YRC Worldwide
YRC Worldwide Inc. lost more than double the amount of money than it did a year ago, marking 10 consecutive years the less-than-truckload carrier ended the first quarter in the red.
The Overland Park, Kan., company lost $25.3 million in the first three months of 2017, shedding 78 cents per share, much worse than Bloomberg News forecast of 37 cents based on a survey of industry analysts.
One year ago, YRC lost $12 million, or 37 cents.
“Although we are somewhat disappointed in our [first-quarter] consolidated results, we firmly believe the fundamentals of our business remain intact and, in fact, are improving, which we expect will result in positive financial performance moving forward based on the investments we’ve made in technology,” CEO James Welch said in a conference call with industry analysts.
Top-line revenue improved 4.5% to $1.17 billion, topping the $1.15 billion forecast, but expenses rose at a higher 6% rate. The result was a $3 million operating loss, down from a $13.4 million in operating income one year ago.
YRC lost $2.7 million on the disposal of property versus a $300,000 gain a year ago. Salaries, wages and employee benefit costs climbed to $721.7 million from $698.1 million. Operating expenses and supply costs rose from $216.3 million from $190.2 million.
Welch said he expected the first quarter would be sluggish, pointing to the amendment to a credit agreement. YRC didn’t meet the financial ratio between debt and adjusted earnings before interest, tax, depreciation and amortization, or EBITDA, that the banks required, but the amendment waived the carrier’s violation.
Welch said that March’s EBITDA was better than a year ago.
“During the first quarter, we took steps to extract cost out of the business,” Welch said. “In addition to savings from eliminating approximately 180 positions, we reduced the utilization of external professional services and increased collaboration across all four operating companies.
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