YRC Regional and Logistics Profitable

YRC Worldwide (YRCW) had the backing of its lenders in its many moves to restructure debt, cut costs and attempt to manage its way back to stability and profit. According to comments of Bill Zollars, chairman and CEO of YRC Worldwide, 100% of the lenders had agreed to its most recent asset-backed securitization (ABS) facility and credit agreement amendments. The ABS has a total capacity of $400 million through October 2010, extended from the earlier expiration of February 2010.

“We continue to receive solid support from our lenders as we implement our recovery plan to manage through this severe economic downturn,” said Sheila Taylor, EVP and CFO.

While YRCW gets some breathing room to continue efforts to turn its financial slide, Zollars stated he was seeing some stabilization in pricing and volumes. Stable doesn't necessarily mean improving, and YRCW's various units reported declines in most areas. The third quarter looked much like the second quarter, according to the YRCW executives; revenues of $1.3 billion were off from $2.3 billion for the same period a year earlier. For the nine months ended September 30, 2009, revenues were $4.1 billion down from $7 billion in the like period in 2008.

The bottom-line results showed a $158 million net loss for the quarter and a $741 million net loss for the nine-month period. This compares to a $720 million quarterly net loss in 2008 and a year-to-date net loss of $731 million in 2008.

At the business-unit level, YRC National Transportation, the national less-than-truckload (LTL) operation, operating revenues were down 49.9% to $849 million. YRC Regional Transportation posted revenues of $338 million, off 33.5% from the prior-year third quarter. YRC Logistics brought in $102 million in revenues and YRC Truckload produced just under $30 million in revenues. Those results were 38.1% and 10.1% below the prior year, respectively.

A quarter-to-quarter view looks a bit different from the year-to-year comparisons. YRCW reported total revenue for YRC National of $863 million in the second quarter, which was 48.4% off from the prior-year quarter. The revenue comparison of second to third quarter shows YRC National was down less than 2%. Similarly, YRC Regional posted $337.8 million in revenues for the second quarter vs. $338.7 million in the current quarter.

With an operating ratio of 114.4, YRC National had a loss of $122 million, compared with a prior-year loss of $573 million in the same period.

YRC Regional squeaked by with a 99.9 operating ratio and showed a $293,000 profit. Logistics fared better with an OR of 93.9, which equated to a $6 million profit.

Volumes dropped at both National and Regional. Total shipments per day were off 39.9% at National and 22.7% at regional.

Tim Wicks, COO, pointed out that YRC was focusing on growing market share in segments where it was needed and that has helped improve yield. Zollars reiterated that pricing was very competitive but stabilizing for YRC and the company was focused on pricing discipline and profitable customers.

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