YRC Worldwide Inc. on Thursday, Jan. 29, announced a fourth-quarter 2008 loss of $244.4 million compared with a loss of $735.8 million in the year-ago period. Revenue totaled $1.93 billion compared with $2.39 billion. YRC incurred a $141 million charge in the quarter related to the Roadway trade name as the company introduced a new YRC brand for its integrated Yellow Transportation and Roadway network.
“Our results reflect the significance of the economic recession that has been longer and deeper than anyone anticipated,” said Bill Zollars, chairman, president and chief executive officer of Overland Park, Kan.-based YRC. “Although we were not pleased with this level of performance, it was consistent with our internal expectations and those of our banking group. The discussions with the banks are progressing well, and we are on track to finalize an amendment by mid-February.”
For all of 2008, YRC posted a loss of $974.4 million versus a loss of $638.4 million in 2007. The company generated $220 million of cash from operating activities during 2008, and after accounting for net capital expenditures of $35 million, 2008 free cash flow was $185 million. Total debt at Dec. 31 increased by $127 million compared to the prior year. However, when taking into account cash and cash equivalents of $325 million at Dec. 31, the company’s debt, net of cash, decreased by $140 million compared to 2007.
“Even in this economic environment, we generated a significant amount of cash, and we have multiple initiatives in place that can further improve liquidity,” Zollars said. “We recognized $128 million of asset proceeds in 2008, and we expect to generate more than $250 million in 2009 from a combination of sale and financing leaseback transactions and sales of excess facilities.”
Key segment information for fourth quarter 2008 compared to fourth quarter 2007 included:
“Although we cannot control or even predict the economy, we have considerable opportunities to improve our financial position while enhancing service to our customers,” Zollars said. “The network integration at YRC is now on track to deliver a run-rate of $200 million of operating income improvement by early in the fourth quarter of 2009. Combining this with the employee wage reductions of around $300 million, we expect to improve our results by more than half a billion dollars going into 2010.”
As a result of the integration efforts at YRC, the company has made some changes in the management reporting structure. Effectively immediately, Keith Lovetro, president of YRC Regional Transportation, reports directly to Zollars. Mike Smid, president of YRC National Transportation, continues to lead the integration of Yellow Transportation and Roadway and remains responsible for all functions of YRC Inc.; Smid continues to report to Zollars.