YRC Worldwide has done something it hasn’t in quite a while: posted positive first quarter financial numbers.
While consolidated operating revenue for the first quarter was $1.162 billion, 2.7% lower than the $1.194 billion reported in the first quarter of 2012, consolidated operating income increased from a loss of $48.8 million to income of $9.9 million, or a $58.7 million increase for the parent of several less-than-truckload carriers.
This is the first time in six years that the company reported consolidated positive first quarter operating income. Operating income in 2013 included a $4.5 million gain on asset disposals and in 2012 included an $8.3 million loss.
The company reported earnings before interest, taxes, depreciation and amortization for the first quarter of $60.7 million, a $45.4 million improvement over the $15.3 million adjusted EBITDA reported for the first quarter of 2012.
"These results are due to a rational pricing environment for both YRC Freight and the regional segment, and the productivity improvements along with the customer mix management effort at YRC Freight specifically,” said James Welch, chief executive officer. “We still have significant opportunity for further improvements, and as we move throughout 2013, we will continue to focus on providing premium services to both the regional and long-haul segments of the LTL market and growing the business."
In a statement, the company noted for the first time since 2007, YRC Freight reported positive operating income in the first quarter. The $2.4 million of operating income is a $58.5 million year-over-year increase and the third consecutive positive operating income quarter reported by YRC Freight. The operating ratio of 99.7 is a 740 basis point improvement over the comparable prior year period due to a 3.4% increase in revenue per hundredweight and improved productivities.
"Our focus on improving network efficiency and managing customer mix throughout 2012 continues to pay dividends and drive our improved operating results," said Jeff Rogers, president of YRC Freight. "We have made significant improvement in customer service, safety and freight-handling efficiencies, but we still have room to improve," Rogers said.
Very recently the company announced a network optimization plan for YRC Freight, designed to improve its operational performance.
"This is one of the most significant leaps in network efficiency that we have implemented in several years and we estimate gross annual savings to be approximately $25 to $30 million. We will increase density in the network, have fewer touches of shipments and reduce empty mileage," said Rogers. "These network enhancements will be the foundation for continuous improvement in YRC Freight's year of performance.’
Welch added that YRC regional carriers continue to deliver “solid results.”
"For the first quarter of 2013, our regional group reported operating income of $12 million, a $600,000 increase over the same period in 2012, and delivered a 97.1 operating ratio for the quarter, which was better than most non-union public companies in the LTL industry,” he said. “Each quarter they continue to build on their momentum and find ways to increase efficiencies and productivities to improve operational performance. I am pleased with the results the Holland, Reddaway and New Penn teams have delivered.”
Further information is on the YRC Worldwide website.