YRC Worldwide (NASDAQ: YRCW) posted a $31.7 million consolidated operating loss on first-quarter revenue of $1.182 billion, which declined slightly from first-quarter 2018 revenues of $1.215 billion. In first quarter 2019, net loss was $49.1 million compared to a net loss of $14.6 million in first quarter 2018.
Zacks Consensus estimate was for an earnings per share (EPS) loss of $0.73, but the company reported a loss of $1.12 EPS.
The consolidated operating ratio for first quarter of 2019 was 102.7 compared to 100.4 in first quarter 2018. The operating ratio at YRC Freight was 102.8 compared to 100.9 for the same period in 2018. The Regional segment’s first quarter 2019 operating ratio was 101.6 compared to 98.9 a year ago.
Labor uncertainty and severe weather impacted the company’s revenues, CEO Darren Hawkins said. The company recently reached a new labor deal with three of its operating units. The contract covers workers at YRC Freight, YRC’s long-haul LTL unit, and at Holland and New Penn Motor Express, two of its three regional units. Workers at the third YRC regional unit, Reddaway, are governed by a separate contract.
The contract, which will be retroactive to April 1, 2019, calls for a $4 per hour wage increase spread over five years, equal to an 18 percent hike increase over the contract’s life. YRC will increase its contribution to the workers’ health and welfare plan and will return of one week’s paid vacation that had been conceded in 2010.
“Our primary focus during the first quarter was securing a new labor agreement that was scheduled to expire on March 31, 2019. I am pleased to announce that on May 3, 2019, our employees approved the national agreement and 26 of the 27 applicable supplemental agreements,” said Hawkins. “Leading up to the approval of the five-year agreement, we experienced the effects of some customer concerns around the uncertainty of the negotiations process. While we cannot precisely quantify the revenue loss related to the labor agreement, our first-quarter results were adversely impacted.”
Hawkins added that nearly half of the quarter was impacted by weather for its YRC Freight and Holland operations. Holland was significantly impacted during a two-week period in late January, in which more than 25% of its’ network was down or severely limited, he said.
On a non-GAAP accounting basis, YRC Worldwide generated consolidated Adjusted EBITDA of $30.1 million in first quarter 2019, a decrease of $15.6 million compared to $45.7 million for the same period in 2018. Last twelve month (LTM) consolidated Adjusted EBITDA was $321.9 million compared to $276.7 million a year ago.
The total debt-to-Adjusted EBITDA ratio for first quarter 2019 improved to 2.76 times compared to 3.32 times for first quarter 2018.
At YRC Freight, first-quarter 2019 less-than-truckload (LTL) revenue per hundredweight, including fuel surcharge, increased 5.4% and LTL revenue per shipment increased 3.6% when compared to the same period in 2018. Excluding fuel surcharge, LTL revenue per hundredweight increased 5.8% and LTL revenue per shipment increased 3.9%.
At the Regional segment, first-quarter 2019 LTL revenue per hundredweight, including fuel surcharge, increased 3.8% and LTL revenue per shipment increased 3.7% when compared to the same period in 2018. Excluding fuel surcharge, LTL revenue per hundredweight increased 4.2% and LTL revenue per shipment increased 4.1%.
First quarter 2019 LTL tonnage per day decreased 5.8% at YRC Freight and decreased 7.5% at the Regional segment compared to first quarter 2018. Total shipments per day for the first quarter 2019 declined 4.1% at YRC Freight and 7.6% at the Regional segment.
“As we move through 2019, we will continue to prioritize yield over tonnage. We believe the new labor agreement provides both long-term value and opportunity for our employees, our customers, and our shareholders and it will be our number one priority to execute on the new contractual operational capabilities.
“At the very core of our 2019 strategy is network optimization. The initiative has multiple layers – with the primary objectives of enhancing service, creating opportunities for productivity improvements, and streamlining our cost structure as we seek to eliminate inefficiencies across the network, providing the potential for revenue growth and margin expansion,” said Hawkins.
The company spent $32.6 million in capital expenditures in the quarter, primarily for new tractors, trailers and technology. It also invested in new operating leases for revenue equipment with a capital value equivalent of $25.3 million.
An $8.2 million non-cash impairment charge at YRC Freight was taken to reflect the write-down of an intangible asset as a result of a rebranding and discontinued use of a tradename.
YRC Worldwide continues to hold $884.5 million in outstanding debt, down $34.2 million compared to the end of the first quarter of 2018. The company’s available liquidity, which is comprised of cash and cash equivalents and Managed Accessibility under its ABL facility totaled $155.7 million compared to $117.2 million as of March 31, 2018, an increase of $38.5 million.
For the three months ended March 31, 2019, cash used in operating activities was $41.7 million compared to cash used in operating activities of $3.7 million for the three months ended March 31, 2018.
Mark Lewis
What should be noted is that overtime, health benefits, paid breaks amd other similar things, that some are calling things of the past, should not be things of the past. Those workers who came before and fought for them, did it not only for themselves but for workers of the future. I started in the trucking industry in 1991, my dad drove for 27 years until he died at age 45. He died a teamster, started out nonunion, and knew and understood and appreciated the union difference. My stepdad retired from AC Sparkplug, UAW member and often said it would have been nearly impossible to retire after 34 years (bad heart) at GM without a union.
I have been on both sides of the aisle, union and nonunion. I was discharged recently by a nonunion carrier for having cancer, and I am not making that up. Had it been a union shop, that would not have happened.
One thing that is most important is that whether union or nonunion, us drivers, and the other workers as well, i.e. dock, yard dogs, mechanics, etc, need to stick together. Agree to disagree, it’s still the same old story, us versus them, us versus the man, the company.
One thing that did more damage than most other things was deregulation of the trucking industry. It also did in the airline industry, remember Eastern and Braniff airlines, likewise in the banking industry, remember the savings and loan disaster several years ago? Deregulation left is with an industry where it’s kill or be killed on a tremendously dramatic scale. It brought us the rise of the JB Hunts, Schneiders, etc. Remember one more piece of the puzzle, wages haven’t grown as they should have. Houses and cars have risen in price four to six times between 1978 and 2018, yet wages have barely doubled. Why is that? It takes two full incomes to do what one income used to do.
I personally think it’s disgusting we have to work at the wages we have been, pensions becoming a thing of the past, fighting for good benefits, etc. I worked my last job where we had good benefits and made good pay considering that 70k plus is considered great but in reality i should have been making double. We all should be making double. And two tier wage systems are not cool either.
I believe in a fair days work for a fair days wage. I don’t see anything wrong with having a yard jockey and dock workers, with the driver not having to load or unload his own trailer. Have you noticed in many jobs that the companies are trying to eliminate many a job and also automate as much as possible? Pile the work up on the remaining workers. And what is wrong with overtime pay, if you work hard and work over 8 hours or over 40 hours, getting time and a half? The 8 hour work day and the 40 hour work week were two things that were hard fought for. If you go back to the days when people were fighting for these two things, among others, we also saw the implementation of child labor laws. In Brazil in certain supermarket chains the cashiers are forced to wear diapers, no bathroom breaks allowed. In this country, just a few decades ago, you could be fired for taking a bathroom break, there were no things as sick days or sick pay, also called personal leave.
I will get off my soap box now, but I hope that this makes some sense to some. We should all have what the Teamsters, the UAW, etc fought so hard for.
Good, non-lazy teamster
The employees have unfortunately made the teamsters and unions across the board look terrible. Not all but many of the teamsters at all the YRcW companies have had a piss poor attitude and it shows to customers and to other employees moral. Many of them are under the impression that they are “owed something” by the company for concessions taken 10 years ago. What they fail to understand is that in a primarily non-union industry now, the work rules for yrcw teamsters is completely different from literally every other competitor. It takes yrcw laying 3 men full time wages to do what 1 man does at FedEx, ups, Estes, ect. The work rules make yrcw separate from its competitors by protecting specific job classifications, this making the flow of freight slower at these yrcw companies because the freight must pass through the “proper union flow”, drivers don’t do their own drop and hooks, only jockeys can perform yard work, and only sock workers can word the dock. While this is going on, the city driver at Estes is loading his truck, doing deliveries, coming back and backing his trailer into a door and loading/unloading freight. Yrcw teamster, even with concessions, make more than most companies when healthcare and pension (although smaller now) contributions are factored in. These guys and gals don’t want to hear this hard truth, but it’s the truth nonetheless. It’s great that this new contract passed. It was very fair and generous. The teamsters better shape up and realize that the cushy way of life is over in freight. Many wouldn’t make it a second out there at another company. They don’t realize how great they have it here at yrcw. If they want to make the same hourly/cpm wages as other companies, the daily work load would have to increase tremendously in order for yrc to stay competitive, and for many lazy teamsters, this is not what they want either. And even with the concessionary wage, yrcw teamsters make more than most other companies regardless of what the hourly wage says on paper. Most other companies don’t pay overtime and healthcare is expensive weekly. The bottom line is: yrcw teamster got it made. They better figure out real fast that times have a-changed. Be grateful for the cushy Job you got. You guys wouldn’t last a second out in the real world OR make nearly as much money. Wake up bad apple teamsters!
Pissed Off Employee ☹️
Good, non-lazy teamster
Everything about your comment is incorrect. I mean everything! Please don’t comment on something that you know nothing about. If this place is so wonderful like you put it, then you are welcome to come and apply for a job. Trust me they are hiring. After 6 months of working here come back and post about your experience here.
Good, non lazy teamster
Pissed off teamster,
I have been here at yellow/ yrc for 27 years. You are the one that is incorrect. If you don’t like hearing the truth I recommend not posting anymore or even better finding another job. Most people are tired of hearing guys like you crying all the time. If you think you’re getting ripped off and can do better somewhere else – Get to stepping cupcake.
Good, non-lazy teamster
Pissed off teamster,
I’ve been at yellow-yrc for 27 years. It’s you that don’t get it. Please refrain from posting about something you do not understand. If you don’t like the company, and think you can do better, get to steppin cupcake
Anonymous
Not completely accurate. A two tier pay system has left many workers with only a $1.50 increase for 5 years and maxing out at $20.50. Only higher seniority employees received the $4.00 increase over five years.
Marvin Sebelius
…..it’s not an 18 percent wage increase, it’s only a 3 percent increase ,cause we lost 15 percent 10 years ago
Pissed Off Employee ☹️
Please don’t forget the 2 years we went without a raise. 35 cents each year. In return for helping this multi billion dollar company they gave us a $650 dollar bonus and they tax the hell out of that bonus. They took our our 15% as fast as they can get it. But, we now have to wait another 5 years to get it back. It isn’t this pathetic ❓and where the hell is the guys with the horses ? ? ????
?????????????
They haven’t been seen at my terminal have anyone seen them? Oh they only come around when is election time ? .
Pissed Off Employee ☹️
15 % Pay Cut
2 years with NO pay increase
No pension after 2025. ( Out Of Money )
I been supporting a Multi Billion Dollar company for the pass 10 years with more than $100,000 dollars of my money.
While YRC is out of control giving out multi million dollar bonuses and on a crazy shopping spree, buying everything new. I Thought the reason for the 15 % Pay Cut was to pay off the debt ?
Good, non-lazy teamster
Whaaaaa whaaaa! Just leave if you think you can be better off somewhere else
Pissed Off Employee ☹️
Good, non-lazy teamster
People are leaving faster than they can be replaced! Office staff, Drivers, Mecanics, Dock workers. The average person that they hire within a week they quite. To you this is a joke but these were
Some of the very best workers this company had, they were part of the YRC family. “ Family “ something this company doesn’t really care about. Like the others I will be leaving in a few weeks. My family comes first ?. Thank you for your concern
Pissed Off Employee ☹️
What’s the real reason for the lower revenue ❓
Does the millions of dollars that were given out in February of this year, almost $4.5 million have anything to do with it❓
What about the out of control spending. New tractors, trailers, forklifts, straight trucks, yard trucks, pallet jacks,
Lift gate trailers, hand trucks I can keep going for hours. All this stuff was not necessary all at once. Was this the reason for the lower revenue ❓
Or maybe it’s because the employee are sick and tired of being treated like garbage ? Sick and tired of being stab in the back ? by the company and the union ? and We just don’t give a shit about this place. ?☹️
Good, non-lazy teamster
Stop being a cry baby and get back to work