Subscribe to our free, weekly email newsletter!


YRCW reports $102 million net loss in first quarter

Despite net loss, consolidating operating revenue is up nearly 14 percent annually
By Jeff Berman, Group News Editor
May 06, 2011

Earlier today, less-than-truckload (LTL) transportation services provider YRC Worldwide (YRCW) reported a $102 million net loss in the first quarter and a $2.14 loss per share. Despite the losses, company officials said this represented an improvement over the first quarter of 2011, which saw a net loss of $274 million and $13.15 per share.

YRCW, which has lost nearly $3 billion over the last four years, also reported that first quarter consolidated operating revenue for the quarter was $1.1 billion, with a consolidated operating loss of $68 million, which were impacted by harsh winter weather and other expenses such as $8 million in restructuring fees and a $17 million charge related to workers’ compensation claims. This was better than last year’s first quarter, which saw consolidated operating revenue of $987 million (13.8 percent less than this year’s first quarter) and an operating loss of $233 million.

This earnings release follows a recent announcement by YRCW in which it stated that it reached definitive agreements with its senior secured lender groups, shareholders, pension funds, the Teamsters union for the company’s restructuring plan, which is scheduled to be completed in July.

YRCW Chairman, President, and CEO Bill Zollars said on a conference call that this agreement enhances the company’s liquidity and improves the health of its balance sheet. Under the restructuring plan, YRCW gets an immediate infusion of $100 million in new capital to help it stay afloat. YRCW says it also will receive “increased liquidity” from a new asset-based loan (ABL) facility, replacing the current ABS facility.  In addition, the restructuring plan contemplates that a portion of the company’s existing loans and other obligations will be exchanged for new securities, including the exchange of some obligations for equity.

YRCW also said it has engaged Morgan Stanley to arrange a $400 million Asset-Based Loan facility as part of its overall restructuring plan.

In addressing YRCW’s first quarter performance, Zollars said that despite the severe winter weather the company is encouraged by the year-over-year improvement in its operating performance, as customers continue to return and the company remains focused on its three main operational initiatives: disciplined pricing, customer risk management, and costs improvement.

“Industry pricing is firming as economic growth and seasonality absorb industry capacity,” said Zollars. Our year-over-year volume comparisons improved every quarter of 2010 as we narrow the year-over-year gap and turned positive year-over-year in January 2011.”

Tons per day at YRC National Transportation were up 7.9 percent year-over-year, and revenue per shipment was up 3.3 percent, with annual volume increases up each month during the quarter. Total quarterly shipments for YRC National were up 7.1 percent annually and 3.4 percent compared to the fourth quarter.

At YRC Regional, tons per day were up 16.9 percent and revenue per shipment was up 7.7 percent. Total shipments were up 9.8 percent year-over-year and 5.3 percent compared to the third quarter.

Pricing also saw first quarter gains throughout the quarter, with contractual increases tracking ahead of last year. Zollars noted that YRCW remains focused on efforts to improve customer mix management, noting that it hired additional local sales representatives to support its growth initiatives in this channel.

“Changes in weight per shipment and customer mix affected pricing metrics for National and Regional in the quarter,” said Zollars. “National increased its weight per shipment by 1.5 percent…Regional’s weight per shipment was up 5.8 percent.”

The first quarter marked the sixth consecutive quarter of year-over-year EBITDA improvement.

Satish Jindel, principal of SJ Consulting in Pittsburgh, said recently that YRC’s survival hinges on support from at least three of four constituencies: shippers, employees, debt holders, and stockholders.
 
Lenders have been uncharacteristically patient with YRC, largely because they must feel that they would not be sufficiently compensation in a Chapter 7 liquidation. That’s because of the decline recently in used truck valuations. YRCW has closed terminals and reduced its geographic footprint, which has resulted in a company about one-half the size it was about four years ago. But the company has survived an industry price war led by some of its major competitors, including Con-way and FedEx Freight.
 
Recently, RBC Capital Markets analyst John Barnes called YRCW a “case study in how to survive a downturn.” Already, in losing more than $2.7 billion, YRC has become the biggest money-losing trucking company ever to remain in business.

For related stories, please click here.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Panjiva, an online search engine with detailed information on global suppliers and manufacturers, recently said it is opening up the “vault,” so to speak. The vault in this case is making its copious amount of trade data accessible through an Application Programming Interface (API), which enables customers to extract Panjiva’s trade data into their own database.

Freight transportation and logistics services provider Averitt Express recently announced it has rolled out improved transit times for less-than-truckload (LTL) service from the Midwest to Toronto and other cities.

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

Anne Ferro, a ferocious advocate for greater truck safety and a constant thorn to truck drivers and some unsafe trucking fleets, says she is leaving as administrator of the Federal Motor Carrier Safety Administration. No successor has been immediately named.

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

Article Topics

News · Trucking · Transportation · LTL · YRC Worldwide · Earnings · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA