YRC Worldwide posts smaller 3Q net loss

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Updated Nov 6, 2010

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YRC Worldwide Inc. on Friday, Nov. 5, announced a third-quarter 2010 net loss of $62 million compared to a net loss of $159 million in the third quarter of 2009. “We are pleased with the continued support of our customers and our employees who remain focused on delivering results,” said Bill Zollars, chairman, president and chief executive officer of the Overland Park, Kan.-based company. “We have achieved significant progress on our comprehensive recovery plan with the ratification of our new labor contract and the renewal of our ABS facility.”

The less-than-truckload company avoided a bankruptcy filing last fall and is in the process of restructuring. During the third quarter of 2010, YRC Worldwide issued $20.2 million in 6 percent notes and used the proceeds to retire about $20 million of 5 percent notes. The company repaid $25 million in borrowings under its asset-backed securitization facility, sold excess property of $36 million and entered into $3 million of new sale and financing leasebacks during the quarter. In addition, the company closed on the previously announced $38.7 million sale of the majority of its YRC Logistics business and used the net proceeds to pay down borrowings under the credit agreement. During 2010, the company has reduced its total debt by $73 million.

At Sept. 30, the company reported cash and cash equivalents of $115 million, unrestricted revolver availability of $46 million and unused restricted revolver reserves of $123 million, subject to the terms of the company’s credit agreement, for a total of $284 million. The company renewed its ABS facility at $325 million through Oct. 19, 2011, and Teamsters union employees last week ratified a third round of concessions that are expected to save YRC Worldwide $350 million annually. The company and the union face a federal lawsuit and formal grievance from competitor ABF Freight System Inc., which claims the three rounds of concessions violate a labor agreement and put ABF at a competitive disadvantage.

“We continue to effectively manage our working capital, reduce debt and improve our cash flow, as demonstrated by the significant sequential improvement in our cash flow from operating activities from second quarter to third quarter,” said Sheila Taylor, executive vice president and chief financial officer of YRC Worldwide.

YRC National Transportation reported that year-over year, tons per day were down 13.0 percent and shipments per day were down 12.2 percent, while revenue per hundredweight was up 2.8 percent and revenue per shipment was up 1.9 percent. YRC Regional Transportation year-over-year tons per day were up 8.9 percent and shipments per day were up 2.5 percent, while revenue per hundredweight was down 2.5 percent and revenue per shipment was up 3.7 percent.

Comparing the 2010 third quarter to the 2010 second quarter, YRC National Transportation tons per day were up 1.2 percent and shipments per day were up 1.6 percent, while revenue per hundredweight was up 0.3 percent and revenue per shipment was down 0.1 percent. YRC Regional Transportation tons per day were up 2.1 percent and shipments per day were up 1.8 percent, while revenue per hundredweight was up 0.1 percent and revenue per shipment was up 0.5 percent.

“With our continued operating momentum, we expect to achieve positive adjusted EBITDA and be well within our credit agreement financial covenants in the fourth quarter of 2010,” Taylor said. “We are in discussions with appropriate stakeholders to complete the next steps of our comprehensive recovery plan and feel good about our progress.”