YRC Worldwide Reports Second Consecutive Quarter of Positive Operating Income; Regional Transportation Delivers a 93.5 Operating Ratio

YRC Worldwide Inc today reported financial results for the third quarter of 2012.
Consolidated operating revenue for the third quarter of 2012 was $1.237 billion, 3.1% lower than 2011, and consolidated operating income increased $53.4 million to $27.3 million, which included a $2.3 million gain on asset disposals. This is the second consecutive quarter that the company has reported income from operations. As a comparison, the company reported consolidated operating revenue of $1.276 billion for the third quarter of 2011 and a consolidated operating loss of $26.1 million, which included a $10.8 million gain on asset disposals. 
The company reported, on a non-GAAP basis, adjusted EBITDA for the third quarter of 2012 of $78.8 million, a $24.1 million improvement over the $54.7 million adjusted EBITDA during the comparable period in 2011 (as detailed in the reconciliation below).
"Despite the current economic headwinds, we were able to increase profitability through a combination of pricing discipline, customer mix management and an unrelenting focus in the areas of safety, costs, and operational fundamentals," stated James Welch, chief executive officer of YRC Worldwide.  "Since the new board of directors and management team were put into place in the third quarter of 2011, adjusted EBITDA has increased over each comparable prior year’s quarter, and we have most recently generated two consecutive quarters of positive consolidated operating income.  For the first time in four years, excluding second quarter of 2010, which included an $83 million non-cash reduction in equity-based compensation expense, we are reporting positive operating income in each of our subsidiaries.  I am encouraged with the steady progress we’ve made throughout the year and remain committed to the execution of our strategy.
"I want to especially thank and recognize our employees who are embracing our turnaround efforts and working more safely now than at any time in our recent history," Welch continued.  "We are solely focused on the North American LTL market and are working diligently to remove any distractions that might keep us from dedicating 100% of our time and energy to improving the operating results and service levels at YRC Freight and the Regional Transportation companies.
"We continue to produce results slightly ahead of our forecast and remain intensely focused on execution at each of our operating companies.  We are dedicated to delivering freight at a level that brings value to our customers and providing high-quality, consistent service," stated Welch.
Key Segment Information
Regional Transportation third quarter 2012 compared to the third quarter of 2011:
Operating revenues up 3.1% to $417.3 million
Tonnage per day up 0.3% and shipments per day down 0.4%
Revenue per hundredweight up 2.9% and revenue per shipment up 3.6%
YRC Freight third quarter 2012 compared to the third quarter of 2011:
Operating revenues down 2.6% to $819.5 million
Tonnage per day down 4.6% and shipments per day down 4.5%
Revenue per hundredweight up 3.4% and revenue per shipment up 3.2%
"Our Regional carriers delivered a solid 93.5 operating ratio for the third quarter and performed better than almost every other public company in the industry.  They provide best-in-class service and continue to build on their profitability with operational improvements and efficiencies.  These companies know how to deliver results, and with the dedication and enthusiasm of their employees, they continue to positively comp year over year.  I’m very proud of the accomplishments of the Holland, Reddaway and New Penn teams," Welch said. 
"YRC Freight recorded positive operating income for the first time in four years, excluding second quarter of 2010, which included a $64 million non-cash reduction to its equity-based compensation expense.  The improvement in profitability is the result of the continuation of our strategy to improve our customer mix and an emphasis on yield and productivity improvements," stated Welch.  "I am encouraged, but not satisfied, with the improvement in their operating ratio.  While I am confident they will continue to improve on their performance, there is still much to do at YRC Freight in order to reclaim their position as an industry-leading LTL carrier."
"We continue to decrease costs while simultaneously improving customer service by optimizing the network and reducing transit times across thousands of lanes in our LTL network," said Jeff Rogers, president of YRC Freight.  "We recently recalibrated our network to reduce handling of shipments and improve service time but there’s additional work to be done with freight flow alignment.  Maynard Skarka joined us last month as chief operations officer to lead our network and operations teams.  His expertise will help build the link between operational efficiencies and customer service," Rogers stated.
"I am extremely pleased with the progress we have made and continue to make with our safety initiatives, which are reducing the overall frequency of our workers‘ compensation claims," Welch said.  "Given the investment in our people and their safety, we continue to meaningfully close more claims than are opened and have the fewest number of open claims today since we started tracking the information in 2000.  We are changing the culture across the organization and we see employees embracing the change by doing the right things every single day," stated Welch.
At September 30, 2012, the company’s liquidity, including cash, cash equivalents and availability under its $400 million multi-year asset-based loan facility (ABL), was $237.6 million.  The ABL borrowing base was $375.9 million as of September 30, 2012 as compared to $360.2 million as of June 30, 2012. As a comparison, the company’s liquidity, including cash, cash equivalents and availability under its ABL was $248.7 million at June 30, 2012.  For the nine months ended September 30, 2012, cash used in operating activities was $48.0 million as compared to $52.8 million for the nine months ended September 30, 2011, an improvement of $4.8 million.  This improvement in cash used in operations in 2012 was inclusive of a year-over-year increase of $46.8 million of cash paid for interest, $21.4 million of cash paid for letter of credit fees, $40.3 million of cash paid to multi-employer pension plans and $40.7 million of cash paid to single-employer pension plans that was not paid in the prior comparable period.
"Total liquidity only decreased approximately $11 million since the end of last quarter to $238 million which speaks to our continued operational improvement and effective working capital management," stated Jamie Pierson, chief financial officer of YRC Worldwide. 

Quelle: eyefortransport

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