YRC Worldwide Inc. today, Feb. 5, reported year-over-year and continued sequential improvement in its fourth quarter 2009 results. For the quarter ending Dec. 31, the company announced pretax income of $50 million that included a net gain on note exchanges of $194 million, lease termination charges of $8 million related to further optimization of the YRC network, and severance charges of $3 million due to further headcount reductions.
For the full year, the company reported a pre-tax loss of $899 million compared to a full-year pre-tax loss in 2008 of $1.147 billion, including impairment charges of $1.023 billion. For the fourth quarter of 2008, the company reported a pre-tax loss of $353 million, which included impairment charges of $200 million.
“We continued our positive momentum in the fourth quarter as we executed on our comprehensive plan,” said Bill Zollars, chairman and chief executive officer of YRC Worldwide, based in Overland Park, Kan. “During 2009, we accomplished the integration and right-sizing of the national networks, the turnaround of the regional business, cost reductions and process improvements, a self-help liquidity program and, most recently, the successful note exchange to conclude the year. With our significantly improved balance sheet and additional liquidity resulting from our debt-for-equity exchange, we entered 2010 on a more solid financial base with good momentum.”
The company reported an operating loss of $95 million for the fourth quarter of 2009, a continued sequential improvement from the third-quarter operating loss of $118 million, which included a net gain on property disposals of $11 million, following the sequential improvement reported for the second quarter, and a year-over-year improvement from the fourth-quarter of 2008 operating loss of $335 million, which included impairment charges of $200 million.
The company said it is executing on its plan to raise new capital sufficient to satisfy the remaining 2010 note obligations and is in advanced discussions with investors. At Dec. 31, 2009, the company reported cash and cash equivalents of $98 million and unused revolver reserves of $160 million within the company’s $950 million revolving credit facility. The company also reported usage of $223 million under its $400 million asset-backed securitization facility.
In addition, the company has filed its 2009 estimated federal tax return using the newly available five-year carry-back legislation. YRC Worldwide expects to receive an $85 million cash refund during the first quarter of 2010, which the company would use for operating liquidity.
For the fourth quarter, the company completed sale and financing leasebacks of $26 million and sold $27 million of surplus property. During 2009, the company completed sale and financing leasebacks of $332 million and sales of surplus property of $133 million, and deferred union pension contributions of $171 million, all as part of the company’s self-help liquidity plan.
For the fourth quarter 2009 compared to the fourth quarter 2008:
YRC National Transportation total shipments per day were down 39.9 percent, and total revenue per hundredweight, including fuel surcharge, was down 4.2 percent.
YRC Regional Transportation total shipments per day were down 19.9 percent, and total revenue per hundredweight, including fuel surcharge, was down 7.7 percent.
“Our fourth-quarter sequential improvement in operating results, despite seasonally lower revenues, resulted from our cost improvement actions, continued pricing discipline and initiatives to improve our revenue mix,” said Tim Wicks, president and chief operating officer of YRC Worldwide. “Our improved performance, measured year-over-year and from a lower revenue base, is now becoming apparent in our operating results, and we expect favorable year-over-year comparisons will accelerate during 2010.”
