YRC Worldwide Inc. (YRCW) Company Brief
  • Stock Alert for YRC Worldwide Inc. (YRCW)
  • Stock Alert for YRC Worldwide Inc. (YRCW)
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    Stock Alert for YRC Worldwide Inc. ($YRCW)(D*)

    YRC Worldwide Inc. (NASDAQ: $YRCW)(D*)

    * Financial status indicator is deficient: Issuer failed to meet NASDAQ continued listing requirements

    YRC Worldwide Inc. (YRCW), a holding company through its wholly owned operating subsidiaries, offers the customers a range of transportation services. The Company’s operating subsidiaries includes YRC National Transportation (National Transportation), YRC Regional Transportation (Regional Transportation), YRC Logistics, and YRC Truckload (Truckload). National Transportation is the reporting unit for the transportation service providers focused on business opportunities in regional, national and international services. Regional Transportation is the reporting unit for the transportation service providers focused on business opportunities in the regional and next-day delivery markets. YRC Logistics plans and coordinates the movement of goods worldwide to provide customers a single source for logistics management solutions. Truckload reflects the results of Glen Moore, a provider of truckload services throughout the United States. As of December 31, 2008, National Transportation had 14,327 owned tractors, 2,348 leased tractors, 59,682 owned trailers, and 2,802 leased trailers. YRC Regional Transportation unit’s service portfolio comprise regional delivery that includes next-day local area delivery and second-day services, consolidation/distribution services, protect-from-freezing and hazardous materials handling, and other specialized offerings; expedited delivery, including day-definite, hour-definite and time definite capabilities; inter-regional delivery; cross-border delivery; and operation of USFNet.com and NewPenn.com e-commerce Web sites offering customized online resources to manage transportation activity.

    The Company was founded in 1924 and is headquartered in Overland Park, Kansas.

    Share Statistics (27-April-10) FY

    2007

    FY

    2008

    %

    Chg

    Q4 2008 Q4 2009 %

    Chg

    Symbol YRCW Revenue, $Mn 9.62B 8.94B 7.1% 1.93B 1.15B 40.4%
    Current price $0.72 Gross marg. 9.6% 7.0% 27.1% 0.5% 4.3% 760.0%
    52wk Range: $6.18-0.34 Oper. margin -5.9% -12.0% 103.4% -17.2% 9.6% 155.8%
    Avg Vol (3m): 41,389,200 Net margin -6.6% -10.9% 62.5% -12.6% 10.4% 182.5%
    Market Cap. 736.06M
    Dil. Shares Outst. 1.1B EPS, $ -11.17 -16.92 51.4% -4.14 -1.64 60.4%

    Source: Reuters.com, SEC Filings.

    Financial Summary

    YRCW recently reported year-over-year and continued sequential improvement in its fourth-quarter 2009 results. For the quarter ended December 31, 2009, the Company announced pre-tax income of $50 million that included a net gain on note exchanges of $194 million, lease termination charges of $8 million related to further optimization of the YRCW network, and severance charges of $3 million due to further headcount reductions. For the full year 2009, the Company reported a pre-tax loss of $899 million compared to a full-year pre-tax loss in 2008 of $1,147 million, including impairment charges of $1,023 million. For the fourth quarter of 2008, the Company reported a pre-tax loss of $353 million, which included impairment charges of $200 million.

    The Company reported an operating loss of $95 million for the fourth quarter of 2009, a continued sequential improvement from the third-quarter operating loss of $118 million, which included a net gain on property disposals of $11 million, following the sequential improvement reported for the second quarter, and a year-over-year improvement from the fourth quarter of 2008 operating loss of $335 million, which included impairment charges of $200 million.

    The Company has not provided after-tax earnings information in this release as it is currently completing its income tax provision. This delay is caused by the time required to complete a valuation analysis together with the underlying complexity of the accounting associated with the debt-for-equity exchange. The Company plans to include after-tax information in its 2009 Form 10-K filed with the Securities and Exchange Commission.

    New Capital

    The Company is executing on its plan to raise new capital sufficient to satisfy the remaining 2010 note obligations and is in advanced discussions with investors.

    Liquidity Update

    At December 31, 2009, the Company reported cash and cash equivalents of $98 million and unused revolver reserves of $160 million within the Company’s $950 million revolving credit facility. The Company also reported usage of $223 million under its $400 million asset-backed securitization facility. In addition, the Company has filed its 2009 estimated federal tax return using the newly available five-year carry-back legislation. YRCW expects to receive an $85 million cash refund during the first quarter of 2010, which the company would use, for operating liquidity.

    For the fourth quarter, the Company completed sale and financing leasebacks of $26 million and sold $27 million of surplus property. During 2009 the Company completed sale and financing leasebacks of $332 million and sales of surplus property of $133 million, and deferred union pension contributions of $171 million, all as part of the Company’s self-help liquidity plan.

    Key Segment Information

    Fourth quarter 2009 compared to the fourth quarter 2008:

    • YRC National Transportation total shipments per day down 39.9% and total revenue per hundredweight, including fuel surcharge, down 4.2%.
    • YRC Regional Transportation total shipments per day down 19.9% and total revenue per hundredweight, including fuel surcharge, down 7.7%.

    2010 Outlook

    Economic forecasts generally indicate a stabilizing economy during 2010 with modest growth prospects. The Company recently engaged an independent research firm to conduct a customer survey of transportation decision makers regarding their 2010 business outlook. Sixty-two percent said they were optimistic that their business volumes would increase this year. In addition, 85% said they intended to increase or maintain their YRCW shipments during 2010.

    Financial Strength (27-Apr-2010) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 0.83 1.45 1.48 0.75
    Current Ratio (MRQ) 0.85 1.48 1.85 0.89
    Long-Term Debt to Equity (MRQ) 559.71 27.39 88.55 145.67
    Total Debt to Equity (MRQ) 677.62 42.41 117.56 209.05

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    Source: www.ft.com

    Consensus Estimates Analysis

    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Jun-10 6 1,209.35 1,282.00 1,154.30
    Quarter Ending Sep-10 6 1,260.35 1,451.00 1,190.10
    Year Ending Dec-10 9 4,794.10 5,366.80 4,484.00 6,667.43
    Year Ending Dec-11 7 5,127.90 6,170.00 4,244.00
    EARNINGS (per share)
    Quarter Ending Jun-10 3 -0.69 -0.52 -0.96
    Quarter Ending Sep-10 2 -0.72 -0.59 -0.85
    Year Ending Dec-10 4 -2.89 -1.79 -3.72 -1.35
    Year Ending Dec-11 4 -0.07 0.12 -0.17 0.54
    LT Growth Rate (%) 1 15.00 15.00 15.00 10.67

    Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=YRCW.O

    Investment Highlights

    YRCW recently announced its corporate ranking as No. 396 on the 2010 FORTUNE 500 list of the largest American companies. The FORTUNE 500 is a list of public companies ranked by 2009 revenues. The 2010 FORTUNE 500 list appears in the May 3, 2010, issue of FORTUNE magazine.

    Timothy Wicks, president and COO of YRCW, has resigned to take a job with his prior employer, United Healthcare. The Overland Park, Kan.-based trucking and logistics company YRCW said the resignation was effective Monday. Operations, sales and marketing now will report directly to CEO Bill Zollars, the Company said.

    During his tenure with YRCW, the Company struggled with declining shipments and had to dramatically restructure its operations, reporting losses of $622 million in 2009 and $974.4 million in 2008. The more than 30,000 YRCW workers in the International Brotherhood of Teamsters gave up roughly $2 billion of compensation, including pension contributions, in two rounds of concessions in 2009. During the year, YRC laid off thousands, sold property that included its Overland Park, Kan., headquarters, shut down facilities, negotiated pension-payment deferrals and revised agreements with lenders more than a dozen times.

    The systematic turnaround effort, which some compared to a bankruptcy process outside of court, culminated in December when bondholders agreed to trade about $470 million in YRCW debt — roughly a third of it — for effectively a 94% stake in YRCW’s common shares. Since then, the Company, which has 560 employees in the St. Louis area, has reported shipments slowly growing through the first three months of the year, creating momentum as it moves into the busier spring shipping season.

    Source: http://www.yrcw.com/ , www.yahoo.com

    Technical Analysis

    Source: http://stockcharts.com

    YRCW is trading above its 50-day moving average. While this is normally considered to be a bullish sign, the moving average is downward sloping which means that investors have been liquidating shares during this time period and tempers the bullishness of the signal.

    YRCW is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

    The MACD for YRCW currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Apr27-2010 symbol Share, $ $ Mn 2009 2010 2009 2010
    Arkansas Best Corp. ABFS 32.67 826.56M n/a n/a 0.55 n/a
    Old Dominion Freight Line ODFL 38.18 1.42B 40.82 n/a 1.12 n/a
    Con-Way Inc. CNW 40.03 1.98B n/a n/a 0.46 n/a
    Trucking Median 1.40B 14n/a n/a 0.71 n/a
    YRC Worldwide Inc YRCW 0.72 736.06M n/a n/a 0.14 n/a

    Source: Thomson Financial

    Insider Trading Activity

    NET SHARES PURCHASE ACTIVITY

    Inside Purchases – Last 6 Months

    Shares Transaction
    Purchases n/a 0
    Sales n/a 0
    Net Shares Purchased (Sold) n/a 0
    Total Insider Shares Held 3.6M n/a
    % Net Shares Purchased (Sold) 0.0% n/a
    Net Institutional Purchases — Prior Qtr to Latest Qtr
    Shares
    Net Shares Purchased (Sold) (24,947,400)
    % Change in Institutional Shares Held (535.5%)

    Source: Yahoo Finance

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