YRC Worldwide posts smaller first-quarter loss
May 3, 2012
YRC Worldwide Inc.’s consolidated operating revenue for the first quarter of 2012 rose 6.4% to $1.194 billion from the same 2011 period, the company reported May 3. The Overland Park, Kan.-based company’s consolidated operating loss was $48.8 million, down from a $68.4 million loss in the first quarter of last year. Not only was YRC’s loss lower, the latest loss included an $8.4 million loss on asset disposals while last year it had a $3 million gain on asset disposal in the first quarter.
On Monday, April 30, the company also announced that 100 percent of its senior credit facility lenders agreed to reset certain financial covenants over the life of the loans and allow the Overland Park, Kan.-based company to retain all proceeds from the auction of certain surplus properties to pay or settle workers’ compensation and bodily injury and property damage claims.
In addition, the company reported, on a non-GAAP basis, adjusted EBITDA for the first quarter of 2012 of $15.3 million, up from negative adjusted EBITDA of $1.3 million during the comparable period in 2011. On a year-over-year basis, adjusted EBITDA improved $16.6 million, even after taking into consideration about $23.0 million of multiemployer pension plan expense that the company incurred in the first quarter of 2012 but not in 2011.
“We are experiencing increased efficiencies at each of our operating companies,” said James Welch, chief executive officer of YRC Worldwide. “Our employees are responding extremely well to our operating changes to regain a leading position in the LTL industry, and earlier this week, our senior credit facility lenders gave us a unanimous vote of confidence.” Welch said the company’s plan is to continue building on its positive momentum throughout 2012. “This is an exciting time at YRCW, as our team now has the financial flexibility and the tools to take this business to the next level.”
YRC Freight delivered year-over-year improvement in operating revenues, which increased 8.1% to $789.1 million; tonnage per day increased 3.5 percent; shipments per day increased 2.8%; revenue per hundredweight increased 3.3%; and revenue per shipment increased 4.0%. Regional Transportation also delivered year-over-year improvements in operating revenues, which increased 9.8% to $402.0 million; tonnage per day increased 6.0%; shipments per day increased 4.3%; revenue per hundredweight increased 4.5%; and revenue per shipment increased 6.2%.
“These year-over-year core operating improvements show promise and indicate we are on the right path,” Welch said. “However, we are still working to address some outstanding issues related to previous decisions that have affected the pace of our recovery.” Welch said the company’s workers’ compensation claims grew rapidly during the Yellow Transportation/Roadway Express integration.
“These claims increased our self-insured reserves as the company was not strategic in settling open claims at that time,” he said. “To address these injury-related issues, we have implemented the most robust employee safety training program in recent company history, and we are already seeing meaningful improvements in safety performance. This continued commitment to safety is the most important long-term investment we can make in our employees. With our intense focus on safety improvements, we anticipate workers’ compensation claims will continue to decrease.”
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