Welcome to the Market Herald “Learn & Earn” Video Q&A Podcast. I’m Simon Druker. Meet the company that’s driving diversity, stability, and reliability in the critical transportation, and logistics sectors – The Mullen Group.
Founded in 1949, the company is now one of Canada’s premier logistics and warehousing companies serving North America Today, we’re happy to be joined by the company’s Senior Operating Officer Richard J. Maloney. Thanks very much for dropping by The Market Herald, Richard.
TMH: To start off can you tell us a little bit about yourself and your history with the company?
RM: Simon, First off, thank you for having me. Again, my name is Richard Maloney and I am the senior operating officer of the Mullen group. I have worked for the Mullen group for about 25 years and like many of our senior managers and executives, I started working in one of our business units. In fact, I worked at the first company Mullen group acquired in 1994. They’re called Premade equipment. From there I moved into more into the corporate office and have held a number of progressively more senior positions today. I’m one of the four senior executives of the Mullen Group.
TMH: Taking a deeper look Mullen, what separates the company from the competition in the logistics space?
RM: Mullen Group is one of the leading transportation and logistics providers in all of north America. since going public in 1993, Mullen has been a consolidator of companies having grown through acquisitions to be a logistics powerhouse employing 7,200 people, through a diverse group of 38 self-managed business units operating within four distinct operating segments servicing all aspects of the economy. We operate a decentralized business model, which means that each of our 38 self-managed business units operates autonomously and are responsible for their own operating results. We believe in the decentralized business model because it drives decision making and accountability to the business unit level and it’s our business units that have the relationship with the customers and it’s our business units that recruit and select the people that they want to work for them in the communities that they operate. So what is Mullin group’s role you may ask? Well, first we are responsible for the overarching strategy of the organization, where and how we want to grow, generally through acquisitions. Secondly, we oversee the deployment of capital funding for new equipment and facilities. Shareholders can think of us as the guardians of the capital. Then it’s up to the business units to execute and deliver the goods so to speak. So Simon, if the COVID pandemic has taught us anything, is that trucking, transportation and logistics are essential for an economy to function. We say the old adage in trucking is if you got it, a truck brought it and quite simply, we keep the economy moving and have been since 1949.
TMH: Mullen has a large list of subsidiaries, could you highlight a few that really stand out?
RM: Yeah. Great question, Simon. I think it would be more constructive to first understand our four operating segments. First is the LTL segment or the less than truckload here. We have 11 business units. This is our largest operating segment. When you think of LTL think of smaller shipments, think of packages, parcels, one pallet, many pallets, including eCommerce related goods. So think of many customers’ goods consolidated in one trailer. This is also where the first and final mile pickup and delivery occurs go to the actual storefronts. This network serves over 5,000 communities in Canada and we are partners with a number of large Interline carriers throughout North America. It’s also important to point out that we transport a fair amount of pharmaceuticals within our ambient and temperature controlled services throughout our entire LTL network. Next is the logistics and warehousing segment. Here we have 12 business units.
Our logistics and warehouse segment provides shippers throughout North America with a wide range of trucking and logistics services, including full load, specialized transportation, warehousing fulfillment centers that include eCommerce transactions and very, very importantly, transload rail facilities designed for intermodal and break bulk shipments. I would like to point out our continued focus on building our intermodal network. So now when you think of intermodal, think of all the boxes you see on the back of a freight train, our good working relationship with Canada’s class one railroads makes us a leading intermodal player in all of Canada. We call this the long mile, by the way intermodal also provides great optionality for our shippers and our customers to elect a transportation solution that helps reduce greenhouse gas emissions. Our third segment is the us and international logistics group. This is our US non-asset based third party logistics provider. We do not have any trucks or traders in this segment but through a network of 40 independently owned station agents, along with a corporate sales force, HUAListic offers a wide range of logistics services to 2,700 customers by utilizing 6,000 certified subcontractors. Now, this doesn’t mean 6,000 trucks. This means that HUAListic actually has access to 6,000 different trucking companies well over 80,000 trucks and they have their own proprietary transportation management system called silver express, which streamlines the transportation process for shippers, station agents and carriers. Finally, our fourth segment is specialized in industrial services. This segment is comprised of unique businesses servicing Canada’s natural resources and infrastructure sectors supporting the energy industry, the mining sector, forestry and the construction industries in Western Canada. The services include water management, fluid hauling of crude oil and produced water pipeline construction. The build out of infrastructure and industrial cleaning and turnaround work and environmental reclamation services as well. So each and every day, we have thousands upon thousands of trucks delivering essential goods, the necessities of life and everything in between to well over 5,000 communities throughout Canada and we service every state in the continental US. There are not many places that we do not go in North America. So Simon, this is just a quick rundown of our four operating segments that are on target for 2022 to generate $2 billion in revenue and $300 million in operating income.
TMH: Could you tell us about the company’s commitment to monthly dividend payouts?
RM: Great question, Simon. As a shareholder myself, I’d like to talk about dividends. The diversity of our operations across four operating segments provides Mullin group with very solid and predictable earnings. Over the past decade, we have generated on average, roughly $100 million of free cash. Each year. This $100 million is in excess of what we need for capital to invest back into our business units, along with what we need to pay interest and taxes each year. As such our board of directors believes that we should reward our shareholders with a steady and predictable dividend. In the last 20 years in fact, we have returned to our shareholders over $1.4 billion. Currently we pay a monthly, every month, a monthly dividend of 6 cents or 72 cents a year. That’s a yield of roughly 5% based on today’s stock price. I think it’s important to point out that Mullen Group’s key decision makers and that’s our executive team along with the senior management teams within Mullen group and our business units are shareholders and holders of stock options themselves. Therefore, this group is highly motivated and aligned with all shareholders in receiving monthly dividends and we are all 100% focused on ensuring that we are able to pay this monthly dividend.
TMH: Thank you very much for your time today, Richard. Anything further to add?
RM: Simon first off, thank you so much. We really appreciate the opportunity to tell shareholders and prospective shareholders about the Mullen Group. I will leave you with this, Mullen Group is a leading logistics provider in North America and we will continue to build our services over time. We provide shippers and customers with an entire mile logistics solution and we pay our shareholders each and every month, simply stated we keep the economy moving.
Thanks again for joining us at The Market Herald today, Richard. Look forward to chatting with you again.
We’ve been speaking with Richard J. Maloney, SOO of the Mullen Group. I’d like once again to thank Mr. Maloney for joining us and sharing this insightful information about his company with our video podcast audience and investors.
The Mullen Group trades on the TSX under the symbol MTL.
I’m Simon Druker for The Market Herald. Thanks for watching.
FULL DISCLOSURE: This is a paid article produced by The Market Herald Canada.