YRC Freight Completes Network Optimization
YRC Worldwide Inc. today reported financial results for the second quarter 2013.
Consolidated operating revenue for the second quarter ending June 30, 2013 was $1.243 billion, or 0.7% lower than the $1.251 billion reported in the second quarter of 2012 and consolidated operating income decreased slightly from $15.5 million to $14.3 million, or by $1.2 million. Operating income in 2013 included a $1.3 million loss on asset disposals compared to $6.5 million gain on asset disposals in 2012.
The company reported, on a non-GAAP basis, adjusted EBITDA for the second quarter of 2013 of $74.7 million, a $4.6 million improvement over the $70.1 million adjusted EBITDA reported for the second quarter of 2012 (as detailed in the reconciliation below). Included in adjusted EBITDA for the second quarter of 2013 is a $6.3 million charge related to the network optimization that was implemented at YRC Freight in May 2013.
"As we move through 2013, we continue to make steady progress on our long-term objective of regaining a leadership position in the LTL industry. In the second quarter, we paved the way for future success by making investments in newly leased tractors and trailers, completing the rollout of mobile handheld productivity devices for our city drivers, and completing the second largest network optimization in YRC Freight history," said YRC Worldwide CEO James Welch. "While the Regionals continue to excel in their markets, YRC Freight faced some headwinds during the implementation of the network optimization plan. We recorded a one-time charge of $6.3 million related to the network optimization, which is a small investment in what we anticipate will be approximately $25 to $30 million in annual savings," added Welch.
"As we have said before, 2012 was a year of progress and 2013 is the year of performance, and we continue to deliver on that performance. Going forward, we remain focused on delivering incremental productivity improvements, consistent service and equally strong operational results. We are confident in the position of our company and believe we have opportunity to grow the business, improve profitability and deliver high-quality service for our customers," stated Welch.
"Additionally, we continue to see positive results from the safety initiatives we started in late 2011. The overall frequency of our workers' compensation claims is continuing to decline while we also continue to settle more claims than are filed. The net result is a reduction in the number of open claims and a reduction in our associated liabilities and outstanding letters of credit supporting these programs. In the second quarter alone, we were able to decrease our outstanding letters of credit by $43 million or 10% from $429 million to $386 million," said Welch.
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