Thursday, August 03, 2017
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
Tuesday, August 01, 2017
The following is a statement by Teamsters General President James P. Hoffa on the approval of legislation by the House Energy & Commerce Committee yesterday that would begin the process of streamlining rules around the testing and development of certain autonomous vehicles.
“The Teamsters Union will continue working with lawmakers to improve the initial legislation that was recently passed out of the House Energy & Commerce Committee. Much work remains to be done and the bill faces a long path forward where numerous issues must be addressed. However, the Teamsters commend the committee and members of Congress for recognizing that a starting point for any discussion on this subject was that no legislation should impact commercial motor vehicles or traditional commercial drivers.
“The wide range of issues that are inherent with vehicles used for commercial purposes warrants an entirely separate discussion and one that the Teamsters will be at the center of. Congress has wisely recognized that any such dialogue is entirely premature and must be done gradually, in the public view, and with the full engagement of all stakeholders. The millions of workers who make their livelihood in these industries will have an active role to play in shaping the future of their jobs and their industries. It is vital that Congress ensure that any new technology is used to make transportation safer and more effective, not used to put workers at risk on the job or destroy livelihoods and chip away at the middle class.”
Holland, a leader in Central and Southeastern next-day delivery, has been named 2017 LTL Carrier of the Year by True Value, one of the world's largest retailer-owned hardware cooperatives. Holland received this inaugural award at the carrier conference held at True Value headquarters in Chicago on June 28.
"Our entire team is honored to receive this distinction from True Value and Holland is proud to be its most trusted LTL transportation partner," said Holland Senior Vice President of Sales and Marketing Jim Ferguson. "Striving to meet and exceed our customers' expectations is always our main goal and this award motivates us to continue providing our best to all of our customers."
The winner was selected based on the following categories: claims ratio, on-time service, customer service and communication, and positive comments on the monthly feedback sheets.
"As our financial performance has improved in recent years, we reduced our debt to the lowest level in more than a decade while at the same time reinvesting back into the Company," said James Welch, chief executive officer of YRC Worldwide. "Extending the term loan is an important step as we continue to position the Company for long-term success. We believe it is prudent to take the refinancing risk off the table before the term loan matured in early 2019, to focus on executing operationally and improving our financial results. We plan to continue evaluating additional opportunities to strengthen the Company for our customers, employees and investors," concluded Welch.
In addition to the extended maturity, the most substantial changes as a result of the amendment are:
A reduction of the outstanding principal to $600 million following a $35.2 million payment at the time of closing the amendment;
An increase in the annual amortization from 1% ($7 million) to 3% ($18 million);
An increase in the interest rate from LIBOR + 750 basis points to LIBOR + 850 basis points; and
If the Company's Contribution Deferral Agreement notes are not extended to at least late October 2022, the term loan maturity will be reset to within 60 days before the CDA's scheduled maturity.
"Extending the maturity of the term loan and reducing the outstanding principal considerably strengthens our capital structure," said Stephanie Fisher, chief financial officer of YRC Worldwide.
"With the successful extension of the term loan, we have met the conditions for extending the maturity of our asset based loan facility from February 2019 to June 2021. I would like to thank our lenders who have been supportive of our long-term vision for the Company," concluded Fisher.
Second Quarter 2017 Earnings Conference Call
On Thursday, August 3, 2017, at 4:30 p.m. ET, company executives will host a conference call with the investment community to discuss second quarter 2017 financial results. Second quarter earnings will be released the same day, Thursday, August 3, 2017, following the close of the market.
The call will be webcast and can be accessed live or as a replay via YRC Worldwide's website www.yrcw.com.
ArcBest said its second-quarter revenue was $720.3 million, up from $676.6 million in the same quarter this past year. ArcBest had reported a first-quarter loss of $7.4 million in May.
"We are pleased to see improved results in the second quarter," said Judy McReynolds, who is CEO and president at ArcBest.
The company reported revenue for ABF Freight, its asset-based freight business, was $514.5 million, an improvement from $486.2 million in the same quarter a year ago. Total shipments increased 3.5 percent to 1.37 million in the quarter, compared to 1.32 million a year ago.
Overall tonnage shipped dropped slightly but tons of shipments per day increased slightly because ArcBest billed one less half-day during the quarter.
ArcBest's consolidated asset-light division — formerly known as Panther Premium Logistics, ABF Logistics and ABF Moving — reported revenue of $175.9 million, up from $154.3 million in the second quarter of 2016. The asset-light maintenance division, FleetNet, reported revenue of $36.5 million, down from $41.7 million a year ago.
The total quarterly revenue for ArcBest's asset-light divisions was $212.4 million, up from $196.1 million a year ago.
ArcBest reported a 14.3 increase in revenue per shipment and a 4 percent increase in shipments per day in Expedite service. The company reported a 6.8 percent increase in revenue per shipment and 17.7 percent increase in shipments per day in its Truckload and Dedicated Truckload segments.
YRC Freight, the long-haul unit of less-than-truckload carrier YRC Worldwide Inc., is planning to add eight distribution centers (DCs) to its network, according to a proposal made public today. The additional DCs would handle 7,000 daily shipments that will be redirected from existing DCs.
Under the proposal, YRC Freight will open DCs in Columbus, Ohio; Hagerstown, Md.; Orlando, Fla.; Omaha, Neb.; Richmond, Va.; St. Louis; San Antonio, Texas; and South Bend, Ind. Once the DCs are added, Overland Park, Kan.-based YRC Freight will be operating 31 such facilities in the United States. The proposed change will add 962 dock doors to the carrier's network, it said.
YRC Freight said it regularly incurs severe backups at seven existing locations: Chicago; Charlotte, N.C.; Kansas City, Mo.; Akron, Ohio; Dallas; Indianapolis; and Harrisburg, Va. Adding the eight DCs will relieve freight-flow pressure at those facilities, especially during the hectic end-of-month and end-of-quarter periods, as well as during severe weather events, YRC Freight said in a letter to the Teamsters union dated July 25th.
Under the terms of their collective bargaining agreement, YRC Freight must inform the Teamsters of all planned operational changes. YRC Freight said it would implement the changes no sooner than Oct. 8. Although the union can offer input, there is little it can do to prevent the changes from taking place.
Below are links to the documents about both proposed changes in operations...