By Carey Gillam
OVERLAND PARK, Kan., Feb 5 (Reuters) - Back from the edge of bankruptcy, YRC Worldwide posted a smaller fourth-quarter operating loss on Friday and forecast better times for 2010 as the leading U.S. trucker said it expected shipping volumes to grow and its financial position to improve.
YRC Chairman Bill Zollars said though efforts to turn the company around depend in part on the speed of an economic recovery, YRC was seeing an influx of new and returning customers, was addressing pressing debt obligations and expects to start seeing positive cash flow in the second quarter.
'We're very confident we can grow this business. We have a lot of upside in the network,' he told analysts in a conference call.
Overland Park, Kan.-based YRC did not report earnings per share or net after-tax earnings Friday, citing a delay related to its recent debt-for-equity exchange, which the company had said was crucial to its effort to avoid bankruptcy.
But on a pretax basis, YRC said it earned $50 million for the quarter, compared with a year-earlier loss of $353 million, while its operating loss narrowed to $95 million from $335 million.
Operating revenue fell to $1.15 billion from $1.93 billion. Analysts were expecting $1.22 billion, according to Thomson Reuters I/B/E/S.
Fourth-quarter results benefited from sale and financing leasebacks of $26 million and property sales totaling $27 million. The company also had a net gain of $194 million on note exchanges, lease termination charges of $8 million, and severance charges of $3 million.
Business volumes were down for the quarter with total shipments per day falling 39.9 percent in YRC's national division and 19.9 percent in its regional business during the fourth quarter.
But officials said shipment trends improved in January and were continuing to improve in February.
And YRC President Tim Wicks said in the call with analysts that YRC had gained 1,000 new or returning customers in the fourth quarter and first quarter so far.
'We remain optimistic we will see more volume return to us in the weeks and months ahead,' he said.
YRC has been working to restructure for more than a year and in December narrowly averted bankruptcy in an exchange of debt for equity that trims $464 million in debt from the balance sheet. The move reopened access to credit and gave the company more time to turn its struggling business around.
Analysts expressed cautious optimism, and shares climbed Friday amid the discussions of the company future. YRC shares were up 1.5 percent at 84 cents in mid-morning Nasdaq trading.
'They aren't out of the woods yet but with business picking up and new customers coming on that is going to help,' said Dahlman Rose analyst Jason Seidl.
YRC officials said the company would achieve its $200 million cost reduction objective by mid-year 2010 after a series of layoffs, asset sales and other restructuring moves over the last year.
YRC will look at additional asset sales, and sale/leaseback opportunities to raise cash and do 'additional tweaking' to its network of 360 facilities, Zollars said. But capacity is largely well balanced with volumes, he said.
'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,' Zollars said.
The company still faces many financial challenges, including the need to come up with $45 million for noteholders who did not agree to the exchange and whose bonds are coming due in April.
Analysts had hoped YRC would have a firm plan in place to cover that obligation by Friday, but the company said only that it was in 'advanced discussions with investors' to satisfy remaining note obligations.
Analysts also remain concerned about the company's liquidity position. YRC said Friday that as of Dec. 31, it had cash and cash equivalents of $98 million and unused revolver reserves of $160 million within its $950 million revolving credit facility. The company also reported using $223 million under its $400 million asset-backed securitization facility.
YRC expects to get an $85 million federal tax refund in the first quarter and plans to use it for operating liquidity.
The restructuring has been painful for YRC investors who have seen their stake plummet. The company has scheduled a Feb. 17 meeting for shareholders to approve measures that will effectively increase the amount of authorized common stock to provide for up to 4,345,514 Class A convertible preferred shares, with a par value of $1.00, to convert into the company's common stock, with a par value of 1 cent.
(Reporting by Carey Gillam; Editing by Lisa Von Ahn, Dave Zimmerman) Keywords: YRC/ (carey.gillam@thomsonreuters.com; +1 913 663 2658; Reuters Messaging: carey.gillam.reuters.com@reuters.net ) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
OVERLAND PARK, Kan., Feb 5 (Reuters) - Back from the edge of bankruptcy, YRC Worldwide posted a smaller fourth-quarter operating loss on Friday and forecast better times for 2010 as the leading U.S. trucker said it expected shipping volumes to grow and its financial position to improve.
YRC Chairman Bill Zollars said though efforts to turn the company around depend in part on the speed of an economic recovery, YRC was seeing an influx of new and returning customers, was addressing pressing debt obligations and expects to start seeing positive cash flow in the second quarter.
'We're very confident we can grow this business. We have a lot of upside in the network,' he told analysts in a conference call.
Overland Park, Kan.-based YRC did not report earnings per share or net after-tax earnings Friday, citing a delay related to its recent debt-for-equity exchange, which the company had said was crucial to its effort to avoid bankruptcy.
But on a pretax basis, YRC said it earned $50 million for the quarter, compared with a year-earlier loss of $353 million, while its operating loss narrowed to $95 million from $335 million.
Operating revenue fell to $1.15 billion from $1.93 billion. Analysts were expecting $1.22 billion, according to Thomson Reuters I/B/E/S.
Fourth-quarter results benefited from sale and financing leasebacks of $26 million and property sales totaling $27 million. The company also had a net gain of $194 million on note exchanges, lease termination charges of $8 million, and severance charges of $3 million.
Business volumes were down for the quarter with total shipments per day falling 39.9 percent in YRC's national division and 19.9 percent in its regional business during the fourth quarter.
But officials said shipment trends improved in January and were continuing to improve in February.
And YRC President Tim Wicks said in the call with analysts that YRC had gained 1,000 new or returning customers in the fourth quarter and first quarter so far.
'We remain optimistic we will see more volume return to us in the weeks and months ahead,' he said.
YRC has been working to restructure for more than a year and in December narrowly averted bankruptcy in an exchange of debt for equity that trims $464 million in debt from the balance sheet. The move reopened access to credit and gave the company more time to turn its struggling business around.
Analysts expressed cautious optimism, and shares climbed Friday amid the discussions of the company future. YRC shares were up 1.5 percent at 84 cents in mid-morning Nasdaq trading.
'They aren't out of the woods yet but with business picking up and new customers coming on that is going to help,' said Dahlman Rose analyst Jason Seidl.
YRC officials said the company would achieve its $200 million cost reduction objective by mid-year 2010 after a series of layoffs, asset sales and other restructuring moves over the last year.
YRC will look at additional asset sales, and sale/leaseback opportunities to raise cash and do 'additional tweaking' to its network of 360 facilities, Zollars said. But capacity is largely well balanced with volumes, he said.
'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,' Zollars said.
The company still faces many financial challenges, including the need to come up with $45 million for noteholders who did not agree to the exchange and whose bonds are coming due in April.
Analysts had hoped YRC would have a firm plan in place to cover that obligation by Friday, but the company said only that it was in 'advanced discussions with investors' to satisfy remaining note obligations.
Analysts also remain concerned about the company's liquidity position. YRC said Friday that as of Dec. 31, it had cash and cash equivalents of $98 million and unused revolver reserves of $160 million within its $950 million revolving credit facility. The company also reported using $223 million under its $400 million asset-backed securitization facility.
YRC expects to get an $85 million federal tax refund in the first quarter and plans to use it for operating liquidity.
The restructuring has been painful for YRC investors who have seen their stake plummet. The company has scheduled a Feb. 17 meeting for shareholders to approve measures that will effectively increase the amount of authorized common stock to provide for up to 4,345,514 Class A convertible preferred shares, with a par value of $1.00, to convert into the company's common stock, with a par value of 1 cent.
(Reporting by Carey Gillam; Editing by Lisa Von Ahn, Dave Zimmerman) Keywords: YRC/ (carey.gillam@thomsonreuters.com; +1 913 663 2658; Reuters Messaging: carey.gillam.reuters.com@reuters.net ) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.