YRC reports progress in financial talks
YRC Worldwide Inc., the parent of Yellow Transportation, Roadway, New Penn, and several other trucking and logistics companies, said it has “completed an important step toward finalizing an amendment with its banking group by obtaining waivers under its credit facilities.”
The Overland Park, Kan.-based company said its banking group provided waivers for the credit facilities until mid-February to allow sufficient time to amend the facilities and renew an asset-backed securitization facility.
As of Dec. 31, the company had about $300 million of cash and expects to generate additional cash from sale and leaseback transactions, including its pending transaction for $150 million, and proceeds from sales of excess facilities, while reducing its 2009 equipment purchases due to the integration of its national companies. The company also recently announced ratification of a 10 percent reduction in union wages that is targeted to result in annual cost savings of $220 million to $250 million in addition to the $75 million to $85 million in savings from non-union compensation reductions that were effective Jan. 1.
The company said that when combining these cost savings with the planned run rate of $200 million of operating income from the integration of the Yellow Transportation and Roadway networks, it expects to improve its operating performance by around $500 million going into 2010.
“This is another indication that our banking group supports the strategic actions we are taking and is working with us to provide the flexibility we need during this economic recession,” said Bill Zollars, chairman, president and chief executive officer of YRC Worldwide. “We continue to take the appropriate steps to improve our financial position and enhance our service to our customers. The operating environment remains challenging but with the measures we are taking, including removing nearly half a billion of cost, we are confident that we can come out of the recession as a stronger organization.”
