YRC warns of drop in book value

YRC warns of drop in book value Freight transportation conglomerate YRC Worldwide is investigating the possibility of taking a non-cash impairment charge to cover the loss of goodwill value for its national and regional trucking segments, as well as YRC Logistics, it said Wednesday in a filing with the Securities and Exchange Commission.
   The Overland Park, Kan., company said it is reevaluating its worth ahead of its upcoming third quarter results in light of worsening economic conditions.
   On Tuesday, YRC reaffirmed in a press release that it expects to have positive free cash flow in the third and fourth quarters, significantly reduce its debt and comply with debt levels in its credit agreement. The company borrowed heavily for the large acquisitions of Roadway Express and USF Corp. earlier this decade.
   Several analysts have raised concerns in recent weeks about the company’s financial health and liquidity after it drew down $325 million last week to help pay off senior notes that were coming due on Dec. 1 and May 1.
   YRC has seen its stock value drop from $27.12 per share to $6.32 per share, or 77 percent, in the past year. It took a $782 million impairment charge in the fourth quarter of 2007 and last month warned of a slight operating loss in the third quarter. The company, whose list of brands include Yellow Transportation, Roadway, Reimer Express, USF, and New Penn, lost $638 million in 2007 and $46 million in the first quarter before moving into the black in the second quarter.
   Zollars, in a roundtable discussion at the Council of Supply Chain Management Professionals conference in Denver, said the U.S. economy is in for a tough period.
   “I don’t look for the turnaround in the economy any time soon,” he said. The recession in 2001-2002 was sharp compared to the current recession that feels more like “death by a thousand cuts.
   “This is going to be a sustained downturn and I think we’re going to get out of it gradually.” ' Eric Kulisch