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Mullen Group is pursuing a business plan for next year that covers several key goals and budgets based on the coronavirus remaining an issue, the company detailed Dec. 9.
The consumer-driven economy is expected to keep evolving for the pandemic’s duration, and Mullen leadership believes business will remain stable in 2021 in a similar way to this year.
“We started the year with a good plan and high expectations, and then everything was thrown into chaos,” CEO Murray Mullen said during a conference call Dec. 10. “It’s obvious we weathered the storm pretty well.”
Mullen noted that one reason was consumers were reliant. He also said the company moved quickly when the coronavirus was identified as a public health threat, including reducing discretionary expenses across the board. Along with that, not all business units were negatively impacted by government shutdown orders because some supported essential segments of the economy.
“The oil and natural gas industry was one of the hardest hit, and I think everyone knows that,” Mullen said. “Offsetting that was the infrastructure building of our premier frontline group, which had a great year with a deep budget and target.”
Mullen also highlighted several trends from this year that are likely to have a lasting effect on the business. Consumers largely have shifted their spending from services to goods. There also has been an increase in remote work, online orders and a bigger desire for health and safety.
“In my view, many of these trends will remain regardless of whether COVID subsides or not,” Mullen said. “These macro trends that are mentioned are going to have a lasting impact on our business, and we must consider all of those implications.”
Mullen also said that he expects the second wave of the pandemic to impact the global supply chain and the economy. But once vaccines begin to stem the tide of infections, the opportunity for growth will return and the business will be prepared and positioned to capitalize on the economic recovery.
Mullen Group expects revenue to be in the $1.2 billion-to-$1.3 billion range with each segment accounting for approximately 33% of that in 2021. The company based expectations on the continued economic recovery and stable consumer spending. Annual revenue was $1.3 billion in 2019.
Business operating income before depreciation and amortization is predicted to be in the range of $200 million to $220 million. This is based on expectations that infrastructure projects will continue to contribute to the bottom line next year.
The board of directors approved the business plan during its annual budget meeting, which covered the state of the North American economy, the pandemic, the impact of an anticipated vaccine, the recent recovery in commodity prices, the balance sheet and expected cash flows.
Mullen Group is a transportation and logistics provider based in Okotoks, Alberta. Services include less-than-truckload, truckload, warehousing, logistics, transload and oversize and specialized hauling transportation throughout North America.
The board also approved a capital budget of $60 million for 2021 that is exclusive of corporate acquisitions or investment in facilities, land and buildings. The budget allocates $50 million toward maintenance capital primarily to replace trucks, trailers, specialized equipment and technology to support business operations. Also, $10 million will be allocated to fund growth and create jobs in Canada.
Mullen Group maintained a cash balance in excess of $100 million on the balance sheet as of Dec. 9. Those funds will be used to pursue strategic acquisitions. The focus will be on the less-than-truckload, and the logistics and warehousing segments.
Mullen Group ranks No. 54 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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