Press Release Source: YRC Worldwide On Friday November 5, 2010, 8:30 am
OVERLAND PARK, Kan. Nov. 5, 2010 /PRNewswire-FirstCall/ --
YRC National Tonnage up 1.2% and YRC Regional up 2.1% from Second Quarter 2010
Achieved Significant Progress on Comprehensive Recovery Plan
YRC Worldwide Inc. (Nasdaq:YRCW - News) today reported its third quarter 2010 results. For the third quarter ending September 30, 2010, the company announced a net loss of $62 million and a $1.33 loss per share on average outstanding diluted shares of 46.5 million. As a comparison, the company reported a net loss of $159 million and a $66.66 loss per share in the third quarter of 2009 with average outstanding diluted shares of 2.4 million. The numbers of shares and the per share amounts for all periods presented within this release reflect the 1:25 reverse stock split which was effective on October 1, 2010.
"We are pleased with the continued support of our customers and our employees who remain focused on delivering results," stated Bill Zollars, Chairman, President and CEO of YRC Worldwide. "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."
For the third quarter of 2010, the company reported positive cash flow from operating activities of $5 million which included positive adjusted EBITDA which was in excess of working capital requirements, cash interest and restructuring professional fees. Adjusted EBITDA is a non-GAAP measure that reflects the company's earnings before interest, taxes, depreciation, and amortization expense, and further adjusted for letter of credit fees, equity-based compensation expense, net gains or losses on property disposals and certain other items, including restructuring professional fees and results of permitted dispositions and discontinued operations as defined in the company's credit agreement.
During the third quarter of 2010, the company issued $20.2 million in 6% notes and used the proceeds to retire approximately $20 million of 5% notes. The company repaid $25 million in borrowings under its asset-backed securitization ('ABS') 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 September 30, 2010, 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.
"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," stated Sheila Taylor, Executive Vice President and CFO of YRC Worldwide.
As previously announced, during October 2010, the company renewed its ABS facility at $325 million through October 19, 2011.
Key Segment Information
Third quarter 2010 compared to the third quarter of 2009:
YRC National Transportation: tons per day down 13.0% and shipments per day down 12.2%; revenue per hundredweight up 2.8% and revenue per shipment up 1.9%.
YRC Regional Transportation: tons per day up 8.9% and shipments per day up 2.5%; revenue per hundredweight down 2.5% and revenue per shipment up 3.7%.
Third quarter 2010 compared to the second quarter of 2010:
YRC National Transportation: tons per day up 1.2% and shipments per day up 1.6%; revenue per hundredweight up 0.3% and revenue per shipment down 0.1%.
YRC Regional Transportation: tons per day up 2.1% and shipments per day up 1.8%; revenue per hundredweight up 0.1% and revenue per shipment up 0.5%.
Outlook
"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," stated Taylor. "We are in discussions with appropriate stakeholders to complete the next steps of our comprehensive recovery plan and feel good about our progress."
In addition, the company has the following expectations for full year 2010:
Gross capital expenditures in the range of $20 million to $30 million
Excess property sales in the range of $70 million to $80 million
Sale and financing leasebacks of approximately $50 million
Effective income tax rate for continuing operations of approximately 3%
Review of Financial Results
YRC Worldwide Inc. will host a conference call for the investment analyst community today, Friday November 5, 2010, beginning at 9:30am ET, 8:30am CT. The conference call will be open to listeners via the YRC Worldwide Internet site yrcw.com. An audio playback will be available after the call also via the YRC Worldwide web site.
Certain Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP measure that reflects the company's earnings before interest, taxes, depreciation, and amortization expense, and further adjusted for letter of credit fees, equity-based compensation expense, net gains or losses on property disposals and certain other items, including restructuring professional fees and results of permitted dispositions and discontinued operations as defined in the company's credit agreement. Adjusted EBITDA is used for internal management purposes as a financial measure that reflects the company's core operating performance. In addition, management uses adjusted EBITDA to measure compliance with financial covenants in the company's credit agreement. However, this financial measure should not be construed as a better measurement than operating income, operating cash flow or earnings per share, as defined by generally accepted accounting principles.
Adjusted EBITDA has the following limitations:
Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our outstanding debt;
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for such replacements;
Equity based compensation is an element of our long-term incentive compensation program, although adjusted EBITDA excludes it as an expense when presenting our ongoing operating performance for a particular period; and
Other companies in our industry may calculate adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
Because of these limitations, adjusted EBITDA should not be considered a substitute for performance measures calculated in accordance with GAAP.
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