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*)

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

    YRC Worldwide Inc. (YRCW) operates as a holding company for its wholly owned operating subsidiaries to offer 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 (Jul-26-10) 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 $0.40 Gross marg. 9.6% 7.0% 27.1% 0.5% 4.3% 760.0%
    52wk Range: $6.18-0.10 Oper. margin -5.9% -12.0% 103.4% -17.2% 9.6% 155.8%
    Avg Vol (3m): 60,802,400 Net margin -6.6% -10.9% 62.5% -12.6% 10.4% 182.5%
    Market Cap. 423.63M
    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 its first quarter 2010 results. For the quarter ending March 31, 2010, the Company announced a loss per share of $.33 when excluding a previously announced charge of $.20 per share for union employee equity-based awards, and a $.53 loss per share when including that item. By comparison, the Company reported a $4.61 loss per share in the first quarter of 2009.

    For the first quarter of 2010, the Company reported operating cash flow of $18 million, including the receipt of the previously announced $82 million income tax refund in late February. YRCW issued $50 million of 6% notes on February 23, 2010, and used the net proceeds from these new notes to redeem its remaining 8.5% notes that were due April 15, 2010. In addition, the Company repaid $29 million on its asset-backed securitization (“ABS”) facility primarily from collections of its fourth quarter revenues. At March 31, 2010, the Company reported cash and cash equivalents of $130 million, unused revolver reserves of $107 million and unrestricted availability of $4 million under the Company’s $950 million revolving credit facility.

    Adjusted EBITDA is a non-GAAP measure that reflects the Company’s earnings before interest, taxes, depreciation and amortization expense, and further adjusted for letter of credit fees and other items as defined in the Company’s Credit Agreement. “Adjusted EBITDA” and “loss per share when excluding the charge for union employee equity-based awards” are used for internal management purposes as financial measures that reflect the Company’s core operating performance. In addition, adjusted EBITDA is used by management to measure compliance with financial covenants in the Company’s Credit Agreement. However, these financial measures should not be construed as a better measurement than operating income or earnings per share, as defined by generally accepted accounting principles.

    Key Segment Information

    First quarter 2010 compared to the first quarter 2009:

    • YRC National Transportation total shipments per day down 33.6%, total tons per day down 34.6%, with March tons per day down 22.5%, and total revenue per hundredweight, including fuel surcharge, up .4%.
    • YRC Regional Transportation total shipments per day down 12.9%, total tons per day down 9.1%, with March tons per day down 3.2%, and total revenue per hundredweight, including fuel surcharge, down 2.3%.

    Additional statistical information is available on the Company’s Web site at yrcw.com under Investors, Earnings Releases & Operating Statistics.

    Outlook

    During April, YRC National and YRC Regional volumes increased compared to March, as both sequential trends were slightly better than normal seasonal patterns.

    • Gross capital expenditures in the range of $50 to $75 million
    • Real estate sales in the range of $25 to $50 million
    • Sale and financing leasebacks of approximately $50 million, primarily in the second half of the year
    • Interest expense in the range of $40 to $45 million per quarter, with cash interest of $10 million to $12 million per quarter
    • Effective income tax rate of 2%
    • Outstanding shares of 1.054 billion, prior to any adjustments for a reverse stock split and the issuance of equity

    Amendment to Credit Facilities

    On May 3, 2010, the Company completed amendments to its $950 million revolving credit facility and $400 million ABS facility. Under the revolving credit facility, YRCW may retain up to $100 million of net proceeds from the issuance of equity prior to December 31, 2010. Previously, the lenders would have received 50% of the net proceeds from an equity issuance. In addition, the Company’s financial covenants were reset for the remainder of 2010 to take into account the impact to the Company’s customer base from the delayed note exchange at the end of 2009. The adjusted EBITDA covenants are $5 million for second quarter of 2010, $50 million cumulative for second and third quarters of 2010, and $100 million cumulative for second, third and fourth quarters of 2010. In addition, the Company is required to maintain minimum available cash (as defined in its credit agreement) of $25 million through the remainder of the year.

    Financial Strength (Jul-26-2010) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 0.69 1.48 1.44 0.74
    Current Ratio (MRQ) 0.69 1.51 1.75 0.88
    Long-Term Debt to Equity(MRQ) 27.50 61.93 111.99
    Total Debt to Equity (MRQ) 41.30 87.70 175.33

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among 12 polled investment analysts. Against the YRC Worldwide Inc company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 0 0 6 4 2 0
    4 weeks ago 0 0 5 4 2 0
    2 months ago 0 0 4 4 3 0
    3 months ago 0 0 4 4 3 0
    Last year 0 0 5 2 2 0

    The three analysts offering 12-month price targets for YRCW have a median target of 0.30, with a high estimate of 0.50 and a low estimate of 0.00. The median estimate represents a -11.24% decrease from the last price of 0.338.

    Source: www.ft.com

    Consensus Estimates Analysis

    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Sep-10 9 1,256.04 1,370.00 1,184.90 1,247.60
    Quarter Ending Dec-10 9 1,192.83 1,346.00 1,080.00 1,158.10
    Year Ending Dec-10 11 4,670.96 4,980.00 4,491.00 6,108.96
    Year Ending Dec-11 7 4,911.01 5,325.40 4,244.00
    EARNINGS (per share)
    Quarter Ending Sep-10 11 -0.07 -0.02 -0.14 -1.44
    Quarter Ending Dec-10 11 -0.07 -0.02 -0.14 -1.34
    Year Ending Dec-10 11 -0.48 -0.36 -0.68 -3.75
    Year Ending Dec-11 9 -0.20 -0.01 -0.47 0.46
    LT Growth Rate (%) 1 15.00 15.00 15.00 7.00

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

    Investment Highlights

    YRCW is a Fortune 500 company, and is one of the largest transportation service providers in the world. The company has the largest, most comprehensive network in North America with local, regional, national and international capabilities.

    Holland, a subsidiary of YRCW has been named 2009 LTL Carrier of the Year by TTS LLC, one of the fastest growing third-party transportation and logistics providers in the industry.

    In a recent ceremony, TTS presented its annual Carrier of the Year Awards to recipients in four distinct transportation categories including Rail, OTR, Drayman, and LTL.

    To determine rankings, TTS rated its suppliers based on criteria such as on-time performance, ease of use, technology, and revenue for the year from TTS. Agents and employees of TTS then voted to determine the winners.

    This marks the fourth time this year that Holland has been recognized for an exceptional customer experience. The company also has secured a 2009 Supplier Excellence Award for the fourth consecutive year from Eastman Chemical Company, a 2009 Regional Carrier of the Year Award from Echo Global Logistics, and a 2009 Carrier of the Year award from Hamilton Sundstrand Logistics Council.

    Subsidiaries

    YRC, created by combining the Yellow Transportation and Roadway networks, specializes in reliable solutions for the heavyweight shipping of industrial, commercial, and retail goods in national, regional, and international markets. The YRC network in Canada is operated by YRC Reimer, a leading Canadian provider of industrial, retail, and commercial transportation services offering seamless shipping between Canada and North American and global markets.

    YRC Reimer, built on the expertise of Reimer Express, Yellow Transportation and Roadway, brings Canadian shippers the strength of the integrated YRC network and the supply chain advantages of simplified access to flexible, efficient solutions.

    YRC Glen Moore is one of the fastest-growing providers of customized truckload van services in North America, offering a full range of transportation services.

    YRC Regional Transportation consists of Holland, Reddaway, and New Penn, which specialize in regional services in next-day, second-day and time-sensitive markets.

    Holland is a YRC Regional Transportation company offering services throughout the central and midwestern United States and eastern Canada. Holland makes claim-free deliveries a top priority, and its on-time performance has long been considered an industry standard.

    Reddaway is a YRC Regional Transportation company operating a network across the western United States and Canada. The company provides guaranteed delivery of time-sensitive shipments, a user-friendly, Internet-based, transportation management system, and streamlined customs procedures.

    New Penn is a YRC Regional Transportation company providing superior regional, next-day ground services through a network spanning the northeastern United States, Quebec, Canada and Puerto Rico. New Penn is considered an industry leader in tracking technologies and Internet-based shipping services.

    YRC Logistics, a global logistics management company, coordinates the movement of goods worldwide across multiple modes of the global supply chain. YRC Logistics helps businesses automate and improve shipment planning, optimization, administration, and overall supply-chain processes while connecting more efficiently with clients, their suppliers, and the final consumer.

    YRC Worldwide Technologies provides innovative information solutions and exceptional technology services to create a competitive advantage for YRC Worldwide businesses. The company, recognized with numerous industry awards, specializes in the development and support of proprietary, world-class technology systems.

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

    Technical Analysis

    Source: http://stockcharts.com

    YRCW is trading above its 13-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

    YRCW’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, YRCW is trading above its upper Bollinger Band. Relative to recent price action, the stock is currently overextended and due for either a pause or retracement.

    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 zero, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Jul26-2010 symbol Share, $ $ Mn 2010 2011 2010 2011
    Arkansas Best Corp. ABFS 23.16 586.06M n/a n/a 0.36 n/a
    Celadon Group Inc. CGI 16.34 363.74M 171.62 n/a 0.65 n/a
    Saia Inc. SAIA 15.90 252.29M n/a n/a 0.28 n/a
    Trucking Median 400.69M n/a n/a 0.43 n/a
    YRC Worldwide Inc. YRCW 0.40 423.63M n/a n/a 0.04 n/a

    Source: Thomson Financial

    Insider Trading Activity

    NET SHARES PURCHASE ACTIVITY

    Inside Purchases – Last 6 Months

    Shares Transaction
    Purchases 200,000 1
    Sales n/a 0
    Net Shares Purchased (Sold) 200,000 1
    Total Insider Shares Held 579.74K n/a
    % Net Shares Purchased (Sold) 53% n/a

    Net Institutional Purchases — Prior Qtr to Latest Qtr
    Shares
    Net Shares Purchased (Sold) 616,073,000
    % Change in Institutional Shares Held 47.85%

    Source: Yahoo Finance

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