Thursday, August 03, 2017
YRC Worldwide Reports Second Quarter 2017 Results
YRC Worldwide Inc. reported consolidated operating revenue for second quarter 2017 of $1.261 billion and consolidated operating income of $50.0 million, which included a $1.0 million gain on property disposals. As a comparison, for the second quarter 2016, the Company reported consolidated operating revenue of $1.208 billion and consolidated operating income of $57.2 million, which included an $11.1 million gain on property disposals.
In July 2017 the Company completed an amendment to extend the maturity of its Term Loan Credit Agreement from February 2019 to July 2022.
On a non-GAAP basis, the Company generated consolidated Adjusted EBITDA of $91.1 million in second quarter 2017 for an Adjusted EBITDA margin of 7.2% compared to $91.4 million and 7.6%, respectively, in the prior year comparable quarter (as detailed in the reconciliation below).
Last twelve month (LTM) consolidated Adjusted EBITDA is $277.5 million for an Adjusted EBITDA margin of 5.8% compared to $319.4 million and 6.8%, respectively, in 2016.
The total debt-to-Adjusted EBITDA ratio for second quarter 2017 was 3.61 times compared to 3.32 times for second quarter 2016.
Reinvestment in the business continued during second quarter 2017 with $22.7 million in capital expenditures and new operating leases for revenue equipment with a capital value equivalent of $6.9 million, for a total of $29.6 million.
The consolidated operating ratio for second quarter 2017 was 96.0 compared to 95.3 for the same period in 2016. The operating ratio at YRC Freight was 96.5 compared to 96.2 in the second quarter 2016 which included an $11.2 million gain on property disposals. The Regional segment's second quarter 2017 operating ratio was 94.6 compared to 93.2 in the prior year.
Second quarter 2017 tonnage per day increased 2.7% at YRC Freight and 3.6% at the Regional segment compared to second quarter 2016.
At YRC Freight, excluding fuel surcharge, second quarter 2017 revenue per hundredweight increased 1.1% and revenue per shipment was essentially flat with a decrease of 0.1% when compared to the same period in 2016. Including fuel surcharge, revenue per hundredweight increased 2.2% and revenue per shipment increased 1.0%.
At the Regional segment, excluding fuel surcharge, second quarter 2017 revenue per hundredweight increased 0.2% and revenue per shipment increased 1.9% when compared to the same period in 2016. Including fuel surcharge, revenue per hundredweight increased 1.3% and revenue per shipment increased by 3.0%.
Liability claims expense decreased by $6.3 million primarily due to certain prior year claims that unfavorably impacted second quarter 2016.
At June 30, 2017, the company had cash and cash equivalents and Managed Accessibility (as defined in the company's most recently filed periodic reports on Forms 10-K and 10-Q) under its ABL facility totaling $253.4 million compared to $278.8 million as of June 30, 2016.
For the six months ended June 30, 2017, cash provided by operating activities was $38.4 million compared to $47.5 million for the six months ended June 30, 2016.
"Following a couple of challenging quarters, the second quarter 2017 results include our efforts to return YRC Freight's year-over-year revenue per hundredweight, excluding fuel surcharge, to positive territory," said James Welch, chief executive officer at YRC Worldwide. "The consolidated quarterly results were also favorably impacted by our plan to streamline overhead costs, an increase in volume driven by an improving industrial economy and a decrease in liability claims expense. These factors helped offset contractual wage and benefit increases to deliver consolidated Adjusted EBITDA results that were consistent with last year. We continue to believe the fundamentals of our business remain intact and are improving," stated Welch.
"As we look to the second half of 2017, we expect that meeting our customers' needs, pricing for profitability and diligently managing costs should contribute to improved year-over-year financial performance. The industrial economy appears to be moving forward at a moderate pace and we continue to see signs of a stable pricing environment in the less-than-truckload sector.
"We constantly look for opportunities to enhance the Company's long-term success and last month we took another step in that direction when the term loan was amended to extend the maturity from February 2019 to July 2022. We were able to utilize our strong liquidity position to retire a portion of the term loan in conjunction with the refinancing amendment and reduced the outstanding balance to $600 million," concluded Welch.
Key Segment Information - second quarter 2017 compared to second quarter 2016