Transportation & Logistics

Transportation & Logistics Strategic Market Insights – Q3 2017 Report Transportation & Logistics G2 Insights – Sector Summary The Transportation & Logistics industry continues to evolve to meet the growing demands of the persisting e-commerce boom. Below are G2’s insights and observations:

The Transportation & Logistics industry continues to evolve around e-commerce and fulfillment needs of consumer demand. As the expected fulfillment timeframe of products shortens with Amazon’s aggressive hourly deliveries, industry players are looking to decrease operational costs and increase overall efficiencies to compete. Industry consolidation and strategic M&A activity has picked up, particularly within the final mile and freight forwarding segments. Additionally, new technology within the Trucking subsector, such as virtual reality and vehicle to vehicle software, has emerged to augment or replace traditional means of training and fleet management. Larger industry players like UPS, have taken the lead in technological improvement, implementing virtual reality and route optimization software. The industry can expect such technological advancements to be commercially available over the next few quarters.

Sector Summary The total T&L M&A transaction volume through the third quarter of 2017 has seen a dip in volume but deal value remains consistent. High competition from both strategic and financial acquirers in conjunction with a supportive financing environment has led valuations to remain strong, particularly in the middle market. The current atmosphere has formed a “seller’s market” with vast amounts of capital chasing a limited amount of desirable acquisition targets. The summary table below references select public companies identified for each of the industry’s key segments: Logistics, Marine, Rail Services, and Trucking. Public valuations range from ~8x EBITDA for Trucking companies to ~12x EBITDA for Logistics providers. The Marine sector lags behind at ~8x EBITDA with YoY decreases in profitability and revenues. FY 20171 LTM2 Number of Median Median Median EV / EV / Sector Selected Enterprise Value Revenue EBITDA Revenue EBITDA Companies (MM) Growth Growth Logistics 19 4,060 7.9% 13.6% 1.0x 11.4x

Marine 17 3,104 -1.6% -12.8% 1.4x 9.3x

Rail Services 11 14,201 4.5% 6.3% 1.8x 9.3x

Trucking 18 1,173 4.3% 1.4% 1.0x 7.5x

1 Compared with values at September 30, 2016 Sector Summary in Millions USD (converted where necessary) 2 LTM Multiples as of September 30, 2017 Data sourced from S&P Capital IQ on September 30, 2017

www.g2cap.com 2 Transportation & Logistics G2 Insights – Emerging Industry Trends Companies continue to shift operational focus to take advantage of technology enablement and become increasingly lean, efficient, flexible, and accurate. . Final Mile Delivery – Amazon’s acquisition of Whole Foods will push other retailers to accelerate the development and rollout of their final mile delivery and omni-channel fulfillment services. Whole Foods’ hundreds of locations enable Amazon to extend its same-day and hourly (within one or two hours) fulfillment capabilities into the Grocery and Fresh Foods industry. Competitors, such as Stop & Shop’s Peapod delivery, will feel increasingly pressured to speed up their delivery times to compete. Signs of consolidation and acquisition strategies within the sector have begun as Walmart, acquired last-mile delivery startup, Parcel Inc., on October 22 to better serve customer demand for fresh groceries, accounting for 56% of annual revenues. On August 14, retailer giant Target acquired the transportation technology company, Grand Junction to augment its next-day delivery pilot program set to take place in New York’s Tribeca neighborhood next year. . Route Optimization – A growing number of companies are investing in the development of sophisticated route optimization software and technology. Route optimization software instantly aggregates and analyzes a wide range of both historical and real-time traffic, weather, route pick- up, and drop-off data. By setting parameters to optimize both speed, efficiency, and even mileage, the driver can both efficiently fulfill delivery demands and reduce operational costs. UPS recently finished its pilot test of its ORION United States route optimization algorithms and is currently working to implement and roll out its software to other international markets. . Virtual Reality for Driver Training – The Virtual Reality trend has transcended traditional video game and entertainment purposes and entered the transportation and logistics space. In August, UPS announced that it would start using virtual reality (VR) technology to train drivers to better identify and spot road hazards throughout their delivery routes. According to UPS, this new VR training module allows drivers to simulate the real experience of driving in urban settings, and as a result, better protect its on-road employees and the general public. UPS has incorporated this VR training to nine UPS Integrad training facilities in the U.S. and Europe since September. . Drone Delivery in E-Commerce – The personal and commercial drone market is expected to report revenues of at least $6 billion in 2017 and is expected to hit $11 billion by 2020. Though majorly publicized by Amazon’s pilot launch in December of 2016, over 20 drone delivery-related companies have emerged over recent years. Retailers are eager to embrace the out-of-the-box delivery medium as a recent study revealed 42% of manufacturers and retailers are in favor of integrating logistics services with driverless vehicles.

Figure 1 – A UPS driver in the Integrad program using its new virtual reality training system for on- the-road readiness. Source: Transportation Topics, SupplyChainDive, SupplyChain24/7. CEI.org, Truckinginfo.com

www.g2cap.com 3 Transportation & Logistics G2 Insights – Emerging Industry Trends (continued)

. Truck Platooning – The emergence of truck platooning software, developed by companies like Peloton Technology, allows multiple trucks to autonomously travel in convoys for enhanced fuel efficiency. Through direct Vehicle to Vehicle (V2V) communications, platooning trucks accelerate and brake together, reducing overall wind resistance. This in turn boosts the truck’s fuel efficiency, reducing the primary costs for trucking fleets. As the convoy’s lead truck alternates in its position throughout the haul, fuel efficiency can be distributed throughout the fleet. Once this technology is fully commercialized to reach the market, the cost-advantage will draw significant demand from truck operators. Peloton plans to release a limited number of commercial platooning software licenses at the end of 2017, with a full product launch in 2018. . Hydrogen Fuel-Cell Trucks – This fall, Toyota announced its initial testing of its Project Portal Class 8 hydrogen fuel-cell trucks for drayage duty-cycle capabilities. Toyota unveiled its plan to build a hydrogen fuel-cell truck that generated more than 670 horsepower with a 12kWh battery last April. Hydrogen fuel-cell energy uses compressed hydrogen as a fuel source and releases water vapor as an emission. Development of the technology spans over the last decade but has not taken off due to severe shortages of fueling stations. However, experts predict commercial trucks will benefit more from hydrogen in the future thanks to easy access to convenient industrial fueling stations at warehouses or ports. . Laws Regulating Self-Driving on the Horizon – The American Vision for Safer Transportation Through Advancement of Revolutionary Technologies Act and SELF DRIVE Act both advanced in the Senate and House with bipartisan support. Both bills permit manufacturers to apply for exemptions to federal vehicle safety standards in order to sell self-driving vehicles that may lack conventional equipment, such as steering wheels and pedals. Both bills, however, maintain the status quo for commercial trucks and buses, as labor unions, including the International Brotherhood of Teamsters, lobbied hard to keep them out of self-driving bills. The main concern over the application of driverless technology in commercial trucks is the potential threat to jobs in the Transportation & Logistics Industry. It is estimated that up to three million commercial trucking jobs could be at risk if self-driving vehicles replace human drivers.

Figure 2 – A Peloton Technology screenshot portraying the fuel efficiency gained from reducing track by platooning throughout trucking fleets.

Source: Transportation Topics, SupplyChainDive, SupplyChain24/7. CEI.org, Truckinginfo.com

www.g2cap.com 4 Transportation & Logistics Selected Industry Deals Q3 2017 Several notable transactions have already been completed or announced in the Transportation & Logistics industry through Q3 2017. G2 has outlined select transactions below, followed by a more comprehensive list on the following tables.

. Odyssey Logistics & Technology Corporation to acquire The Jordan Company (Pending) – Announced on 8/30/2017, The Jordan Company has signed a definitive agreement to become a new majority shareholder in Odyssey Logistics & Technology Corporation, a global logistics solutions provider with intermodal, trucking, and managed services. Terms of the deal were not disclosed. In addition to its pending investment of Odyssey, The Jordan Company, a private equity firm with capital commitments exceeding $8B, owns American Fast Fright, an ocean freight forwarder, and Quick, a mission-critical logistics firm.

. J.B. Hunt Transportation (Nasdaq:JBH) to acquire Special Dispatch of San Antonio and Special Logistics Dedicated (Pending) – J.B. Hunt, trucking and intermodal logistics provider, announced its acquisition of Special Logistics Dedicated and Special Dispatch of San Antonio, providers of dedicated sites, cross-docking and contract logistics, LTL, and dry van services. J.B. Hunt referenced the acquisition as an opportunity to improve its final mile and e-commerce fulfillment and delivery capabilities. The transaction value is expected to be $136MM.

. United Road Services acquired by The Carlyle Group (September 2017) – United Road Services, a provider of vehicle transportation and logistics in North America, was acquired by global asset manager, The Carlyle Group from private equity group Charlesbank Capital Partners. The Carlyle Group cited United Road’s strong growth over recent years as an important motive behind the acquisition. Terms of the deal were not disclosed.

. Celadon Group’s (NYSE:CGI) Flatbed Trucking Division acquired by PS Logistics (September 2017) – Celadon Group Inc. (NYSE:CGI) divested its Flatbed Trucking Division to PS Logistics, a flatbed/heavy specialized logistics service provider. Celadon’s Flatbed Trucking Division generated about $20MM in revenues in 2016 while PS Logistics logged approximately $495MM in revenues in its flatbed/heavy operations. Though the terms of the transaction were not disclosed, it marks an important point of industry consolidation within the flatbed subsector and a shift in strategy for Celadon Group.

. Milgram & Company acquired by C.H. Robinson Worldwide (August 2017) – C.H. Robinson, a leading global third party logistics provider acquired Milgram & Company, a provider of freight forwarding, customs brokerage, and surface transportation in Canada, on Aug. 31 for $62MM CAD (~$50MM USD). Milgram posted approximately $124MM USD in revenues in 05/31/2017. The acquisition allows C.H. Robinson to expand its North American presence by securing a Canadian- based forwarder as well as provide expertise and additional resources for Milgram’s future growth.

. United Global Logistics acquired by RoadOne IntermodaLogistics (August 2017) – RoadOne IntermodaLogistics, an intermodal, distribution, and logistics service company acquired United Global Logistics, a Chicago-based intermodal transportation company. With this acquisition RoadOne is able to expand its capacity, improve its customer service, integrate and augment existing technology, and acquire new service offerings.

Source: Transportation Topics, S&P Capital IQ

www.g2cap.com 5 Transportation & Logistics Recent Select Deal Activity – Pending & Closed Logistics

Date Closed Target Acquirer / Investor Pending Odyssey Logistics & Technology Corporation The Jordan Company, L.P. Special Dispatch of San Antonio, Inc. and Special Pending J.B. Hunt Transport Services, Inc. Logistics Dedicated, LLC Sep-17 Sandifer-Valley Transportation and Logistics, Ltd. Radiant Logistics, Inc. The Carlyle Group L.P.; Carlyle US Equity Opportunity Fund Sep-17 United Road Services, Inc. II, L.P Sep-17 Unitrans, Inc. Quick International Courier, Inc. Aug-17 MacroPoint LLC The Descartes Systems Group Inc. Aug-17 United Global Logistics Inc. RoadOne, Inc. Aug-17 Professional Freight Solutions, Inc. Aerostar Global Logistics, Inc. Jul-17 IDEAL Logistic Inc. Transport Guilbault Inc Jul-17 Grand Worldwide Logistics Corporation American Fast Freight, Inc.

Marine Date Closed Target Acquirer / Investor Sep-17 Euromar LLC Euroseas Ltd. Aug-17 Gardline Shipping Limited Royal Boskalis Westminster N.V.

Aug-17 Marenave Schiffahrts AG Ernst Russ AG

Aug-17 Astarte International Inc. Top Ships Inc.

Trucking

Date Closed Target Acquirer / Investor Celadon Group, Inc., Substantially All Assets of Sep-17 PS Logistics LLC Flatbed Trucking Division Penske Automotive Group, Inc.; MBK USA Commercial Sep-17 Penske Truck Leasing Co., L.P. Vehicles Inc. Sep-17 Garrett Bros., Inc. Tenaris S.A. R & R Trucking, Inc. and TNI USA Inc. and NEI Sep-17 Daseke, Inc. Transport LLC Sep-17 RDK Transportation Co. Inc. Mullen Group Ltd. Aug-17 Milgram & Company Ltd. C.H. Robinson Worldwide, Inc. Aug-17 Stella Environmental Services, LLC Hidden Harbor Capital Partners, LLC Jul-17 R.E.M Transport Ltd. Jardine Transport Ltd. Jul-17 Interstate Distributor Co., Inc. Heartland Express, Inc.

Jul-17 Steelman Transportation, Inc. and Group One Inc. Daseke, Inc.

Rail Services Date Closed Target Acquirer / Investor Pending Nuovo Trasporto Viaggiatori SpA Undisclosed Aug-17 Locomore GmbH & Co. KG LEO Express a.s. Aug-17 Trans Eurasia Logistics GmbH DB Cargo AG

Sector Summary in Millions USD (converted where necessary) Data sourced from S&P Capital IQ on September 30, 2017

www.g2cap.com 6 Transportation & Logistics Public Trading Metrics – Logistics

Enterprise Market LTM LTM EBITDA LT Debt / EV / LTM EV / LTM Industry Cash LT Debt Value Cap Revenue EBITDA Margin EBITDA Revenue EBITDA

Mean 18,095 15,759 698 14,583 1,527 8.2% 3,120 2.2x 1.0x 11.4x Median 4,060 4,086 260 4,249 379 8.1% 811 1.8x 1.0x 10.0x Size (Millions USD) Leverage Valuation EBITDA Company Ticker Enterprise Market LTM LTM Margin LT Debt / EV / LTM EV / LTM Cash LT Debt Value Cap Revenue EBITDA EBITDA Revenue EBITDA Agility Public Warehousing Company KWSE:AGLTY 4,551 4,086 263 4,249 366 8.6% 285 0.8x 1.1x 12.4x K.S.C.P. Air Transport Services NasdaqGS:ATSG 1,905 1,439 63 906 223 24.6% 508 2.3x 2.1x 8.5x Group, Inc. Atlas Air Worldwide NasdaqGS:AAWW 3,529 1,662 272 1,971 396 20.1% 1,950 4.9x 1.8x 8.9x Holdings, Inc. Deutsche Post AG XTRA:DPW 58,800 53,825 1,886 67,863 5,137 7.6% 5,195 1.0x 0.9x 11.4x

DSV A/S CPSE:DSV 15,100 14,061 279 11,043 768 7.0% 1,114 1.4x 1.4x 19.7x Echo Global Logistics, NasdaqGS:ECHO 725 538 20 1,753 32 1.8% 207 6.5x 0.4x NM Inc. Expeditors International NasdaqGS:EXPD 9,707 10,819 1,115 6,422 702 10.9% NA NA 1.5x 13.8x of Washington, Inc. FedEx Corporation NYSE:FDX 72,142 60,489 3,503 60,953 8,252 13.5% 15,137 1.8x 1.2x 8.7x

Forward Air Corporation NasdaqGS:FWRD 1,745 1,734 10 1,029 144 14.0% 21 0.1x 1.7x 12.1x

Hub Group, Inc. NasdaqGS:HUBG 1,480 1,466 152 3,729 147 3.9% 106 0.7x 0.4x 10.1x Kuehne + Nagel SWX:KNIN 21,784 22,121 529 17,946 1,120 6.2% NA NA 1.2x 19.5x International AG Landstar System, Inc. NasdaqGS:LSTR 4,060 4,180 222 3,334 272 8.1% NA NA 1.2x 14.9x Panalpina World SWX:PWTN 3,230 3,477 260 5,461 119 2.2% 1 0.0x 0.6x NM Transport (Holding) Ltd. Radiant Logistics, Inc. AMEX:RLGT 295 261 6 778 29 3.7% 37 1.3x 0.4x 10.4x

Ryder System, Inc. NYSE:R 9,809 4,480 55 6,995 1,816 26.0% 4,796 2.6x 1.4x 5.4x

TFI International Inc. TSX:TFII 3,660 2,312 0 3,476 379 10.9% 1,246 3.3x 1.1x 9.7x United Parcel Service, NYSE:UPS 117,419 103,901 3,544 62,924 7,847 12.5% 14,281 1.8x 1.9x 15.0x Inc. Universal Logistics NasdaqGS:ULH 816 582 2 1,125 72 6.4% 214 3.0x 0.7x 11.3x Holdings, Inc. XPO Logistics, Inc. NYSE:XPO 13,040 7,986 291 14,690 1,196 8.1% 4,816 4.0x 0.9x 10.9x 2.5x 14.0x S&P 500 11.4x 11.4x 12.0x 10.6x 11.0x 2.0x 9.8x 10.8x S&P 500 10.0x 8.5x 9.1x 10.2x 8.7x 1.5x 8.0x 7.0x 1.0x 1.0x 1.0x 1.0x 0.9x 6.0x 1.0x 0.9x 0.8x 0.8x 0.8x 0.8x 0.6x EV EV / EBITDA 4.0x 0.5x

2.0x EV EV / TOTAL REVENUE 0.0x 0.0x

Sector Summary in Millions USD (converted where necessary) Charts show average daily multiples for each year Data sourced from S&P Capital IQ on September 30, 2017

www.g2cap.com 7 Transportation & Logistics Public Trading Metrics – Marine

Enterprise Market LTM LTM EBITDA LT Debt / EV / LTM EV / LTM Industry Cash LT Debt Value Cap Revenue EBITDA Margin EBITDA Revenue EBITDA

Mean 6,608 3,871 652 4,892 721 21.5% 2,738 5.8x 1.4x 9.3x Median 3,104 1,215 214 937 250 19.0% 808 4.9x 1.2x 9.0x Size (Millions USD) Leverage Valuation EBITDA Company Ticker Enterprise Market LTM LTM LT Debt / EV / LTM EV / LTM Cash Margin LT Debt Value Cap Revenue EBITDA EBITDA Revenue EBITDA Aegean Marine Petroleum NYSE:ANW 979 201 82 5,301 107 2.0% 507 4.8x 0.2x 9.2x Network Inc. A.P. Møller - CPSE:MAERSK 51,999 38,729 3,644 36,631 7,155 19.5% 13,443 1.9x 1.4x 7.3x Mærsk A/S B COSCO Shipping Specialized SHSE:600428 3,104 2,162 NM 937 154 16.4% 862 5.6x 3.3x NM Carriers Co., Ltd. Costamare Inc. NYSE:CMRE 1,797 661 195 439 280 63.8% 754 2.7x 4.1x 6.4x Diana Shipping NYSE:DSX 977 385 42 124 NM -0.3% 634 NM NM NM Inc. Evergreen Marine Corporation TSEC:2603 4,369 2,025 1,218 4,528 241 5.3% 2,501 10.4x 1.0x NM (Taiwan) Ltd Hapag-Lloyd DB:HLAG 14,697 6,917 860 9,660 820 8.5% 7,295 8.9x 1.5x NM Aktiengesellschaft Kirby Corporation NYSE:KEX 4,155 3,562 NM 1,835 405 22.1% 592 1.5x 2.3x 10.2x

Matson, Inc. NYSE:MATX 1,954 1,215 15 2,007 226 11.2% 723 3.2x 1.0x 8.7x Nippon Yusen TSE:9101 11,247 3,503 1,356 17,580 762 4.3% 7,562 9.9x 0.6x NM Kabushiki Kaisha Nordic American NYSE:NAT 954 545 34 313 90 28.6% 444 4.9x 3.0x 10.6x Tankers Limited Overseas Shipholding NYSE:OSG 501 197 205 433 125 28.9% 422 3.4x 1.2x 4.0x Group, Inc. Rand Logistics, NasdaqCM:RL 247 6 NM 114 22 19.0% NA NA 2.2x 11.4x Inc. OG SEACOR Holdings NYSE:CKH 1,395 818 223 860 111 12.9% 616 5.6x 1.6x NM Inc. Seaspan NYSE:SSW 3,706 876 306 844 501 59.4% 2,309 4.6x 4.4x 7.4x Corporation Teekay LNG NYSE:TGP 4,088 1,417 191 404 279 69.2% 1,720 6.2x NM NM Partners L.P. Wallenius Wilhelmsen OB:WWL 6,173 2,593 755 1,156 258 22.3% 3,424 13.3x NM NM Logistics ASA 14.0x 2.5x S&P 500 S&P 500 12.0x 1.7x 2.0x 10.5x 1.4x 9.8x 9.3x 1.7x 10.0x 9.0x 7.8x 9.7x 9.0x 1.5x 8.2x 8.5x 1.3x 1.3x 1.4x 7.1x 1.5x 1.3x 8.0x REVENUE 1.3x 1.3x 7.1x 1.2x 6.0x 1.0x 4.0x EV EV / EBITDA 0.5x 2.0x EV / TOTAL

0.0x 0.0x

Sector Summary in Millions USD (converted where necessary) Charts show average daily multiples for each year Data sourced from S&P Capital IQ on September 30, 2017

www.g2cap.com 8 Transportation & Logistics Public Trading Metrics – Rail Services

Enterprise Market LTM LTM EBITDA LT Debt / EV / LTM EV / LTM Industry Cash LT Debt Value Cap Revenue EBITDA Margin EBITDA Revenue EBITDA

Mean 31,687 26,395 406 6,298 2,763 30.6% 5,576 2.1x 1.8x 9.3x Median 14,201 11,457 166 3,998 1,179 41.9% 4,161 2.1x 1.5x 10.5x Size (Millions USD) Leverage Valuation EBITDA Company Ticker Enterprise Market LTM LTM LT Debt / EV / LTM EV / LTM Cash Margin LT Debt Value Cap Revenue EBITDA EBITDA Revenue EBITDA American Railcar NasdaqGS:ARII 1,190 737 103 536 152 28.4% 533 3.5x 2.2x 7.8x Industries, Inc. Canadian National TSX:CNR 70,458 62,116 101 9,823 5,287 53.8% 6,726 1.3x NM 13.3x Railway Company Canadian Pacific Railway TSX:CP 31,090 24,495 114 5,183 2,679 51.7% 5,908 2.2x NM 11.6x Limited CSX Corporation NasdaqGS:CSX 60,298 49,556 591 11,582 5,177 44.7% 11,788 2.3x NM 11.6x

FreightCar America, Inc. NasdaqGS:RAIL 111 243 101 507 11 2.1% NA NA 0.2x 10.4x

Genesee & Wyoming Inc. NYSE:GWR 7,289 4,614 84 2,077 615 29.6% 2,414 3.9x 3.5x 11.8x

Kansas City Southern NYSE:KSU 14,201 11,457 166 2,469 1,179 47.8% 2,244 1.9x NM 12.0x Norfolk Southern NYSE:NSC 47,620 38,109 642 10,226 4,286 41.9% 9,553 2.2x NM 11.1x Corporation The Greenbrier NYSE:GBX 1,593 1,372 465 2,153 345 16.0% 533 1.5x 0.7x 4.6x Companies, Inc. Trinity Industries, Inc. NYSE:TRN 7,496 4,828 809 3,998 859 21.5% 829 1.0x 1.9x 8.7x Union Pacific NYSE:UNP 107,205 92,821 1,286 20,724 9,800 47.3% 15,229 1.6x NM 10.9x Corporation

3.0x 14.0x S&P 500 S&P 500 2.5x 12.0x 2.5x 2.3x 2.2x 2.2x 2.3x 10.4x 2.1x 10.1x 2.0x 10.0x 9.5x 9.6x 9.7x 9.3x 1.9x 8.4x 9.1x 2.0x 1.8x 1.8x 7.9x 1.7x 8.0x 7.6x REVENUE 1.5x 6.6x 6.0x EV EV / EBITDA 1.0x

4.0x EV EV / TOTAL 0.5x 2.0x

0.0x 0.0x

Sector Summary in Millions USD (converted where necessary) Charts show average daily multiples for each year Data sourced from S&P Capital IQ on September 30, 2017

www.g2cap.com 9 Transportation & Logistics Public Trading Metrics – Trucking

Enterprise Market LTM LTM EBITDA LT Debt / EV / LTM EV / LTM Industry Cash LT Debt Value Cap Revenue EBITDA Margin EBITDA Revenue EBITDA

Mean 3,187 2,696 70 2,222 322 9.9% 612 1.9x 1.0x 7.5x Median 1,173 990 38 1,209 156 12.5% 161 1.6x 0.9x 7.0x

Size (Millions USD) Leverage Valuation EBITDA Company Ticker Enterprise Market LTM LTM Margin LT Debt / EV / LTM EV / LTM Cash LT Debt Value Cap Revenue EBITDA EBITDA Revenue EBITDA

ArcBest Corporation NasdaqGS:ARCB 961 860 103 2,774 147 5.3% 195 1.3x 0.3x 6.5x

Celadon Group, Inc. NYSE:CGI 561 187 6 1,055 83 7.9% 115 1.4x 0.5x 6.7x Covenant Transportation NasdaqGS:CVTI 719 530 NM 679 98 14.4% 161 1.6x 1.1x 7.4x Group, Inc. Daseke, Inc. NasdaqCM:DSKE 949 579 42 682 74 10.9% 322 4.3x 1.4x 12.7x

Heartland Express, Inc. NasdaqGS:HTLD 1,918 2,089 171 549 165 30.1% NA NA 3.5x 11.6x J.B. Hunt Transport NasdaqGS:JBHT 13,092 12,156 8 6,920 1,043 15.1% 1,085 1.0x 1.9x 12.5x Services, Inc. Knight Transportation, NYSE:KNX 7,292 7,379 89 1,114 243 21.8% NA NA 6.5x NM Inc. Landstar System, Inc. NasdaqGS:LSTR 4,060 4,180 222 3,334 272 8.1% NA NA 1.2x 14.9x

Marten Transport, Ltd. NasdaqGS:MRTN 1,110 1,120 10 688 133 19.4% NA NA 1.6x 8.3x Old Dominion Freight NasdaqGS:ODFL 9,133 9,072 34 3,122 719 23.0% 45 0.1x 2.9x 12.7x Line, Inc. P.A.M. Transportation NasdaqGM:PTSI 285 152 NM 436 52 12.0% 102 1.9x 0.7x 5.4x Services, Inc. Roadrunner Transportation Systems, NYSE:RRTS 765 365 5 1,972 101 5.1% NA NA 0.4x 7.6x Inc. Ryder System, Inc. NYSE:R 9,809 4,480 55 6,995 1,816 26.0% 4,796 2.6x 1.4x 5.4x

Saia, Inc. NasdaqGS:SAIA 1,727 1,579 NM 1,292 168 13.0% 55 0.3x 1.3x 10.3x Universal Logistics NasdaqGS:ULH 816 582 2 1,125 72 6.4% 214 3.0x 0.7x 11.3x Holdings, Inc. USA Truck, Inc. NasdaqGS:USAK 239 112 NM 418 19 4.5% 80 4.3x 0.6x 12.8x

Werner Enterprises, Inc. NasdaqGS:WERN 2,694 2,642 23 2,048 334 16.3% 75 0.2x 1.3x 8.1x

YRC Worldwide Inc. NasdaqGS:YRCW 1,181 373 182 4,748 253 5.3% 717 2.8x 0.2x 4.7x

14.0x 2.5x S&P 500 S&P 500 12.0x 8.9x 2.0x 10.0x 7.9x 7.9x 7.6x 7.5x 1.5x 8.0x 7.4x 7.6x 6.2x 6.2x 6.1x 6.3x 1.1x 1.1x

REVENUE 0.9x 1.0x 6.0x 0.9x 1.0x 0.8x 0.8x 0.9x 0.7x 0.8x 0.7x EV EV / EBITDA 4.0x 0.5x

2.0x EV EV / TOTAL 0.0x 0.0x

Sector Summary in Millions USD (converted where necessary) Charts show average daily multiples for each year Data sourced from S&P Capital IQ on September 30, 2017

www.g2cap.com 10 Transportation & Logistics Market Indicators

Market Index Trends

The Transportation sector has recovered considerably over the last 12 months, tracking closely to the S&P 500 index since Q4 of 2016. 120%

100%

80%

60%

40%

20%

0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 '12 '12 '12 '12 '13 '13 '13 '13 '14 '14 '14 '14 '15 '15 '15 '15 '16 '16 '16 '16 '17 '17 '17 -20% S&P 500 Transportation (Industry) S&P 500

Data sourced from S&P Capital IQ on September 30, 2017 Last 5 Year EV / EBITDA Trend by Industry

Though still tracking below the S&P 500 EV/EBITDA multiple average, the industry has begun to slowly increase its averages since Q4 2016, led by the Logistics segment followed by Rail and Trucking segments. The Marine subsector has seen a slight decline over the last quarter.

15.0x

10.0x EV / EBITDA EV

5.0x

0.0x Q1 '12 Q3 '12 Q1 '13 Q3 '13 Q1 '14 Q3 '14 Q1 '15 Q3 '15 Q1 '16 Q3 '16 Q1 '17 Q3 '17

S&P 500 Logistics Marine Rail Services Trucking

Data sourced from S&P Capital IQ on September 30, 2017

www.g2cap.com 11 Transportation & Logistics M&A Activity – Middle Market

Though mid market deal volumes have come down off historical highs, frothy debt availability continues to drive premium valuations.

US PE Buyout Activity by Quarter

900 68%

800 66%

700 64%

313

300

289

313

340

308

257

295

278

294 301 600 271

62%

302 282

500 242 234

198 60% 224

400 195

58% On On % Buyout of

300 -

529

520

516

514

502

501

495

494

Deal Value Deal Value ($MM) 488

487 56% 482

200 476

Add

408

407

405

400

381 340 100 322 54% 0 52% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2013 2014 2015 2016 2017* Axis Title

Add-on Non Add-on Add-On % of Buyout

M&A transaction multiples are the median North American M&A activity independent of target / acquirer industry and enterprise value. The dataset has been restricted to multiples between 0.0x and 30.0x EBITDA; *Sourced through Pitchbook’s Q3 2017 Report. US M&A Transaction Multiples

$12

10.7x 10.5x 10.1x $10 9.1x 9.3x 9.2x 8.5x 8.1x $8

5.8x $6 5.5x 5.7x 5.2x 5.2x 5.4x5.3x 4.7x 4.7x 4.6x 4.5x

Deal Value ($B) Value Deal 4.x 3.8x 3.8x 4.x $4 3.5x

$0 2010 2011 2012 2013 2014 2015 2016 2017* Debt / EBITDA Equity / EBITDA Valuation / EBITDA

*Sourced through PitchBook Q3 2017 Report

www.g2cap.com 12 G2 Overview Investment Banking and Restructuring Advisory

G2 Capital Advisors provides C-level led investment banking and restructuring advisory services to middle market institutional investors and companies. G2 offers a comprehensive suite of investment banking services, creating a one-stop shop with non-conflicting strategic alternatives perspectives on what is truly best fit for each client.

THIRTY-FIVE professionals FOUR Industry Practice Groups FIVE Service Offerings

Securities Transportation & Logistics / Supply Chain Sell-Side

Buy-Side Technology / Business Services Operational Restructuring Aerospace & Defense / Security Financial Restructuring

Industrials / across SIX offices Manufacturing

G2 Overview Sector-Focused; Experience-Based G2 is focused in four sectors; each practice group headed by a leader with 20+ years of C-level operating experience. G2’s managing directors have navigated all stages of the corporate lifecycle, from growth to maturity, and apply that experience to provide advisory services to our clients.

Transportation & Industrials / Technology / Aerospace & Defense / Logistics / Supply Chain Manufacturing Business Services Security

Led by Ron Lentz Led by Jack Shields Led by Matt Konkle Led by Jim Bullion

. Freight Forwarding . Manufacturing / Distribution . Tech-enabled Services . Cyber Security . Trucking / Final Mile . Flooring . BPO . Defense Robotics . Warehousing / Distribution . Plastics / Packaging . Managed Services . UAV, C4ISR, Hardware . Third Party Logistics (3PL) . Consumer Products . Internet & Digital Media . Aerospace Electronics . e-Commerce Fulfillment . Metals . Business Services . Telecommunications

G2 Capital Advisors offers an integrated and complementary set of financial and corporate advisory services to assist our clients through the lifecycle of a business.

www.g2cap.com 13 G2 Overview Ron Lentz, Managing Director G2 Capital Advisor’s Transportation & Logistics industry practice leader, Ron Lentz, brings 25+ years of C- level leadership and operating experience to the Transportation & Logistics practice group.

Company Title Role

Restructured operations of international freight CEO forwarder and acquired 11 companies in 18 months before selling the parent at 4.5x premium. Doubled the size of company sales and EBITDA EVP in 18 months before selling at a 2.5x premium.

Restructured and recapitalized the company, COO before selling for $400 million. Restructured platform company for a private COO equity group before selling for $658 million – representing a 6x return on initial investment. Co-founded the business in 2000, building the company from start-up to $150 million in CEO revenues in 18 months then sold to private equity Ron Lentz firm in 2002. Practice Leader Transportation & Logistics Built Ryder’s 3PL division from $100 million EVP revenues in 1988 to $2.4 billion in 1999.

G2 Overview Select On-going G2 Projects

. Project Customs – G2 is currently advising a leading customs Project Customs brokerage, compliance, and freight solutions provider in a buy- side process. Search criteria includes: Buy-Side . Core Services: sophisticated Air freight forwarding, international freight forwarding Freight Forwarding and . Value-Added Services: Asset-light ancillary services, Customs Brokerage import services, freight / customs bundling . Location: Headquartered in North America

. Project Armor – G2 is currently advising a high growth, asset- light, tech-enabled healthcare logistics provider in a sell-side Project Armor process. The client provides expedited logistics of pharmaceuticals in a B2B capacity in North America. Sell-Side Healthcare Logistics

www.g2cap.com 14 Reference G2 Team

Ron Lentz, Managing Director Jeffrey Unger, CEO [email protected] [email protected] 630.362.8317 617.918.7929

Theodore Bang, Analyst [email protected] 617.910.0918

Term Definition

Total revenue from the sale of goods and services rendered during the reporting period, in normal course of Revenue business, reduced by sales returns and allowances, and sales discounts. For banks, this item is defined as net interest income after loan loss provisions

Earnings before interest, taxes, depreciation, and amortization. Calculated as Revenue – Expenses, excluding EBITDA interest, taxes, depreciation and amortization

Market value of a company using most recently reported basic weighted average shares outstanding. Market Cap Calculated as Market Price (as of period end) * Basic Weighted Average Shares Outstanding

Sum of the carrying values as of the balance sheet date of long-term debt with a maturity beyond one year or Long-Term Debt the normal operating cycle, if longer

Net Debt shows the company’s overall debt situation by netting the value of debts with cash and other similar Net Debt liquid assets. Calculated as Total Debt – Cash & Cash Equivalents and Short Term Investments

Enterprise Value represents the combined economic value of a company as of the most recent fiscal year end. Enterprise Value Calculated as Diluted Market Capitalization + Total Debt + Minority Interest + Preferred Stock – Cash and Short Term investments

A valuation ratio of a company stock price compared to its per share earnings. Calculated as Market Price / P/E Earnings per Share for the last annual period

Tangible Book Value Total Shareholder’s Equity – Goodwill and Intangible Assets

The information included in this Presentation is not a complete analysis of all material facts regarding any company, industry, or security and does not constitute investment advice. Opinions expressed or implied by the materials here presented reflect only the judgement of its author as of the date of the Presentation and is subject to change without notice. The information in this Presentation has been obtained from sources which G2 generally considers reliable, but we make no representation or warranty, express or implied, as to the accuracy or completeness of any information herein. This Presentation has been prepared for informational purposes only and upon the express understanding that it will be used only for the purposes set forth in the Section captioned G2 Overview above. G2 expressly disclaims any and all liability which may be based on such information, errors therein or omissions there from. Securities offered through Western International Securities, Inc. Member FINRA & SiPC. G2 Securities and Western International Securities are separate and unaffiliated entities.