YRC Worldwide posts $86M 4Q net loss

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YRC Worldwide Inc. on Tuesday, Feb. 28, reported that its consolidated operating revenue for the fourth quarter of 2011 was $1.212 billion, up 11.1 percent over 2010, and that its consolidated operating loss was $38 million, which included a $13 million loss on asset disposals, $4 million of restructuring professional fees and $9 million of letter-of-credit fees; excluding these items, on a non-GAAP basis, 2011 fourth-quarter operating loss would have been $12 million.

As a comparison, the company reported consolidated operating revenue of $1.092 billion for the fourth quarter of 2010 and a consolidated operating loss of $28 million, which included a $3 million loss on asset disposals, $8 million of letter-of-credit fees and $6 million of restructuring professional fees; excluding these items, on a non-GAAP basis, 2010 fourth-quarter operating loss would have been $11 million.

The Overland Park, Kan.-based company reported a net loss of $86 million for the fourth quarter of 2011 compared to net income of $15 million for the fourth quarter of 2010, which included an $87 million income tax benefit primarily due to a favorable IRS settlement.

YRC Freight (formerly YRC National Transportation) operating revenues were up 11.0 percent to $805 million, adjusted operating ratio was 101.5, tons per day were up 6.7 percent, shipments per day were up 6.0 percent, revenue per hundredweight was up 4.8 percent, and revenue per shipment was up 5.5 percent.

Regional Transportation operating revenues were up 12.6 percent to $382 million, adjusted operating ratio was 97.7, tons per day were up 4.7 percent, shipments per day were up 2.5 percent, revenue per hundredweight was up 5.7 percent, and revenue per shipment was up 7.9 percent.

“I am pleased with the renewed focus on customer service, but obviously not satisfied with our consolidated operating results,” said James Welch, chief executive officer of YRC Worldwide. “However, I am encouraged that our performance trends over the fourth quarter are consistent with or exceeding the consolidated operating plan created by our now autonomous operating companies.”

Welch said the company’s plans to streamline and simplify the YRC Freight network during 2012 are designed to enable fewer touches of the freight, expedite delivery to customers, reduce costs by network optimization and “allow YRC Freight to return to its core competency of handling LTL shipments moving in the 2-day to 5-day transit lanes, which are generally between 500 and 3,500 miles. Our YRC Freight growth strategy will focus on delivering consistent high-quality long-haul service that is reliable and cost-effective with competitive transit times.”

On Dec. 15, 2011, the company sold a significant portion of the assets of its Glen Moore truckload operating subsidiary and redeployed the remaining revenue equipment units to YRC Freight and the Regional operating companies. “The proceeds from the sale of our Glen Moore assets improved our liquidity position and, more importantly, enable us to better focus our efforts on improving our core North American LTL businesses,” said Jamie Pierson, executive vice president and chief financial officer. “We continue to evaluate additional sales of nonstrategic assets.”

Pierson said YRC Worldwide has hired Chicago-based NRC Realty & Capital Advisors to coordinate the auction of 62 of the company’s surplus properties resulting from its network integration activities. “These surplus properties currently have substantial holding cost, maintenance and real estate taxes,” he said. “We have chosen the auction process to monetize these properties and turn a liability into an asset. Some of these sites have been on the market for over three years, and we are marking them down to sell.”