Struggling trucking company YRC Worldwide Inc. issued a muted outlook in an investor presentation, saying conditions appear to have stabilized but warning it sees "no sustained positive momentum" for the economy.
The presentation, dated Wednesday but posted on its Web site Tuesday, comes after it initiated a $536.8 million debt-for-stock swap on Monday viewed as key to its survival.
YRC shares ended down 7.3%, or 8 cents, at $1.02. The stock has plummeted 72% since early last week, when the Overland Park, Kan., company announced details of the highly dilutive exchange offer.
Under the plan, debt holders would control 95% of the company's stock if it goes forward successfully. Chief Executive Bill Zollars has defended the move as the linchpin in teetering YRC's effort to regain financial footing, and the company also has warned that it could file bankruptcy if the debt exchange isn't completed.
The exchange offer will expire at 11:59 p.m. EST on Dec. 7, unless YRC opts to extend it.
YRC made clear in the investor presentation--which was attributed to President Tim Wicks--that it expects little short-term help from the economy, in terms of the potential for an imminent rebound to fuel a business uptick.
The company said freight volumes have stabilized since the first quarter but haven't changed much since, aside from some seasonal movements. It said it has "no expectation of near-term growth" amid the challenging conditions.
Still, YRC was upbeat on the progress it has made to cut costs, improve its balance sheet and stay afloat. One slide, headlined "people said we couldn't do it," noted that "critics" have been wrong so far in predicting the company wouldn't achieve certain critical milestones.
Rumors of an imminent YRC bankruptcy have circulated for months as the debt-laden company has slashed jobs and sold real estate to raise money and cut costs while the weak economy sapped demand for freight transport. YRC is the largest independent player in the less-than-truckload shipping market, where multiple loads are consolidated onto single trucks.
YRC's exchange offer encompasses the company's 5% convertible notes due in 2023, 3.375% convertible notes due in 2023 and 8.5% guaranteed notes issued by subsidiary YRC Regional Transportation Inc. due April 15. Combined, the notes have a face value of $536.8 million, plus accrued and unpaid interest.