YRC Freight CEO James Welch said while business in the first half of the year kept pace with its forecast, improvements are taking longer than originally anticipated at the national less-than-truckload carrier.
by Staff
September 17, 2014
Photo: Evan Lockridge
2 min to read
Photo: Evan Lockridge
Business is improving at the trucking holding company YRC Worldwide but not as quickly as officials would like, following several years of huge losses.
In a statement released Tuesday, the company announced it launched an amendment to its term loan credit agreement, lowering its leverage ratio.
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YRC Freight CEO James Welch said business in the first half of the year kept pace with its forecast, but improvements are taking longer than originally anticipated at the national less-than-truckload carrier.
YRC's regional carriers (Holland, New Penn and Reddaway), on the other hand, continue to perform near expected levels and in the range of the market's margins, he said.
“While we project to be in compliance with our third quarter leverage ratio covenant, we are launching the amendment now to take uncertainty out of the market and to allow the company to continue making progress on its performance and yield improvement plans.”
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In the third quarter he said YRC Freight reported total revenue per hundredweight increases of 2.8% in July and 3.3% in August. It also reported tonnage per day increases of 2.4% in July and 0.8% in August. YRCW’s regional operations reported total revenue per hundredweight increases of 1.5% in July and 0.6% in August and tonnage per day increases of 4.2% in July and 3.7% in August.
“We are continuing to experience these same trends in the month of September at each of our operating segments," said Welch.
YRCW expects to report third quarter adjusted earnings before interest, taxes, depreciation and amortization of approximately $75 million to $80 million and operating income of approximately $22 million to $27 million.
"This projected adjusted EBITDA is approximately $13 million to $18 million higher than our reported adjusted EBITDA for third quarter 2013 of $61.8 million and our projected operating income is approximately $16 million to $21 million higher than our reported operating income from third quarter 2013,” said Jamie Pierson, chief financial officer of YRC Worldwide.
Investors no doubt liked what they heard, with YRCW’s stock increasing nearly 18% on Wednesday, closing at $23.36 per share at Wednesday’s closing bell.
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YRCW competitors have also seen better numbers so far this quarter.
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