% 6.2% 17.4% 9.6% 11.8% 7.2% 5.0% 1.8% 0.7% 2.1% (2.2%) 39.7% 0.1% 4.5% 2.9% (2.3%) 2.1% 8.2% 6.8% 7.7% 7.3% 2.2% 4.2% 12.6% 42.6% (1.5%) 11.8% 0.2% (1.7%) 1.2% 22.4% 1.54x 1.89x 0.88x 1.87x 0.91x 2.09x 0.95x 0.59x 0.91x 0.19x 0.86x 0.58x 0.76x 9.0x 8.5x 6.1x 7.7x 4.9x 8.1x 8.8x 4.7x 4.8x 3.1x 4.9x 6.1x 6.4x 1.43x 1.80x 0.87x 1.85x 0.89x 2.14x 0.68x 0.59x 0.87x 0.19x 0.88x 0.57x 0.70x 8.4x 7.9x 5.7x 7.5x 4.7x 7.2x 6.2x 4.7x 4.3x 3.1x 5.0x 6.0x 5.2x YRC Worldwide Inc. P.A.M. Transportation Services, Inc. USA Truck Inc. 8.43 28.44 15.72 21.37 / 6.67 67.61 / 22.13 32.14 / 11.58 275 202 151 1,179 274 250 4,832 417 508 259 62 56 5.4% 14.9% 11.0% (0.2%) NA (6.4%) 26.8% NA (2.8%) 0.24x 0.66x 0.49x 4.6x 4.4x 4.5x 0.24x NA 0.53x 3.6x NA 4.6x Average Median $2,054 $977 $2,094 $1,202 $293 $178 15.1% 14.6% 4.2% 2.1% 9.3% 6.8% 0.96x 0.87x 6.0x 5.5x 0.95x 0.87x 5.6x 5.2x Source: S&P Capital IQ Note: Not meaningful (NM) if EV/Sales is greater than 5x, or EV/EBITDA is greater than 30x. NA if denominator is 0, for percentages and multiples, or if estimates are not available.
NTM figures are based on the median estimate of Wall St. analysts. Transportation & Logistics 8 MOSS ADAMS CAPITAL LLC . Expedited & Air Expected to Outperform Over Next Twelve Months ($ millions, except where noted) 2/28/16 Company Name Share Price TTM Data 52 week High/Low Market Cap Enterprise Value Sales EBITDA NTM Est. Growth EBITDA Margin Sales EBITDA EV Multiple TTM Sales TTM EBITDA NTM Sales NTM EBITDA Railroads Union Pacific Corporation $80.00 $124.52 / $67.06 $67,713 $76,316 $21,813 $10,064 46.1% (3.9%) (1.6%) 3.50x 7.6x 3.64x 7.7x Canadian National Railway Company 58.26 65.40 / 49.16 45,948 53,530 9,089 4,630 50.9% 41.8% 45.7% 5.89x 11.6x 4.15x 7.9x Norfolk Southern Corporation 74.70 112.05 / 64.51 22,275 29,879 10,511 3,943 37.5% (4.0%) 2.2% 2.84x 7.6x 2.96x 7.4x 120.30 180.83 / 103.33 18,400 24,530 4,838 2,317 47.9% 40.0% 48.5% 5.07x 10.6x 3.62x 7.1x CSX Corp. 24.31 37.67 / 21.33 23,414 31,523 11,811 4,799 40.6% (5.3%) (3.9%) 2.67x 6.6x 2.82x 6.8x Kansas City Southern 83.93 120.63 / 62.20 9,106 10,795 2,419 1,098 45.4% (1.3%) 3.0% 4.46x 9.8x 4.52x 9.5x Genesee & Wyoming Inc. 57.12 105.49 / 41.56 3,295 5,351 2,000 571 28.5% 0.5% 3.5% 2.67x 9.4x 2.66x 9.1x Average Median $33,132 $29,879 $8,926 $9,089 $3,917 $3,943 42.4% 45.4% 9.7% (1.3%) 13.9% 3.0% 3.87x 3.50x 9.0x 9.4x 3.48x 3.62x 7.9x 7.7x Canadian Pacific Railway Limited Expedited and Air United Parcel Service, Inc. $97.44 $107.32 / $87.30 86,175 $93,888 $58,363 $9,747 16.7% 5.9% 7.1% 1.61x 9.6x 1.52x 9.0x FedEx Corporation 137.38 185.19 / 119.71 37,864 41,204 48,562 7,271 15.0% 4.5% 10.9% 0.85x 5.7x 0.81x 5.1x 36.88 59.47 / 31.99 909 2,293 1,823 390 21.4% 4.2% 2.5% 1.26x 5.9x 1.21x 5.7x Average Median $45,795 $41,204 $36,249 $48,562 $5,803 $7,271 17.7% 16.7% 4.9% 4.5% 6.8% 7.1% 1.24x 1.26x 7.1 x 5.9 x 1.18x 1.21x 6.6x 5.7x Atlas Air Worldwide Holdings, Inc. Source: S&P Capital IQ Note: Not meaningful (NM) if EV/Sales is greater than 5x, or EV/EBITDA is greater than 30x. NA if denominator is 0, for percentages and multiples, or if estimates are not available. NTM figures are based on the median estimate of Wall St.
analysts. Transportation & Logistics 9 MOSS ADAMS CAPITAL LLC . Logistics Companies’ Valuations Remain Bright Spot in T&L Sector ($ millions, except where noted) 2/28/16 Company Name Share Price TTM Data 52 week High/Low Market Cap Enterprise Value Sales EBITDA NTM Est. Growth EBITDA Margin Sales EBITDA EV Multiple TTM Sales TTM EBITDA NTM Sales NTM EBITDA Logistics Expeditors International of Washington Inc. $46.08 $51.80 / $40.41 $8,391 $7,573 $6,617 $767 11.6% (1.8%) (0.7%) 1.14x 9.9x 1.17x 9.9x CH Robinson Worldwide Inc. 70.35 76.18 / 59.71 10,076 10,568 13,476 925 6.9% 1.1% 5.3% 0.78x 11.4x 0.78x 10.8x Landstar System Inc. 60.24 73.60 / 53.03 2,555 2,543 3,322 271 8.1% (2.6%) (2.8%) 0.77x 9.4x 0.79x 9.7x Hub Group Inc. 37.14 44.00 / 28.19 1,324 1,185 3,526 154 4.4% 2.5% 5.6% 0.34x 7.7x 0.33x 7.3x XPO Logistics, Inc. 25.01 50.96 / 18.04 2,739 5,257 7,623 494 6.5% NM NM 0.69x 10.6x 0.34x 4.2x Forward Air Corp. 40.85 57.65 / 36.57 1,248 1,390 959 141 14.7% 7.5% 14.3% 1.45x 9.9x 1.35x 8.6x Roadrunner Transportation Systems, Inc. 11.99 28.51 / 6.39 459 817 1,995 130 6.5% 1.1% 9.4% 0.41x 6.3x 0.41x 5.7x Universal Truckload Services Inc. Echo Global Logistics, Inc. 15.85 25.39 27.63 / 11.12 34.35 / 16.56 450 786 596 872 1,129 1,512 109 45 9.6% 3.0% 2.1% 22.4% 1.2% 98.3% 0.53x 0.58x 5.5x 19.3x 0.52x 0.47x 5.4x 9.7x 3.18 8.00 / 2.95 155 195 724 21 2.9% 19.8% 49.2% 0.27x 9.2x 0.23x 6.2x Average Median $3,100 $1,287 $4,088 $2,659 $306 $147 7.4% 6.7% 5.8% 2.1% 20.0% 5.6% 0.70x 0.63x 9.9x 9.6x 0.64x 0.49x 7.8x 8.0x Radiant Logistics, Inc. Source: S&P Capital IQ Note: Not meaningful (NM) if EV/Sales is greater than 5x, or EV/EBITDA is greater than 30x. NA if denominator is 0, for percentages and multiples, or if estimates are not available. NTM figures are based on the median estimate of Wall St.
analysts. Transportation & Logistics 10 MOSS ADAMS CAPITAL LLC . Middle Market M&A Volume Declines in Q4 after Historic Q1 - Q3  Overall, 2015 was a record year for M&A with transaction values totaling $4.7 trillion, according to Thomson Reuters  EBITDA multiples in middle market transactions in Q4 2015 finished the quarter at 8.3x EBITDA, equal to the 5 year average for this metric and up from Q2 and Q3 2015  In Q4 2015, U.S. middle market M&A deal volumes declined 15% from Q3 2015, and declined 26% from Q4 2015  Q4 2015 EBITDA margins of reportable transactions increased modestly but remained consistent with the 5 year average --- Reported EBTIDA margins in Q4 2015 were 9%, while the 5 year average is 8%  U.S. middle market M&A activity in Q4 2015, measured by deal values, remained consistent with prior quarters at $94 billion U.S. MIDDLE MARKET M&A 1 U.S.
MIDDLE MARKET M&A VALUATIONS 2 1) Middle market M&A includes transactions with undisclosed values, and disclosed values where EV < $500 million. 2) Middle market M&A includes transactions with disclosed EBITDA, where EV < $500 million and EV/EBITDA between 3.0x and 15.0x. Note: transactions with disclosed EBITDA represent <5% of all transactions. Source: CapitalIQ. Transportation & Logistics 11 MOSS ADAMS CAPITAL LLC . T&L Deal Volume Lower Amid Numerous $1+ Billion Transactions  Modest sales growth is expected across transportation & logistics sectors as world trade growth is expected to remain subdued in 2016  M&A deal activity in the T&L market experienced the fourth straight year of declines  Railroads continue to lag the overall market as favorable fuel prices result in alternative forms of transportation  While deal counts have been trending lower in recent years, 2015 M&A activity was underscored by multiple transactions valued at greater than $1 billion in enterprise value NEXT 12 MONTHS: ESTIMATED GROWTH GLOBAL TRANSPORTATION & LOGISTICS M&A ACTIVITY 1 12.0% 300 10.0% 265 8.0% S&P 500 6.5% 6.0% Expedited and Air 4.5% 4.0% 2.0% Trucking Logistics 2.1% S&P 500 2.1% 1.7% 0.0% 250 Expedited and Air 7.1% Trucking 6.8% 285 277 254 243 226 218 193 188 200 Logistics 5.6% 153 150 Railroads 3.0% 100 50 Railroads (1.3%) 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 -2.0% Sales Growth 1) EBITDA Growth Global T&L M&A activity revised to include only control, closed transactions, as well as transactions with undisclosed values Note: The Freight Transportation and Logistics indices are composed of the public companies in the valuation section; estimated growth is based on the median estimates of Wall Street analysts Source: S&P Capital IQ Transportation & Logistics 12 MOSS ADAMS CAPITAL LLC . Select, Recent Transportation & Logistics M&A Activity ($ millions, except multiples) Implied Enterprise Value - Close Date Acquirer / Investor Target Target Description EV / Revenue EV / EBITDA Pending Worldwide Flight Services, Inc. Consolidated Aviation Services LLC Provides cargo handling services throughout the United States and South America Pending FedEx Corporation (NYSE:FDX) TNT Express N.V. (ENXTAM:TNTE) Provides express delivery services to businesses and consumers worldwide $4,971 0.60x 9.4x 2/18/2016 CitySprint (UK) Limited Dunedin LLP Provides courier and logistics services $115 0.55x 4.8x 1/22/2016 DSV A/S (CPSE:DSV) UTi Worldwide Inc. Non-asset-based supply chain services and solutions company $1,547 0.30x 11.2x 1/14/2016 Heniff Transportation Systems EZ Alternative Transport Provides bulk chemical hauling services - - - 1/12/2016 Pitney Bowes Inc. Enroute Systems Corporation Provides SaaS transportation management systems - - - 12/1/2015 ABF Logistics II, Inc. Bear Transportation Services, LP Provides transportation, logistics, and supply chain management services $26 11/3/2015 Geodis S. A. Ozburn-Hessey Logistics, LLC Provides third party logistics services $800 11/2/2015 Bluefin Investments Limited IN tIME Express Logistik GmbH Business-to-business direct and express shipments company $169 1.10x 8.7x 10/28/2015 XPO Logistics, Inc. (NYSE:XPO) Con-way Inc. Provides transportation, logistics, and supply chain management services $3,057 0.53x 6.2x 9/17/2015 Span-Alaska Transportation, Inc. Pacific Alaska Freightways, Inc. Provides freight transportation services to businesses and consumers in Alaska - - - 9/17/2015 Transplace Inc. M33 Integrated Solutions, Inc. Provides logistics, supply chain, and transportation management services - - - 8/27/2015 Magnate Worldwide, LLC TrumpCard Inc. Specializes in the transportation of domestic heavyweight air and expedited LTL freight - - - 8/24/2015 Levine Leichtman Capital Partners Regional Rail, LLC Operates shortlines, regional railroads, and switching services in the eastern U.S. - - - 8/18/2015 United Parcel Service, Inc.
(NYSE:UPS) Coyote Logistics, LLC Provides third-party transportation and logistics services 8/18/2015 Apax Partners LLP Quality Distribution Inc. Transports bulk chemicals 8/10/2015 Daseke, Inc. Hornady Transportation LLC Provides flatbed carrier trucking services - - - 8/4/2015 Dicom Transportation Group, L.P. Courier Express Enterprises LLC Provides last mile delivery services - - - - 0.22x - - 10.0x $1,800 0.86x - $777 0.79x 11.3x Source: S&P Capital IQ, company filings, news releases, Moss Adams Capital. Transportation & Logistics 13 MOSS ADAMS CAPITAL LLC . Select, Recent Transportation & Logistics M&A Activity ($ millions, except multiples) Close Date Acquirer / Investor Target 8/4/2015 Kuehne + Nagel International AG (SWX:KNIN) ReTrans, Inc. Provides logistics management and multimodal shipping services 7/31/2015 Teekay Tankers Ltd. (NYSE:TNK) SPT Inc. 7/28/2015 Roadrunner Transportation Systems, Inc. (NYSE:RRTS) 7/27/2015 Implied Enterprise Value Target Description EV / Revenue EV / EBITDA - - - Provides ship to ship cargo transfer services $44 - - Stagecoach Cartage and Distribution, LP. Provides a broad range of transportation and warehousing services $40 1.18x 5.7x CAI International Inc. (NYSE:CAI) ClearPointt, LLC Offers intermodal, LTL, and overdimensional shipment services $4 0.13x - 7/21/2015 Dicom Transportation Group, L.P. EXTRA Express Cerritos, Inc. Offers logistics, transportation, distribution, and warehousing services - - - 7/1/2015 Daseke, Inc. Bulldog Hiway Express Provides truck load and intermodal carrier services - - - 6/15/2015 UPS Capital Corporation Parcel Pro Inc. Provides insured shipping and logistics services - - - 6/12/2015 Capstone Logistics, LLC Pinnacle Workforce Logistics, LLC Provides workforce logistics services - - - 6/9/2015 Radiant Logistics, Inc. (AMEX:RLGT) Highways & Skyways, Inc. Logistics management company - - - 6/8/2015 Radiant Logistics, Inc.
(AMEX:RLGT) Service By Air, Inc. Provides air freight shipping, global logistics, and international freight services 6/8/2015 XPO Logistics, Inc. (NYSE:XPO) Norbert Dentressangle S.A. (ENXTPA:XPO) Provides transport, logistics, and air and sea freight forwarding services 6/1/2015 XPO Logistics, Inc.
(NYSE:XPO) Bridge Terminal Transport Inc. 6/1/2015 Echo Global Logistics, Inc. (NasdaqGS:ECHO) 6/1/2015 $12 0.09x - $3,010 0.70x 10.5x Offers marine container transportation services $100 0.43x 8.1x Command Transportation, LLC Provides freight brokerage services for Fortune 500 and other clients $411 0.73x 11.1x TAGG Logistics, LLC ABC Fulfillment, LLC Offers logistics and fulfillment services - 5/29/2015 Kintetsu World Express, Inc. (TSE:9375) APL Logistics Ltd Provides supply chain solutions $1,200 0.70x 15.0x 5/28/2015 Japan Post Bank Co., Ltd. (TSE:7182) Toll Holdings Limited Provides integrated logistics services $6,922 0.90x 11.9x 5/8/2015 American Fast Freight, Inc. Caribbean Shipping Services, Inc. Provides refrigerated freight forwarding services in the Puerto Rico market - - - 5/8/2015 Penske Logistics, Inc. Transfreight North America Provides third-party logistics services - - - - - Source: S&P Capital IQ, company filings, news releases, Moss Adams Capital. Transportation & Logistics 14 MOSS ADAMS CAPITAL LLC .
Select, Recent Transportation & Logistics M&A Activity ($ millions, except multiples) Implied Enterprise Value Close Date Acquirer / Investor Target Target Description EV / Revenue EV / EBITDA 4/9/2015 TBX Group, Inc. Logistics IQ LLC Provides a broad range of transportation services 3/25/2015 Genesee & Wyoming Inc. (NYSE:GWR) Freightliner Group Limited Provides rail freight services for blue-chip organizations $761 1.10x - 3/9/2015 Forward Air, Inc. CLP Towne Inc. Offers time-sensitive, LTL shipments for air freight and commercial companies $125 - - 2/9/2015 XPO Last Mile, Inc. UX Specialized Logistics Provides a broad range of transportation services $59 0.52x 7.2x 2/5/2015 Echo Global Logistics, Inc. (NasdaqGS:ECHO) Xpress Solutions, Inc. Offers truckload, LTL, refrigerated, expedited, ocean, intermodal, and air $9 0.71x - 2/2/2015 Saia, Inc. (NasdaqGS:SAIA) Linkex, Inc. Provides logistics and transport management services $25 0.69x - 1/30/2015 FedEx Corporation (NYSE:FDX) GENCO Distribution Systems, Inc. Third-party reverse logistics company $1,380 0.90x 9.8x 1/20/2015 Celadon Group Inc. (NYSE:CGI) Taylor Express, Inc. Truckload commodity carrier $43 1.13x - 1/2/2015 ABF Logistics II, Inc. Smart Lines, LLC Transportation brokerage company $5 0.29x - 1/1/2015 C.H.
Robinson Company, Inc. Freightquote.com, Inc. Transportation brokerage company $365 0.59x 10.7x Mean $1,029 0.66x 9.5x Median $169 0.70x 9.9x - - - Source: S&P Capital IQ, company filings, news releases, Moss Adams Capital. Transportation & Logistics 15 MOSS ADAMS CAPITAL LLC . Overview of Select Notable Transactions UNITED PARCEL SERVICE, INC.’S ACQUISITION OF COYOTE LOGISTICS, LLC – AUGUST 2015  UPS is a package delivery company and provides transportation, logistics, and financial services  In August 2015, UPS acquired Coyote Logistics for approximately $1.8 billion from private equity fund Warburg Pincus LLC  The transaction positions UPS with a leading platform in a high-growth adjacent industry that is complementary to its Supply Chain & Freight solutions capabilities  Furthermore, significant synergy potential in asset utilization and scale efficiency in the amount of $100 million - $150 million  “The brokered full-truckload freight segment is a high growth market and we expect it will continue to outpace other transportation segments…this high quality acquisition significantly increases UPS full-truckload scale and we are uniquely positioned to take advantage of exciting new revenue growth and synergy opportunities.”” -- David Abney, Chief Executive Officer, UPS  Coyote Logistics, LLC provides third-party transportation and logistics services for the consultative, executional, and transactional supply chain needs of Fortune 100 companies and small businesses in the United States, Mexico, and Canada APAX PARTNERS LLP’S ACQUISITION OF QUALITY DISTRIBUTION INC. – AUGUST 2015  Apax Partners is a private equity investment group that operates globally and has more than 30 years of investing experience. Apax Partners has advised funds that total over $40 billion around the world in aggregate. These funds provide long-term equity financing to build and strengthen world-class companies  In August 2015, Apax Partners acquired Quality Distribution for approximately $777 million, representing an approximately 0.79x revenue and 11.3x EBITDA multiple  The transaction price represents a premium of approximately 63% over Quality Distribution’s closing share price on May 6, 2015  “Having followed Quality for several years, we are impressed with the strategy and vision articulated by the management team…as the leading logistics platform in the bulk chemical transportation industry, Quality is well positioned to take advantage of both organic growth opportunities and strategic acquisitions while benefiting from the financial and operational flexibility of operating as a private company.
We look forward to partnering with Quality’s management team as they pursue the Company’s next phase of growth” -- Ashish Karandikar, Partner, Apax Partners  Quality Distribution operates the largest chemical bulk logistics network in North America and is the largest North American provider of intermodal tank container and depot services Source: S&P Capital IQ, company filings, news releases, Moss Adams Capital. Transportation & Logistics 16 MOSS ADAMS CAPITAL LLC . Moss Adams at a Glance: Leadership through Experience and Results Moss Adams Capital LLC Moss Adams LLP • • 100+ years old – Founded in 1913 • Largest accounting firm headquartered in the western U.S. • 2,400 employees in 28 locations • Fully integrated accounting, tax, and business advisory firm • Middle-market specialists • The Moss Adams Advantage: Discrete, highly leverageable transaction resources and services Full-service investment banking and strategic advisor services • Dedicated industry specialists • Focus on privately owned and family-held companies • Mergers and acquisitions • Private debt & equity placements • Mezzanine capital • Due Diligence preparation & advisory International Presence • Transportation & Logistics Major market affiliates throughout the U.S. and more than 100 countries around world 17 MOSS ADAMS CAPITAL LLC . Expert Teams INDUSTRY KNOWLEDGE MATCHED WITH AN EXPERIENCED TEAM • Senior Level Attention • Commitment to our Clients • Professional Excellence • Objective & Independent Advice • Creating Value for Owners • Global Presence & Capabilities Premier accounting and financial services advice for middle market transportation and logistics companies. Transportation & Logistics 18 MOSS ADAMS CAPITAL LLC . Moss Adams Capital Overview Full Service Middle Market Investment Bank Corporate Finance Comprehensive Industry Coverage  Capital Placement – Equity and Debt Aerospace, Defense & Government Services Food, Beverage & Agriculture Healthcare Services & Products Infrastructure & Construction Paper, Plastics, & Packaging Real Estate, Lodging & Leisure  Exclusive sales and divestitures Business & Marketing Services Industrials / Niche Manufacturing  Strategic alternatives assessment Automotive & Dealer Services Consumer, Retail & Apparel  Merger and acquisition advisory Technology, Communications, & Media Transportation & Logistics  Strategic planning  Management buy-outs  Recapitalizations  Fairness opinions  Restructuring and special situations advisory Highlights and Accomplishments  Completed over 250 transactions  Access to key decision-makers among institutional investor universe  Coverage of relevant strategic partners  Average of 20 years of investment banking experience among senior leaders Transportation & Logistics 19 MOSS ADAMS CAPITAL LLC . Global Reach Moss Adams is a founding member of Praxity, AISBL, a global alliance of independent accounting firms. In addition to its deep, direct international relationships, Praxity provides access and trusted advisory expertise worldwide Europe Austria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, Jersey, Latvia, Lithuania, Luxembourg, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Spain, Sweden, Switzerland, Turkey, United Kingdom , Ukraine North America United States, Canada Asia China, Indonesia, Japan, South Korea, Malaysia, Singapore, Taiwan, Thailand, Vietnam Middle East and Indian Subcontinent Latin America and Caribbean Argentina, Brazil, Cayman islands, Chile, Colombia, Mexico, Puerto Rico, Uruguay, Venezuela Transportation & Logistics India, Israel, Lebanon, Pakistan, United Arab Emirates Africa Algeria, Angola, Benin, Botswana, Cameroon, Cape Verde, Djibouti, Egypt, Ghana, Ivory Coast, Lesotho, Madagascar, Mauritius, Morocco, Senegal, South Africa, Tunisia, Zambia 20 Australasia Australia, New Zealand MOSS ADAMS CAPITAL LLC . Global M&A Reach Through Local Relationships Local, National and Global Reach Our affiliation with CFxB consists of 150+ Corporate Finance Professionals across the U.S. and in over 25 countries more than 25 countries Mazars Europe 140 offices Mazars M&A 20 offices MNP Corporate Finance 10 offices MNP LLP 70 offices Mazars Asia 25 offices Moss Adams Capital 3 offices Moss Adams LLP 28 offices Weiser Mazars 6 offices William Buck CAA 6 offices Mazars Middle East 15 offices BKD Corporate Finance 4 offices BKD LLP 33 offices Mazars South America 20 offices Transportation & Logistics Mazars Africa 40 offices 21 MOSS ADAMS CAPITAL LLC . Contact Us Moss Adams Capital LLC 2040 Main Street Suite 900 Irvine, CA 92614 999 Third Avenue Suite 2800 Seattle, WA 98104 Richard Anderson Managing Director (949) 221-4006 rich.anderson@mossadams.com Tyler Dale Vice President (949) 221-4030 tyler.dale@mossadams.com Andrew Suen Vice President (949) 517-9428 andrew.suen@mossadams.com Wiley Kitchell Managing Director (206) 302-6780 wiley.kitchell@mossadams.com Robert Miranda Vice President (949) 221-4021 robert.miranda@mossadams.com Bradley Erhart Associate (949) 517-9452 bradley.erhart@mossadams.com Harman Wales Managing Director (206) 302-6770 jet.wales@mossadams.com James Rothenberger Vice President (206) 302-6777 james.rothenberger@mossadams.com James Parr Analyst (949) 221- 4099 james.parr@mossadams.com Brandon Clewett Director (949) 517-9426 brandon.clewett@mossadams.com Scott Porter Vice President (206) 306-6326 scott.porter@mossadams.com Daniel Seubert Analyst (206) 302-6775 daniel.seubert@mossadams.com Transportation & Logistics 22 MOSS ADAMS CAPITAL LLC .
'16) 60.0% Y/Y % Change 35.0% (10.0%) 105 Jan-16 Sep-15 Jan-15 May-15 Sep-14 Jan-14 May-14 Sep-13 Jan-13 May-13 Sep-12 Jan-12 May-12 Sep-11 Jan-11 May-11 Sep-10 Jan-10 May-10 (15.0%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 Sep-09 100 May-09 30.0% Jan-09 Seasonally Adjusted Tonnage (Quarterly Average) 135 Source: Institute for Supply Management Source: American Trucking Association CASS U.S. FREIGHT INDEX (Y/Y % CHANGE BY QUARTER) U.S. DIESEL FUEL PRICE & CONSUMER CONFIDENCE INDEX 40.0% Consumer Confidence Index 92.2 (Feb.
'16) 120 Expenditures (6.5%) 10.0% 0.0% (10.0%) Shipments (2.2%) (20.0%) $4.00 100 $3.50 80 $3.00 $2.50 Diesel Fuel $2.14 per Gallon (Jan. '16) 60 $2.00 40 $1.50 Diesel Fuel Price ($/gal) Monthly Average 20.0% Consumer Confidence Index 30.0% $4.50 $1.00 20 $0.50 (30.0%) Feb-16 Sep-15 Apr-15 Nov-14 Jun-14 Jan-14 Aug-13 Mar-13 Oct-12 May-12 Jul-11 Dec-11 Feb-11 Sep-10 Apr-10 Nov-09 Jan-09 Q4 15 Q3 15 Q2 15 Q1 15 Q4 14 Q3 14 Q2 14 Q1 14 Q4 13 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Q4 11 Q3 11 Q2 11 Q1 11 Q4 10 Q3 10 Q2 10 Q1 10 Q4 09 Q3 09 Q2 09 Q1 09 Source: Cass Information Systems Transportation & Logistics $0.00 Jun-09 0 (40.0%) Source: U.S. Energy Information Administration, The Conference Board 5 MOSS ADAMS CAPITAL LLC .
Rail Traffic and Container Volume Continues Trend Lower U.S. RAIL TRAFFIC – TOTAL CARLOADS U.S. INTERMODAL TRAFFIC 10.0% 5.0% 260,000 0.0% 240,000 (5.0%) 220,000 (10.0%) 200,000 (15.0%) 180,000 (20.0%) 160,000 25.0% 20.0% Average Total Intermodal per Week 280,000 280,000 260,000 15.0% 10.0% 240,000 5.0% 220,000 0.0% (5.0%) 200,000 Y/Y % Change 300,000 Average Total Carloads per Week 15.0% Y/Y % Change 320,000 (10.0%) (15.0%) 180,000 (20.0%) (25.0%) 160,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 (25.0%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 Source: AAR Source: AAR IATA SA GLOBAL FTK (Y/Y CHANGE) IMPORT / EXPORT MONTHLY CONTAINER VOLUME IATA FTK 30.0% 900,000 Dec. '15 Y/Y Change 40.0% 800,000 +0.8% 20.0% 700,000 10.0% 600,000 0.0% 500,000 (10.0)% 400,000 (20.0)% Port of Los Angeles 626,277 TEUs (Dec.
'15) 300,000 (30.0)% Port of Long Beach 536,188 TEUs (Jan. '16) Port of New York & New Jersey 499,225 TEUs (Dec. '15) (1) Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 200,000 Source: Port of Los Angeles, Port of Long Beach, Port of New York & New Jersey (1) Before 2011 Port of New York & New Jersey does not include empties, only loaded TEU’s Source: IATA Transportation & Logistics 6 MOSS ADAMS CAPITAL LLC .
Valuations Rebound Modestly From January 2016 Lows  Although the broader market has been down over the last twelve months, the Dow Jones and NASDAQ transportation indices significantly underperformed the S&P 500 over the same period  Valuations have seen a broad-based decline across all sectors over the last twelve month period, including the constituents consisting of the S&P 500  The broader market has managed to sustain a relatively modest decline in valuation multiples while transportation & logistics sectors have suffered greater percentage declines over the same period  However, share price performance has more recently rebounded in February from the lows hit in January 2016 ONE-YEAR SHARE PRICE PERFORMANCE PUBLIC MARKET VALUATIONS (ENTERPRISE VALUE / EBITDA) 10.0% 16.0x 5.0% 14.0x One Year % Change 0.0% Logistics (20.5%) 12.0x S&P 500 Index (8.0%) (5.0%) S&P 500 (3.5%) 10.0x (10.0%) NASDAQ Transportation Index (13.0%) (15.0%) Railroads (21.3%) 8.0x Dow Jones Transportation Average Index (18.9%) (20.0%) (25.0%) Expedited & Air (28.7%) Trucking (29.0%) 6.0x Feb-16 Jan-16 Dec-15 Nov-15 Oct-15 Aug-15 Jul-15 Jun-15 May-15 Mar-15 Feb-16 Jan-16 Dec-15 Nov-15 Oct-15 Aug-15 Jul-15 Jun-15 May-15 Apr-15 Mar-15 Apr-15 4.0x (30.0%) Source: S&P Capital IQ Note: The Freight Transportation and Logistics indices are composed of the public companies in the valuation section Transportation & Logistics 7 MOSS ADAMS CAPITAL LLC . Valuations Lower as Share Prices Trade Closer to 52 Week Lows ($ millions, except where noted) 2/28/16 Company Name Share Price TTM Data 52 week High/Low Market Cap Enterprise Value Sales EBITDA NTM Est. Growth EBITDA Margin Sales EBITDA EV Multiple TTM Sales TTM EBITDA NTM Sales NTM EBITDA Trucking JB Hunt Transport Services Inc. Old Dominion Freight Line Inc. Swift Transportation Company Knight Transportation Inc. Werner Enterprises Inc. Heartland Express, Inc. TransForce Inc. Saia, Inc. Marten Transport Ltd. ArcBest Corporation Covenant Transportation Group, Inc. Universal Truckload Services Inc. Celadon Group Inc. $78.05 64.81 17.96 25.20 26.91 18.78 15.97 26.15 16.71 20.07 22.18 15.85 9.05 $93.50 / $63.58 80.96 / 48.92 28.90 / 11.74 34.73 / 20.56 33.42 / 20.91 26.09 / 15.36 23.32 / 13.98 47.74 / 18.28 24.92 / 14.62 43.68 / 16.43 36.82 / 13.60 27.63 / 11.12 29.15 / 6.19 $8,802 5,482 2,454 2,039 1,937 1,580 1,559 653 547 521 400 450 252 $9,518 5,604 3,725 2,207 1,910 1,541 2,764 722 608 508 623 660 775 $6,188 2,972 4,229 1,183 2,094 736 2,904 1,221 665 2,667 724 1,129 1,026 $1,055 660 606 288 391 191 313 155 125 165 126 109 121 17.1% 22.2% 14.3% 24.4% 18.7% 25.9% 10.8% 12.7% 18.8% 6.2% 17.4% 9.6% 11.8% 7.2% 5.0% 1.8% 0.7% 2.1% (2.2%) 39.7% 0.1% 4.5% 2.9% (2.3%) 2.1% 8.2% 6.8% 7.7% 7.3% 2.2% 4.2% 12.6% 42.6% (1.5%) 11.8% 0.2% (1.7%) 1.2% 22.4% 1.54x 1.89x 0.88x 1.87x 0.91x 2.09x 0.95x 0.59x 0.91x 0.19x 0.86x 0.58x 0.76x 9.0x 8.5x 6.1x 7.7x 4.9x 8.1x 8.8x 4.7x 4.8x 3.1x 4.9x 6.1x 6.4x 1.43x 1.80x 0.87x 1.85x 0.89x 2.14x 0.68x 0.59x 0.87x 0.19x 0.88x 0.57x 0.70x 8.4x 7.9x 5.7x 7.5x 4.7x 7.2x 6.2x 4.7x 4.3x 3.1x 5.0x 6.0x 5.2x YRC Worldwide Inc. P.A.M. Transportation Services, Inc. USA Truck Inc. 8.43 28.44 15.72 21.37 / 6.67 67.61 / 22.13 32.14 / 11.58 275 202 151 1,179 274 250 4,832 417 508 259 62 56 5.4% 14.9% 11.0% (0.2%) NA (6.4%) 26.8% NA (2.8%) 0.24x 0.66x 0.49x 4.6x 4.4x 4.5x 0.24x NA 0.53x 3.6x NA 4.6x Average Median $2,054 $977 $2,094 $1,202 $293 $178 15.1% 14.6% 4.2% 2.1% 9.3% 6.8% 0.96x 0.87x 6.0x 5.5x 0.95x 0.87x 5.6x 5.2x Source: S&P Capital IQ Note: Not meaningful (NM) if EV/Sales is greater than 5x, or EV/EBITDA is greater than 30x. NA if denominator is 0, for percentages and multiples, or if estimates are not available.
NTM figures are based on the median estimate of Wall St. analysts. Transportation & Logistics 8 MOSS ADAMS CAPITAL LLC . Expedited & Air Expected to Outperform Over Next Twelve Months ($ millions, except where noted) 2/28/16 Company Name Share Price TTM Data 52 week High/Low Market Cap Enterprise Value Sales EBITDA NTM Est. Growth EBITDA Margin Sales EBITDA EV Multiple TTM Sales TTM EBITDA NTM Sales NTM EBITDA Railroads Union Pacific Corporation $80.00 $124.52 / $67.06 $67,713 $76,316 $21,813 $10,064 46.1% (3.9%) (1.6%) 3.50x 7.6x 3.64x 7.7x Canadian National Railway Company 58.26 65.40 / 49.16 45,948 53,530 9,089 4,630 50.9% 41.8% 45.7% 5.89x 11.6x 4.15x 7.9x Norfolk Southern Corporation 74.70 112.05 / 64.51 22,275 29,879 10,511 3,943 37.5% (4.0%) 2.2% 2.84x 7.6x 2.96x 7.4x 120.30 180.83 / 103.33 18,400 24,530 4,838 2,317 47.9% 40.0% 48.5% 5.07x 10.6x 3.62x 7.1x CSX Corp. 24.31 37.67 / 21.33 23,414 31,523 11,811 4,799 40.6% (5.3%) (3.9%) 2.67x 6.6x 2.82x 6.8x Kansas City Southern 83.93 120.63 / 62.20 9,106 10,795 2,419 1,098 45.4% (1.3%) 3.0% 4.46x 9.8x 4.52x 9.5x Genesee & Wyoming Inc. 57.12 105.49 / 41.56 3,295 5,351 2,000 571 28.5% 0.5% 3.5% 2.67x 9.4x 2.66x 9.1x Average Median $33,132 $29,879 $8,926 $9,089 $3,917 $3,943 42.4% 45.4% 9.7% (1.3%) 13.9% 3.0% 3.87x 3.50x 9.0x 9.4x 3.48x 3.62x 7.9x 7.7x Canadian Pacific Railway Limited Expedited and Air United Parcel Service, Inc. $97.44 $107.32 / $87.30 86,175 $93,888 $58,363 $9,747 16.7% 5.9% 7.1% 1.61x 9.6x 1.52x 9.0x FedEx Corporation 137.38 185.19 / 119.71 37,864 41,204 48,562 7,271 15.0% 4.5% 10.9% 0.85x 5.7x 0.81x 5.1x 36.88 59.47 / 31.99 909 2,293 1,823 390 21.4% 4.2% 2.5% 1.26x 5.9x 1.21x 5.7x Average Median $45,795 $41,204 $36,249 $48,562 $5,803 $7,271 17.7% 16.7% 4.9% 4.5% 6.8% 7.1% 1.24x 1.26x 7.1 x 5.9 x 1.18x 1.21x 6.6x 5.7x Atlas Air Worldwide Holdings, Inc. Source: S&P Capital IQ Note: Not meaningful (NM) if EV/Sales is greater than 5x, or EV/EBITDA is greater than 30x. NA if denominator is 0, for percentages and multiples, or if estimates are not available. NTM figures are based on the median estimate of Wall St.
analysts. Transportation & Logistics 9 MOSS ADAMS CAPITAL LLC . Logistics Companies’ Valuations Remain Bright Spot in T&L Sector ($ millions, except where noted) 2/28/16 Company Name Share Price TTM Data 52 week High/Low Market Cap Enterprise Value Sales EBITDA NTM Est. Growth EBITDA Margin Sales EBITDA EV Multiple TTM Sales TTM EBITDA NTM Sales NTM EBITDA Logistics Expeditors International of Washington Inc. $46.08 $51.80 / $40.41 $8,391 $7,573 $6,617 $767 11.6% (1.8%) (0.7%) 1.14x 9.9x 1.17x 9.9x CH Robinson Worldwide Inc. 70.35 76.18 / 59.71 10,076 10,568 13,476 925 6.9% 1.1% 5.3% 0.78x 11.4x 0.78x 10.8x Landstar System Inc. 60.24 73.60 / 53.03 2,555 2,543 3,322 271 8.1% (2.6%) (2.8%) 0.77x 9.4x 0.79x 9.7x Hub Group Inc. 37.14 44.00 / 28.19 1,324 1,185 3,526 154 4.4% 2.5% 5.6% 0.34x 7.7x 0.33x 7.3x XPO Logistics, Inc. 25.01 50.96 / 18.04 2,739 5,257 7,623 494 6.5% NM NM 0.69x 10.6x 0.34x 4.2x Forward Air Corp. 40.85 57.65 / 36.57 1,248 1,390 959 141 14.7% 7.5% 14.3% 1.45x 9.9x 1.35x 8.6x Roadrunner Transportation Systems, Inc. 11.99 28.51 / 6.39 459 817 1,995 130 6.5% 1.1% 9.4% 0.41x 6.3x 0.41x 5.7x Universal Truckload Services Inc. Echo Global Logistics, Inc. 15.85 25.39 27.63 / 11.12 34.35 / 16.56 450 786 596 872 1,129 1,512 109 45 9.6% 3.0% 2.1% 22.4% 1.2% 98.3% 0.53x 0.58x 5.5x 19.3x 0.52x 0.47x 5.4x 9.7x 3.18 8.00 / 2.95 155 195 724 21 2.9% 19.8% 49.2% 0.27x 9.2x 0.23x 6.2x Average Median $3,100 $1,287 $4,088 $2,659 $306 $147 7.4% 6.7% 5.8% 2.1% 20.0% 5.6% 0.70x 0.63x 9.9x 9.6x 0.64x 0.49x 7.8x 8.0x Radiant Logistics, Inc. Source: S&P Capital IQ Note: Not meaningful (NM) if EV/Sales is greater than 5x, or EV/EBITDA is greater than 30x. NA if denominator is 0, for percentages and multiples, or if estimates are not available. NTM figures are based on the median estimate of Wall St.
analysts. Transportation & Logistics 10 MOSS ADAMS CAPITAL LLC . Middle Market M&A Volume Declines in Q4 after Historic Q1 - Q3  Overall, 2015 was a record year for M&A with transaction values totaling $4.7 trillion, according to Thomson Reuters  EBITDA multiples in middle market transactions in Q4 2015 finished the quarter at 8.3x EBITDA, equal to the 5 year average for this metric and up from Q2 and Q3 2015  In Q4 2015, U.S. middle market M&A deal volumes declined 15% from Q3 2015, and declined 26% from Q4 2015  Q4 2015 EBITDA margins of reportable transactions increased modestly but remained consistent with the 5 year average --- Reported EBTIDA margins in Q4 2015 were 9%, while the 5 year average is 8%  U.S. middle market M&A activity in Q4 2015, measured by deal values, remained consistent with prior quarters at $94 billion U.S. MIDDLE MARKET M&A 1 U.S.
MIDDLE MARKET M&A VALUATIONS 2 1) Middle market M&A includes transactions with undisclosed values, and disclosed values where EV < $500 million. 2) Middle market M&A includes transactions with disclosed EBITDA, where EV < $500 million and EV/EBITDA between 3.0x and 15.0x. Note: transactions with disclosed EBITDA represent <5% of all transactions. Source: CapitalIQ. Transportation & Logistics 11 MOSS ADAMS CAPITAL LLC . T&L Deal Volume Lower Amid Numerous $1+ Billion Transactions  Modest sales growth is expected across transportation & logistics sectors as world trade growth is expected to remain subdued in 2016  M&A deal activity in the T&L market experienced the fourth straight year of declines  Railroads continue to lag the overall market as favorable fuel prices result in alternative forms of transportation  While deal counts have been trending lower in recent years, 2015 M&A activity was underscored by multiple transactions valued at greater than $1 billion in enterprise value NEXT 12 MONTHS: ESTIMATED GROWTH GLOBAL TRANSPORTATION & LOGISTICS M&A ACTIVITY 1 12.0% 300 10.0% 265 8.0% S&P 500 6.5% 6.0% Expedited and Air 4.5% 4.0% 2.0% Trucking Logistics 2.1% S&P 500 2.1% 1.7% 0.0% 250 Expedited and Air 7.1% Trucking 6.8% 285 277 254 243 226 218 193 188 200 Logistics 5.6% 153 150 Railroads 3.0% 100 50 Railroads (1.3%) 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 -2.0% Sales Growth 1) EBITDA Growth Global T&L M&A activity revised to include only control, closed transactions, as well as transactions with undisclosed values Note: The Freight Transportation and Logistics indices are composed of the public companies in the valuation section; estimated growth is based on the median estimates of Wall Street analysts Source: S&P Capital IQ Transportation & Logistics 12 MOSS ADAMS CAPITAL LLC . Select, Recent Transportation & Logistics M&A Activity ($ millions, except multiples) Implied Enterprise Value - Close Date Acquirer / Investor Target Target Description EV / Revenue EV / EBITDA Pending Worldwide Flight Services, Inc. Consolidated Aviation Services LLC Provides cargo handling services throughout the United States and South America Pending FedEx Corporation (NYSE:FDX) TNT Express N.V. (ENXTAM:TNTE) Provides express delivery services to businesses and consumers worldwide $4,971 0.60x 9.4x 2/18/2016 CitySprint (UK) Limited Dunedin LLP Provides courier and logistics services $115 0.55x 4.8x 1/22/2016 DSV A/S (CPSE:DSV) UTi Worldwide Inc. Non-asset-based supply chain services and solutions company $1,547 0.30x 11.2x 1/14/2016 Heniff Transportation Systems EZ Alternative Transport Provides bulk chemical hauling services - - - 1/12/2016 Pitney Bowes Inc. Enroute Systems Corporation Provides SaaS transportation management systems - - - 12/1/2015 ABF Logistics II, Inc. Bear Transportation Services, LP Provides transportation, logistics, and supply chain management services $26 11/3/2015 Geodis S. A. Ozburn-Hessey Logistics, LLC Provides third party logistics services $800 11/2/2015 Bluefin Investments Limited IN tIME Express Logistik GmbH Business-to-business direct and express shipments company $169 1.10x 8.7x 10/28/2015 XPO Logistics, Inc. (NYSE:XPO) Con-way Inc. Provides transportation, logistics, and supply chain management services $3,057 0.53x 6.2x 9/17/2015 Span-Alaska Transportation, Inc. Pacific Alaska Freightways, Inc. Provides freight transportation services to businesses and consumers in Alaska - - - 9/17/2015 Transplace Inc. M33 Integrated Solutions, Inc. Provides logistics, supply chain, and transportation management services - - - 8/27/2015 Magnate Worldwide, LLC TrumpCard Inc. Specializes in the transportation of domestic heavyweight air and expedited LTL freight - - - 8/24/2015 Levine Leichtman Capital Partners Regional Rail, LLC Operates shortlines, regional railroads, and switching services in the eastern U.S. - - - 8/18/2015 United Parcel Service, Inc.
(NYSE:UPS) Coyote Logistics, LLC Provides third-party transportation and logistics services 8/18/2015 Apax Partners LLP Quality Distribution Inc. Transports bulk chemicals 8/10/2015 Daseke, Inc. Hornady Transportation LLC Provides flatbed carrier trucking services - - - 8/4/2015 Dicom Transportation Group, L.P. Courier Express Enterprises LLC Provides last mile delivery services - - - - 0.22x - - 10.0x $1,800 0.86x - $777 0.79x 11.3x Source: S&P Capital IQ, company filings, news releases, Moss Adams Capital. Transportation & Logistics 13 MOSS ADAMS CAPITAL LLC . Select, Recent Transportation & Logistics M&A Activity ($ millions, except multiples) Close Date Acquirer / Investor Target 8/4/2015 Kuehne + Nagel International AG (SWX:KNIN) ReTrans, Inc. Provides logistics management and multimodal shipping services 7/31/2015 Teekay Tankers Ltd. (NYSE:TNK) SPT Inc. 7/28/2015 Roadrunner Transportation Systems, Inc. (NYSE:RRTS) 7/27/2015 Implied Enterprise Value Target Description EV / Revenue EV / EBITDA - - - Provides ship to ship cargo transfer services $44 - - Stagecoach Cartage and Distribution, LP. Provides a broad range of transportation and warehousing services $40 1.18x 5.7x CAI International Inc. (NYSE:CAI) ClearPointt, LLC Offers intermodal, LTL, and overdimensional shipment services $4 0.13x - 7/21/2015 Dicom Transportation Group, L.P. EXTRA Express Cerritos, Inc. Offers logistics, transportation, distribution, and warehousing services - - - 7/1/2015 Daseke, Inc. Bulldog Hiway Express Provides truck load and intermodal carrier services - - - 6/15/2015 UPS Capital Corporation Parcel Pro Inc. Provides insured shipping and logistics services - - - 6/12/2015 Capstone Logistics, LLC Pinnacle Workforce Logistics, LLC Provides workforce logistics services - - - 6/9/2015 Radiant Logistics, Inc. (AMEX:RLGT) Highways & Skyways, Inc. Logistics management company - - - 6/8/2015 Radiant Logistics, Inc.
(AMEX:RLGT) Service By Air, Inc. Provides air freight shipping, global logistics, and international freight services 6/8/2015 XPO Logistics, Inc. (NYSE:XPO) Norbert Dentressangle S.A. (ENXTPA:XPO) Provides transport, logistics, and air and sea freight forwarding services 6/1/2015 XPO Logistics, Inc.
(NYSE:XPO) Bridge Terminal Transport Inc. 6/1/2015 Echo Global Logistics, Inc. (NasdaqGS:ECHO) 6/1/2015 $12 0.09x - $3,010 0.70x 10.5x Offers marine container transportation services $100 0.43x 8.1x Command Transportation, LLC Provides freight brokerage services for Fortune 500 and other clients $411 0.73x 11.1x TAGG Logistics, LLC ABC Fulfillment, LLC Offers logistics and fulfillment services - 5/29/2015 Kintetsu World Express, Inc. (TSE:9375) APL Logistics Ltd Provides supply chain solutions $1,200 0.70x 15.0x 5/28/2015 Japan Post Bank Co., Ltd. (TSE:7182) Toll Holdings Limited Provides integrated logistics services $6,922 0.90x 11.9x 5/8/2015 American Fast Freight, Inc. Caribbean Shipping Services, Inc. Provides refrigerated freight forwarding services in the Puerto Rico market - - - 5/8/2015 Penske Logistics, Inc. Transfreight North America Provides third-party logistics services - - - - - Source: S&P Capital IQ, company filings, news releases, Moss Adams Capital. Transportation & Logistics 14 MOSS ADAMS CAPITAL LLC .
Select, Recent Transportation & Logistics M&A Activity ($ millions, except multiples) Implied Enterprise Value Close Date Acquirer / Investor Target Target Description EV / Revenue EV / EBITDA 4/9/2015 TBX Group, Inc. Logistics IQ LLC Provides a broad range of transportation services 3/25/2015 Genesee & Wyoming Inc. (NYSE:GWR) Freightliner Group Limited Provides rail freight services for blue-chip organizations $761 1.10x - 3/9/2015 Forward Air, Inc. CLP Towne Inc. Offers time-sensitive, LTL shipments for air freight and commercial companies $125 - - 2/9/2015 XPO Last Mile, Inc. UX Specialized Logistics Provides a broad range of transportation services $59 0.52x 7.2x 2/5/2015 Echo Global Logistics, Inc. (NasdaqGS:ECHO) Xpress Solutions, Inc. Offers truckload, LTL, refrigerated, expedited, ocean, intermodal, and air $9 0.71x - 2/2/2015 Saia, Inc. (NasdaqGS:SAIA) Linkex, Inc. Provides logistics and transport management services $25 0.69x - 1/30/2015 FedEx Corporation (NYSE:FDX) GENCO Distribution Systems, Inc. Third-party reverse logistics company $1,380 0.90x 9.8x 1/20/2015 Celadon Group Inc. (NYSE:CGI) Taylor Express, Inc. Truckload commodity carrier $43 1.13x - 1/2/2015 ABF Logistics II, Inc. Smart Lines, LLC Transportation brokerage company $5 0.29x - 1/1/2015 C.H.
Robinson Company, Inc. Freightquote.com, Inc. Transportation brokerage company $365 0.59x 10.7x Mean $1,029 0.66x 9.5x Median $169 0.70x 9.9x - - - Source: S&P Capital IQ, company filings, news releases, Moss Adams Capital. Transportation & Logistics 15 MOSS ADAMS CAPITAL LLC . Overview of Select Notable Transactions UNITED PARCEL SERVICE, INC.’S ACQUISITION OF COYOTE LOGISTICS, LLC – AUGUST 2015  UPS is a package delivery company and provides transportation, logistics, and financial services  In August 2015, UPS acquired Coyote Logistics for approximately $1.8 billion from private equity fund Warburg Pincus LLC  The transaction positions UPS with a leading platform in a high-growth adjacent industry that is complementary to its Supply Chain & Freight solutions capabilities  Furthermore, significant synergy potential in asset utilization and scale efficiency in the amount of $100 million - $150 million  “The brokered full-truckload freight segment is a high growth market and we expect it will continue to outpace other transportation segments…this high quality acquisition significantly increases UPS full-truckload scale and we are uniquely positioned to take advantage of exciting new revenue growth and synergy opportunities.”” -- David Abney, Chief Executive Officer, UPS  Coyote Logistics, LLC provides third-party transportation and logistics services for the consultative, executional, and transactional supply chain needs of Fortune 100 companies and small businesses in the United States, Mexico, and Canada APAX PARTNERS LLP’S ACQUISITION OF QUALITY DISTRIBUTION INC. – AUGUST 2015  Apax Partners is a private equity investment group that operates globally and has more than 30 years of investing experience. Apax Partners has advised funds that total over $40 billion around the world in aggregate. These funds provide long-term equity financing to build and strengthen world-class companies  In August 2015, Apax Partners acquired Quality Distribution for approximately $777 million, representing an approximately 0.79x revenue and 11.3x EBITDA multiple  The transaction price represents a premium of approximately 63% over Quality Distribution’s closing share price on May 6, 2015  “Having followed Quality for several years, we are impressed with the strategy and vision articulated by the management team…as the leading logistics platform in the bulk chemical transportation industry, Quality is well positioned to take advantage of both organic growth opportunities and strategic acquisitions while benefiting from the financial and operational flexibility of operating as a private company.
We look forward to partnering with Quality’s management team as they pursue the Company’s next phase of growth” -- Ashish Karandikar, Partner, Apax Partners  Quality Distribution operates the largest chemical bulk logistics network in North America and is the largest North American provider of intermodal tank container and depot services Source: S&P Capital IQ, company filings, news releases, Moss Adams Capital. Transportation & Logistics 16 MOSS ADAMS CAPITAL LLC . Moss Adams at a Glance: Leadership through Experience and Results Moss Adams Capital LLC Moss Adams LLP • • 100+ years old – Founded in 1913 • Largest accounting firm headquartered in the western U.S. • 2,400 employees in 28 locations • Fully integrated accounting, tax, and business advisory firm • Middle-market specialists • The Moss Adams Advantage: Discrete, highly leverageable transaction resources and services Full-service investment banking and strategic advisor services • Dedicated industry specialists • Focus on privately owned and family-held companies • Mergers and acquisitions • Private debt & equity placements • Mezzanine capital • Due Diligence preparation & advisory International Presence • Transportation & Logistics Major market affiliates throughout the U.S. and more than 100 countries around world 17 MOSS ADAMS CAPITAL LLC . Expert Teams INDUSTRY KNOWLEDGE MATCHED WITH AN EXPERIENCED TEAM • Senior Level Attention • Commitment to our Clients • Professional Excellence • Objective & Independent Advice • Creating Value for Owners • Global Presence & Capabilities Premier accounting and financial services advice for middle market transportation and logistics companies. Transportation & Logistics 18 MOSS ADAMS CAPITAL LLC . Moss Adams Capital Overview Full Service Middle Market Investment Bank Corporate Finance Comprehensive Industry Coverage  Capital Placement – Equity and Debt Aerospace, Defense & Government Services Food, Beverage & Agriculture Healthcare Services & Products Infrastructure & Construction Paper, Plastics, & Packaging Real Estate, Lodging & Leisure  Exclusive sales and divestitures Business & Marketing Services Industrials / Niche Manufacturing  Strategic alternatives assessment Automotive & Dealer Services Consumer, Retail & Apparel  Merger and acquisition advisory Technology, Communications, & Media Transportation & Logistics  Strategic planning  Management buy-outs  Recapitalizations  Fairness opinions  Restructuring and special situations advisory Highlights and Accomplishments  Completed over 250 transactions  Access to key decision-makers among institutional investor universe  Coverage of relevant strategic partners  Average of 20 years of investment banking experience among senior leaders Transportation & Logistics 19 MOSS ADAMS CAPITAL LLC . Global Reach Moss Adams is a founding member of Praxity, AISBL, a global alliance of independent accounting firms. In addition to its deep, direct international relationships, Praxity provides access and trusted advisory expertise worldwide Europe Austria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, Jersey, Latvia, Lithuania, Luxembourg, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Spain, Sweden, Switzerland, Turkey, United Kingdom , Ukraine North America United States, Canada Asia China, Indonesia, Japan, South Korea, Malaysia, Singapore, Taiwan, Thailand, Vietnam Middle East and Indian Subcontinent Latin America and Caribbean Argentina, Brazil, Cayman islands, Chile, Colombia, Mexico, Puerto Rico, Uruguay, Venezuela Transportation & Logistics India, Israel, Lebanon, Pakistan, United Arab Emirates Africa Algeria, Angola, Benin, Botswana, Cameroon, Cape Verde, Djibouti, Egypt, Ghana, Ivory Coast, Lesotho, Madagascar, Mauritius, Morocco, Senegal, South Africa, Tunisia, Zambia 20 Australasia Australia, New Zealand MOSS ADAMS CAPITAL LLC . Global M&A Reach Through Local Relationships Local, National and Global Reach Our affiliation with CFxB consists of 150+ Corporate Finance Professionals across the U.S. and in over 25 countries more than 25 countries Mazars Europe 140 offices Mazars M&A 20 offices MNP Corporate Finance 10 offices MNP LLP 70 offices Mazars Asia 25 offices Moss Adams Capital 3 offices Moss Adams LLP 28 offices Weiser Mazars 6 offices William Buck CAA 6 offices Mazars Middle East 15 offices BKD Corporate Finance 4 offices BKD LLP 33 offices Mazars South America 20 offices Transportation & Logistics Mazars Africa 40 offices 21 MOSS ADAMS CAPITAL LLC . Contact Us Moss Adams Capital LLC 2040 Main Street Suite 900 Irvine, CA 92614 999 Third Avenue Suite 2800 Seattle, WA 98104 Richard Anderson Managing Director (949) 221-4006 rich.anderson@mossadams.com Tyler Dale Vice President (949) 221-4030 tyler.dale@mossadams.com Andrew Suen Vice President (949) 517-9428 andrew.suen@mossadams.com Wiley Kitchell Managing Director (206) 302-6780 wiley.kitchell@mossadams.com Robert Miranda Vice President (949) 221-4021 robert.miranda@mossadams.com Bradley Erhart Associate (949) 517-9452 bradley.erhart@mossadams.com Harman Wales Managing Director (206) 302-6770 jet.wales@mossadams.com James Rothenberger Vice President (206) 302-6777 james.rothenberger@mossadams.com James Parr Analyst (949) 221- 4099 james.parr@mossadams.com Brandon Clewett Director (949) 517-9426 brandon.clewett@mossadams.com Scott Porter Vice President (206) 306-6326 scott.porter@mossadams.com Daniel Seubert Analyst (206) 302-6775 daniel.seubert@mossadams.com Transportation & Logistics 22 MOSS ADAMS CAPITAL LLC .
