Less-than-truckload (LTL) carrier YRC Worldwide (NASDAQ: YRCW) reported a second-quarter loss of $37.1 million, or $1.09 per share, compared to consensus estimates ranging from a loss of $1.38 to a loss of $1.66 per share.
The company announced on July 1 that it had secured a $700 million two-tranche treasury loan under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), allowing it to repay delinquent health care payments and update aging equipment. In return, the government received a 30% stake in the company.
YRC also amended its credit agreement, waiving its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) covenant until the end of 2021. At that time, the carrier will be required to generate last 12 months (LTM) adjusted EBITDA of $100 million. The covenant will increase in steps to the old level of $200 million by the end of June 2022.
At the close of the second quarter, YRC generated LTM adjusted EBITDA of $183.1 million.
“It is a new day at YRC Worldwide. During this pandemic and historically difficult economic backdrop, we were able to secure financing that not only took care of our employees’ healthcare coverage but also will allow us to significantly upgrade the condition, age and efficiency of our rolling stock. We were also able to gain additional covenant relief and maturity extension of our other substantive debt instruments simultaneously,” stated CEO Darren Hawkins in the press release issued at the market close on Monday.
The company reported a 20.2% year-over-year revenue decline to $1.015 billion as LTL tonnage fell 14.8%, with revenue per hundredweight, or yield, excluding fuel surcharges declining 2.6%. YRC reported a 100.5% operating ratio, 160 basis points worse year-over-year.
The company will host a call at 5 p.m. Monday to discuss these results with analysts. Stay tuned to FreightWaves for more coverage on YRC’s earnings report.