YRC posts loss, gets debt deal; stock slides
No. 1 U.S. trucking company YRC Worldwide Inc
We have seen some stabilization but we are not planning on an economic recovery in 2009 or anything in 2010, Chief Executive Bill Zollars told Reuters in a telephone interview. It would be nice if it happens, but we're not planning on it.
YRC also said it had a new agreement with lenders to lift some performance-related loan covenants.
The second-quarter loss of $309 million or $5.20 per share compares with a net profit of $35.8 million, or 62 cents per share, a year earlier.
Revenue fell 45 percent to $1.33 billion from $2.4 billion.
The quarter included restructuring charges as the company acted to adapt to falling demand. Excluding those charges, YRC posted a loss for the quarter of $3.53.
CEO Zollars told investors on a conference call that the company was not banking on economic recovery to boost its performance.
As we move into the third quarter, the global recession that has plagued our industry for the past few years appears to have stabilized, but we don't expect much growth from the economy in 2009, or for that matter in 2010, Zollars said.
YRC ended the quarter with $218 million in cash and available capacity under its credit facilities.
YRC, which has been working to restructure its debt, said on Thursday its lenders had agreed to eliminate their third-quarter target on earnings before interest, tax, depreciation and amortization, and had established a fourth-quarter covenant requiring $15 million in EBITDA.
The agreement also sets a target of $20 million in EBITDA for the first quarter of 2010.
Like the rest of the trucking industry, the company, based in Overland Park, Kansas, has been hard hit by the recession, which has driven down demand for its services and pounded pricing.
YRC is a less-than-truckload company. Less-than-truckload operators consolidate smaller loads into a single truck.
So far this year YRC also has secured numerous amendments to its $950 million credit facility from creditors and persuaded the Central States multi-employer pension fund to take property instead of cash for pension payments.
The company also has worked to streamline its national network by shutting facilities and shedding jobs.
Earlier this year, the company's unionized workers approved a 10 percent wage cut in return for a 15 percent stake in YRC. The company and the Teamsters union have reached a tentative deal for a fresh 5 percent wage cut in return for options to buy 20 percent of YRC stock.
The trucking company said that results of voting by workers on that deal were expected in early August.
CEO Zollars told Reuters that early indications from the Teamsters' leadership have been positive on that vote.
If approved, YRC has said the deal would save it $45 million per month, rising to $50 million per month in 2010.
YRC shares fell to $1.47 in post-market trading from a close of $1.69 on the Nasdaq.
As of Thursday's close YRC shares were down some 42 percent so far this year, while the Dow Jones transportation average <.DJT> had lost less than 1 percent of its value.
(Reporting by Scott Malone and Nick Carey; Editing Bernard Orr, Leslie Gevirtz)
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