UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 2015
YRC Worldwide Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 0-12255 | 48-0948788 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
10990 Roe Avenue
Overland Park, Kansas 66211
(Address of principal executive office)(Zip Code)
(913) 696-6100
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 | Results of Operations and Financial Condition |
On October 29, 2015, YRC Worldwide Inc. announced its results of operations and financial condition for the three months ended September 30, 2015. A copy of the press release announcing the results of operations and financial condition is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
| (d) | Exhibits |
| Exhibit |
Description | |
| 99.1 | Press Release dated October 29, 2015 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| YRC WORLDWIDE INC. | ||
| By: | /s/ Stephanie D. Fisher | |
| Stephanie D. Fisher | ||
| Vice President and Controller | ||
Date: October 29, 2015
Exhibit 99.1
| 10990 Roe Avenue Overland Park, KS 66211 Phone 913 696 6100 Fax 913 696 6116 News Release |
|
YRC WORLDWIDE REPORTS 2015 THIRD QUARTER EARNINGS
Reports fifth consecutive quarter of year-over-year operating income improvement and a $118.1 million
increase in LTM Adjusted EBITDA to $344.3 million; highest in seven years
OVERLAND PARK, Kan., October 29, 2015 — YRC Worldwide Inc. (NASDAQ: YRCW) today reported financial results for the third quarter of 2015.
Consolidated operating revenue for the third quarter of 2015 was $1.245 billion with consolidated operating income reported at $47.7 million, which included a $0.9 million loss on property disposals. As a comparison, the company reported consolidated operating revenue of $1.323 billion for the third quarter of 2014 with consolidated operating income of $26.7 million, which included a $0.2 million loss on property disposals.
Third Quarter 2015 Financial Highlights
| • | On a non-GAAP basis, the company generated Adjusted EBITDA of $99.1 million for a consolidated Adjusted EBITDA margin of 8.0%, and a $17.5 million increase compared to the $81.6 million reported in the prior year comparable quarter (as detailed in the reconciliation below). |
| • | Last twelve month (LTM) Adjusted EBITDA increased to $344.3 million, an improvement of $118.1 million from the $226.2 million of LTM Adjusted EBITDA reported in the third quarter of 2014. |
| • | Improved yield from continued pricing discipline contributed to an operating ratio of 96.2 on a consolidated basis, which was a year-over-year improvement of 180-basis-points. Additionally, YRC Freight reported an operating ratio of 97.9, which was an improvement of 110-basis-points on a year-over-year basis, and a year-over-year improvement of 230-basis-points at the Regional segment, with an operating ratio of 92.6. |
| • | The total debt-to-Adjusted EBITDA ratio continues to improve, moving from 4.94 times just 12 months ago and 3.33 times last quarter to 3.15 times this quarter. |
| • | Continued to reinvest in the business spending $29.2 million in capital expenditures and entered into new operating leases for revenue equipment that have a capital value equivalent of $25.5 million for a total reinvestment of $54.7 million. The $54.7 million represents a $26.5 million increase over the $28.2 million investment in the third quarter of 2014. The vast majority of the investment was in tractors and technology. |
Third Quarter 2015 Operational Highlights (year-over-year comparison)
| • | Continued strategy of placing freight mix, yield improvements and profitability over market share and tonnage growth. |
| • | Tonnage per day decreased 6.2% at YRC Freight and decreased 3.5% for the Regional segment. |
| • | Excluding fuel surcharge, revenue per shipment increased 7.0% at YRC Freight and revenue per hundredweight increased by 5.8%. Including fuel surcharge, revenue per shipment increased 0.7% and revenue per hundredweight decreased by 0.4%. |
| • | At the Regionals, excluding fuel surcharge, revenue per shipment increased 5.0% and revenue per hundredweight increased by 4.1%. Including fuel surcharge, revenue per shipment decreased 0.7% and revenue per hundredweight decreased by 1.5%. |
| • | Workers’ compensation expense decreased by $4.5 million due to decreased claim frequency in 2015 driven by our safety initiatives but slightly offset by negative development of prior years’ claims. |
“During the third quarter of this year, we continued to stay committed to our strategy of placing pricing improvements and profitability ahead of tonnage growth,” said James Welch, chief executive officer of YRC Worldwide. “We stayed focused, we stayed disciplined, we invested in our people and we invested in the business. As a result, operating, financial and safety performance improved. We are pleased to see the positive results of successfully implementing our strategy and staying the course, and we plan to continue focusing on operational improvements while reinvesting back into our people, equipment and technology,” concluded Welch.
Liquidity Update
| • | At September 30, 2015, the company had cash and cash equivalents and Managed Accessibility under its ABL facility totaling $244.8 million. For comparison, as of June 30, 2015, cash and cash equivalents and Managed Accessibility totaled $226.1 million. |
| • | For the nine months ended September 30, 2015, cash provided by operating activities was $91.5 million as compared to cash used in operating activities of $26.3 million for the nine months ended September 30, 2014, an improvement of $117.8 million. |
Key Segment Information – third quarter 2015 compared to the third quarter of 2014
| YRC Freight |
2015 | 2014 | Percent Change |
|||||||||
| Workdays |
64.0 | 64.0 | ||||||||||
| Operating revenue (in millions) |
$ | 789.2 | $ | 843.0 | (6.4 | )% | ||||||
| Operating income (in millions) |
$ | 16.7 | $ | 8.8 | 89.8 | % | ||||||
| Operating ratio |
97.9 | 99.0 | 1.1pp | |||||||||
| Total tonnage per day (in thousands) |
25.64 | 27.34 | (6.2 | )% | ||||||||
| Total shipments per day (in thousands) |
42.82 | 46.20 | (7.3 | )% | ||||||||
| Revenue per hundredweight incl FSC |
$ | 23.90 | $ | 24.00 | (0.4 | )% | ||||||
| Revenue per hundredweight excl FSC |
$ | 21.24 | $ | 20.08 | 5.8 | % | ||||||
| Revenue per shipment incl FSC |
$ | 286 | $ | 284 | 0.7 | % | ||||||
| Revenue per shipment excl FSC |
$ | 254 | $ | 238 | 7.0 | % | ||||||
| Total weight/shipment (in pounds) |
1,198 | 1,184 | 1.2 | % | ||||||||
| Regional Transportation |
2015 | 2014 | Percent Change |
|||||||||
| Workdays |
64.0 | 64.0 | ||||||||||
| Operating revenue (in millions) |
$ | 455.7 | $ | 479.6 | (5.0 | )% | ||||||
| Operating income (in millions) |
$ | 33.6 | $ | 24.4 | 37.7 | % | ||||||
| Operating ratio |
92.6 | 94.9 | 2.3pp | |||||||||
| Total tonnage per day (in thousands) |
30.85 | 31.97 | (3.5 | )% | ||||||||
| Total shipments per day (in thousands) |
41.76 | 43.65 | (4.3 | )% | ||||||||
| Revenue per hundredweight incl FSC |
$ | 11.55 | $ | 11.73 | (1.5 | )% | ||||||
| Revenue per hundredweight excl FSC |
$ | 10.32 | $ | 9.91 | 4.1 | % | ||||||
| Revenue per shipment incl FSC |
$ | 171 | $ | 172 | (0.7 | )% | ||||||
| Revenue per shipment excl FSC |
$ | 153 | $ | 145 | 5.0 | % | ||||||
| Total weight/shipment (in pounds) |
1,478 | 1,465 | 0.9 | % | ||||||||
Review of Financial Results
YRC Worldwide Inc. will host a conference call with the investment community today, Thursday, October 29, 2015, beginning at 4:30 p.m. ET, 3:30 p.m. CT. The call will be available to listeners as a live webcast and as a replay via the YRC Worldwide website yrcw.com.
Non-GAAP Financial Measures
EBITDA is a non-GAAP measure that reflects the company’s earnings before interest, taxes, depreciation, and amortization expense. Adjusted EBITDA (defined in our credit facilities as Consolidated 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, equity-based compensation expense, net gains or losses on property disposals, restructuring professional fees, nonrecurring consulting fees, expenses associated with certain lump sum payments to our IBT employees and results of permitted dispositions and discontinued operations among other items as defined in the company’s credit facilities. EBITDA and Adjusted EBITDA are used for internal management purposes as a financial measure that reflects the company’s core operating performance. In addition, management uses Adjusted EBITDA to measure compliance with financial covenants in the company’s credit facilities. However, these financial measures should not be construed as better measurements than net income or earnings per share, as defined by generally accepted accounting principles (GAAP).
EBITDA and Adjusted EBITDA have the following limitations:
| • | EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or fund principal payments on our outstanding debt; |
| • | Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to fund restructuring professional fees, nonrecurring consulting fees, letter of credit fees, service interest or principal payments on our outstanding debt or fund our lump sum payments to our IBT employees required under the ratified MOU; |
| • | Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; |
| • | Equity-based compensation is an element of our long-term incentive compensation program, although Adjusted EBITDA excludes certain employee equity-based compensation expense when presenting our ongoing operating performance for a particular period; |
| • | Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. |
Because of these limitations, EBTIDA and Adjusted EBITDA should not be considered a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA as secondary measures. The company has provided reconciliations of its non-GAAP measures, EBITDA and Adjusted EBITDA, to GAAP net income and operating income (loss) within the supplemental financial information in this release.
* * * * *
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as “will,” “expect,” “intend,” “anticipate,” “believe,” “could,” “may,” “project,” “forecast,” “propose,” “plan,” “designed,” “enable,” and similar expressions which speak only as of the date the statement was made are intended to identify forward-looking statements. Forward-looking statements are inherently uncertain are based upon current beliefs, assumptions and expectations of Company management and current market conditions, and are subject to significant business, economic, competitive, regulatory and other risks, uncertainties and contingencies, known and unknown, many of which are beyond our control. Our future financial condition and results could differ materially from those predicted in such forward-looking statements because of a number of factors, including (without limitation) our ability to generate sufficient cash flows and liquidity to fund operations and satisfy our cash needs and future cash commitments, including (without limitation) our obligations related to our substantial indebtedness and lease and pension funding requirements; the success of our management team in implementing its strategic plan and operational and productivity improvements, including (without limitation) our continued ability to meet high on-time and quality delivery performance standards, and the impact of those improvements to meet our future liquidity and profitability; our ability to finance the maintenance, acquisition and replacement of revenue equipment and other necessary capital expenditures; changes in equity and debt markets; inclement weather; price and availability of fuel; sudden changes in the cost of fuel or the index upon which we base our fuel surcharge and the effectiveness of our fuel surcharge program in protecting us against fuel price volatility; competition and competitive pressure on service and pricing; expense volatility, including (without limitation) volatility due to changes in purchased transportation service or pricing for purchased transportation; our ability to comply and the cost of compliance with federal, state, local and foreign laws and regulations, including (without limitation) laws and regulations for the protection of employee safety and health and the environment; terrorist attack; labor relations, including (without limitation) our ability to attract and retain qualified drivers, the continued support of our union employees with respect to our strategic plan, the impact of work rules, work stoppages, strikes or other disruptions, our obligations to multi-employer health, welfare and pension plans, wage requirements and employee satisfaction; the impact of claims and litigation to which we are or may become exposed; and other risks and contingencies, including (without limitation) the risk factors that are included in our reports filed with the SEC, including those described under “Risk Factors” in our annual report on Form 10-K and quarterly reports on Form 10-Q.
* * * * *
About YRC Worldwide
YRC Worldwide Inc., headquartered in Overland Park, Kan., is the holding company for a portfolio of less-than-truckload (LTL) companies including YRC Freight, YRC Reimer, Holland, Reddaway, and New Penn. Collectively, YRC Worldwide companies have one of the largest, most comprehensive LTL networks in North America with local, regional, national and international capabilities. Through their teams of experienced service professionals, YRC Worldwide companies offer industry-leading expertise in heavyweight shipments and flexible supply chain solutions, ensuring customers can ship industrial, commercial and retail goods with confidence.
Please visit our website at www.yrcw.com for more information.
| Investor Contact: | Tony Carreño | |
| 913-696-6108 | ||
| investor@yrcw.com | ||
| Media Contact: | Suzanne Dawson | |
| LAK Public Relations, Inc. | ||
| 212-329-1420 | ||
| sdawson@lakpr.com | ||
CONSOLIDATED BALANCE SHEETS
YRC Worldwide Inc. and Subsidiaries
(Amounts in millions except share and per share data)
| September 30, 2015 |
December 31, 2014 |
|||||||
| (Unaudited) | ||||||||
| ASSETS |
||||||||
| CURRENT ASSETS: |
||||||||
| Cash and cash equivalents |
$ | 210.7 | $ | 171.1 | ||||
| Restricted amounts held in escrow |
25.7 | 28.9 | ||||||
| Accounts receivable, net |
497.8 | 470.5 | ||||||
| Prepaid expenses and other |
77.2 | 81.2 | ||||||
|
|
|
|
|
|||||
| Total current assets |
811.4 | 751.7 | ||||||
|
|
|
|
|
|||||
| PROPERTY AND EQUIPMENT: |
||||||||
| Cost |
2,837.4 | 2,819.6 | ||||||
| Less - accumulated depreciation |
(1,898.5 | ) | (1,825.4 | ) | ||||
|
|
|
|
|
|||||
| Net property and equipment |
938.9 | 994.2 | ||||||
|
|
|
|
|
|||||
| Intangibles, net |
45.1 | 60.3 | ||||||
| Restricted amounts held in escrow |
46.5 | 60.2 | ||||||
| Deferred income taxes, net |
21.2 | 21.4 | ||||||
| Other assets |
101.7 | 97.2 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 1,964.8 | $ | 1,985.0 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT |
||||||||
| CURRENT LIABILITIES: |
||||||||
| Accounts payable |
$ | 185.6 | $ | 172.2 | ||||
| Wages, vacations, and employee benefits |
204.2 | 176.6 | ||||||
| Deferred income taxes, net |
21.2 | 21.4 | ||||||
| Other current and accrued liabilities |
187.6 | 202.2 | ||||||
| Current maturities of long-term debt |
15.5 | 31.1 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
614.1 | 603.5 | ||||||
|
|
|
|
|
|||||
| OTHER LIABILITIES: |
||||||||
| Long-term debt, less current portion |
1,065.3 | 1,078.8 | ||||||
| Deferred income taxes, net |
3.2 | 1.5 | ||||||
| Pension and postretirement |
413.1 | 460.3 | ||||||
| Claims and other liabilities |
296.4 | 315.2 | ||||||
| Commitments and contingencies |
||||||||
| SHAREHOLDERS’ DEFICIT: |
||||||||
| Preferred stock, $1 par value per share |
— | — | ||||||
| Common stock, $0.01 par value per share |
0.3 | 0.3 | ||||||
| Capital surplus |
2,310.8 | 2,290.9 | ||||||
| Accumulated deficit |
(2,215.8 | ) | (2,240.0 | ) | ||||
| Accumulated other comprehensive loss |
(429.9 | ) | (432.8 | ) | ||||
| Treasury stock, at cost (410 shares) |
(92.7 | ) | (92.7 | ) | ||||
|
|
|
|
|
|||||
| Total shareholders’ deficit |
(427.3 | ) | (474.3 | ) | ||||
|
|
|
|
|
|||||
| Total liabilities and shareholders’ deficit |
$ | 1,964.8 | $ | 1,985.0 | ||||
|
|
|
|
|
|||||
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
YRC Worldwide Inc. and Subsidiaries
For the Three and Nine Months Ended September 30
(Amounts in millions except per share data, shares in thousands)
(Unaudited)
| Three Months | Nine Months | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| OPERATING REVENUE |
$ | 1,244.9 | $ | 1,322.6 | $ | 3,689.7 | $ | 3,851.1 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| OPERATING EXPENSES: |
||||||||||||||||
| Salaries, wages and employee benefits |
725.8 | 745.9 | 2,148.6 | 2,212.3 | ||||||||||||
| Operating expenses and supplies |
217.1 | 285.0 | 678.1 | 860.7 | ||||||||||||
| Purchased transportation |
149.6 | 157.4 | 431.0 | 449.1 | ||||||||||||
| Depreciation and amortization |
40.7 | 40.9 | 123.6 | 122.9 | ||||||||||||
| Other operating expenses |
63.1 | 66.5 | 198.6 | 197.9 | ||||||||||||
| (Gains) losses on property disposals, net |
0.9 | 0.2 | 1.5 | (6.1 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
1,197.2 | 1,295.9 | 3,581.4 | 3,836.8 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| OPERATING INCOME |
47.7 | 26.7 | 108.3 | 14.3 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NONOPERATING EXPENSES: |
||||||||||||||||
| Interest expense |
25.7 | 32.6 | 81.2 | 122.5 | ||||||||||||
| (Gain) loss on extinguishment of debt |
— | — | 0.6 | (11.2 | ) | |||||||||||
| Other, net |
(4.5 | ) | (2.7 | ) | (8.1 | ) | (6.7 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Nonoperating expenses, net |
21.2 | 29.9 | 73.7 | 104.6 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) BEFORE INCOME TAXES |
26.5 | (3.2 | ) | 34.6 | (90.3 | ) | ||||||||||
| INCOME TAX (BENEFIT) EXPENSE |
6.7 | (4.4 | ) | 10.4 | (16.4 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NET INCOME (LOSS) |
19.8 | 1.2 | 24.2 | (73.9 | ) | |||||||||||
| AMORTIZATION OF BENEFICIAL CONVERSION FEATURE ON PREFERRED STOCK |
— | — | — | (18.1 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ | 19.8 | $ | 1.2 | $ | 24.2 | $ | (92.0 | ) | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NET INCOME (LOSS) |
$ | 19.8 | $ | 1.2 | $ | 24.2 | $ | (73.9 | ) | |||||||
| OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX |
(1.9 | ) | (0.6 | ) | 2.9 | 3.9 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO YRC WORLDWIDE INC. |
$ | 17.9 | $ | 0.6 | $ | 27.1 | $ | (70.0 | ) | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| AVERAGE COMMON SHARES OUTSTANDING-BASIC |
32,065 | 30,639 | 31,602 | 27,896 | ||||||||||||
| AVERAGE COMMON SHARES OUTSTANDING-DILUTED |
32,621 | 31,903 | 32,569 | 27,896 | ||||||||||||
| EARNINGS (LOSS) PER SHARE - BASIC |
$ | 0.62 | $ | 0.04 | $ | 0.76 | $ | (3.30 | ) | |||||||
| EARNINGS (LOSS) PER SHARE - DILUTED |
$ | 0.61 | $ | (0.03 | ) | $ | 0.74 | $ | (3.30 | ) | ||||||
STATEMENTS OF CONSOLIDATED CASH FLOWS
YRC Worldwide Inc. and Subsidiaries
For the Nine Months Ended September 30
(Amounts in millions)
(unaudited)
| 2015 | 2014 | |||||||
| OPERATING ACTIVITIES: |
||||||||
| Net income (loss) |
$ | 24.2 | $ | (73.9 | ) | |||
| Noncash items included in net income (loss): |
||||||||
| Depreciation and amortization |
123.6 | 122.9 | ||||||
| Paid-in-kind interest on Series A Notes and Series B Notes |
0.4 | 13.9 | ||||||
| Amortization of deferred debt costs |
4.8 | 6.9 | ||||||
| Amortization of premiums and discounts on debt |
1.7 | 26.5 | ||||||
| Noncash equity based compensation and employee benefits expense |
18.5 | 20.6 | ||||||
| Deferred income tax benefit, net |
— | (3.0 | ) | |||||
| (Gains) losses on property disposals, net |
1.5 | (6.1 | ) | |||||
| (Gain) loss on extinguishment of debt |
0.6 | (11.2 | ) | |||||
| Other noncash items, net |
(6.8 | ) | (4.7 | ) | ||||
| Changes in assets and liabilities, net: |
||||||||
| Accounts receivable |
(29.4 | ) | (91.5 | ) | ||||
| Accounts payable |
10.0 | 18.4 | ||||||
| Other operating assets |
(7.3 | ) | 0.3 | |||||
| Other operating liabilities |
(50.3 | ) | (45.4 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by (used in) operating activities |
91.5 | (26.3 | ) | |||||
|
|
|
|
|
|||||
| INVESTING ACTIVITIES: |
||||||||
| Acquisition of property and equipment |
(71.8 | ) | (47.6 | ) | ||||
| Proceeds from disposal of property and equipment |
15.7 | 8.5 | ||||||
| Restricted escrow receipts |
41.9 | 90.7 | ||||||
| Restricted escrow deposits |
(25.0 | ) | (33.6 | ) | ||||
| Other, net |
0.4 | 5.2 | ||||||
|
|
|
|
|
|||||
| Net cash provided by (used in) investing activities |
(38.8 | ) | 23.2 | |||||
|
|
|
|
|
|||||
| FINANCING ACTIVITIES: |
||||||||
| Issuance of long-term debt |
— | 693.0 | ||||||
| Repayment of long-term debt |
(13.1 | ) | (888.7 | ) | ||||
| Debt issuance costs |
— | (29.0 | ) | |||||
| Equity issuance costs |
— | (17.1 | ) | |||||
| Equity issuance proceeds |
— | 250.0 | ||||||
|
|
|
|
|
|||||
| Net cash provided by (used in) financing activities |
(13.1 | ) | 8.2 | |||||
|
|
|
|
|
|||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS |
39.6 | 5.1 | ||||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
171.1 | 176.3 | ||||||
|
|
|
|
|
|||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ | 210.7 | $ | 181.4 | ||||
|
|
|
|
|
|||||
| SUPPLEMENTAL CASH FLOW INFORMATION |
||||||||
| Interest paid |
$ | (79.3 | ) | $ | (103.3 | ) | ||
| Income tax refund (payment) |
(1.6 | ) | 19.3 | |||||
SUPPLEMENTAL FINANCIAL INFORMATION
YRC Worldwide Inc. and Subsidiaries
For the Three and Nine Months Ended September 30
(Amounts in millions)
(Unaudited)
SEGMENT INFORMATION
| Three Months | Nine Months | |||||||||||||||||||||||
| 2015 | 2014 | % | 2015 | 2014 | % | |||||||||||||||||||
| Operating revenue: |
||||||||||||||||||||||||
| YRC Freight |
$ | 789.2 | $ | 843.0 | (6.4 | ) | $ | 2,322.0 | $ | 2,441.9 | (4.9 | ) | ||||||||||||
| Regional Transportation |
455.7 | 479.6 | (5.0 | ) | 1,367.7 | 1,409.2 | (2.9 | ) | ||||||||||||||||
| Other, net of eliminations |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Consolidated |
1,244.9 | 1,322.6 | (5.9 | ) | 3,689.7 | 3,851.1 | (4.2 | ) | ||||||||||||||||
| Operating income (loss): |
||||||||||||||||||||||||
| YRC Freight |
16.7 | 8.8 | 39.4 | (24.0 | ) | |||||||||||||||||||
| Regional Transportation |
33.6 | 24.4 | 75.9 | 55.5 | ||||||||||||||||||||
| Corporate and other |
(2.6 | ) | (6.5 | ) | (7.0 | ) | (17.2 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Consolidated |
$ | 47.7 | $ | 26.7 | $ | 108.3 | $ | 14.3 | ||||||||||||||||
| Operating ratio: |
||||||||||||||||||||||||
| YRC Freight |
97.9 | % | 99.0 | % | 98.3 | % | 101.0 | % | ||||||||||||||||
| Regional Transportation |
92.6 | % | 94.9 | % | 94.5 | % | 96.1 | % | ||||||||||||||||
| Consolidated |
96.2 | % | 98.0 | % | 97.1 | % | 99.6 | % | ||||||||||||||||
Operating ratio is calculated as (i) 100 percent (ii) minus the result of dividing operating income by operating revenue or (iii) plus the result of dividing operating loss by operating revenue, and expressed as a percentage.
SUPPLEMENTAL INFORMATION
| As of September 30, 2015 |
Par Value | Discount | Book Value |
|||||||||
| Term loan |
$ | 687.8 | $ | (4.7 | ) | $ | 683.1 | |||||
| ABL facility (a) |
— | — | — | |||||||||
| Secured Second A&R CDA |
44.7 | — | 44.7 | |||||||||
| Unsecured Second A&R CDA |
73.2 | — | 73.2 | |||||||||
| Lease financing obligations |
279.8 | — | 279.8 | |||||||||
| Other |
— | — | — | |||||||||
|
|
|
|
|
|
|
|||||||
| Total debt |
$ | 1,085.5 | $ | (4.7 | ) | $ | 1,080.8 | |||||
|
|
|
|
|
|
|
|||||||
| As of December 31, 2014 |
Par Value | Discount | Book Value |
|||||||||
| Term loan |
$ | 693.0 | $ | (5.7 | ) | $ | 687.3 | |||||
| ABL facility (b) |
— | — | — | |||||||||
| Series B Notes |
17.7 | (0.6 | ) | 17.1 | ||||||||
| Secured Second A&R CDA |
47.0 | — | 47.0 | |||||||||
| Unsecured Second A&R CDA |
73.2 | — | 73.2 | |||||||||
| Lease financing obligations |
285.1 | — | 285.1 | |||||||||
| Other |
0.2 | — | 0.2 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total debt |
$ | 1,116.2 | $ | (6.3 | ) | $ | 1,109.9 | |||||
|
|
|
|
|
|
|
|||||||
Our total leverage ratio for the four consecutive fiscal quarters ended September 30, 2015 was 3.15 to 1.00.
| (a) | ABL capacity $450.0M; borrowing base $445.1M; maximum availability $78.6M; Managed Accessibility $34.1M. Managed Accessibility is defined as maximum availability less the lower of 10% of the borrowing base or 10% of the collateral line cap. |
| (b) | ABL capacity $450.0M; borrowing base $445.5M; maximum availability $71.2M; amount able to be drawn $27.1M |
SUPPLEMENTAL FINANCIAL INFORMATION
YRC Worldwide Inc. and Subsidiaries
For the Three and Nine Months Ended September 30
(Amounts in millions)
(Unaudited)
| Three Months | Nine Months | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Reconciliation of net income (loss) to adjusted EBITDA: |
||||||||||||||||
| Net income (loss) |
$ | 19.8 | $ | 1.2 | $ | 24.2 | $ | (73.9 | ) | |||||||
| Interest expense, net |
25.6 | 32.5 | 80.9 | 122.2 | ||||||||||||
| Income tax expense (benefit) |
6.7 | (4.4 | ) | 10.4 | (16.4 | ) | ||||||||||
| Depreciation and amortization |
40.7 | 40.9 | 123.6 | 122.9 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| EBITDA |
92.8 | 70.2 | 239.1 | 154.8 | ||||||||||||
| Adjustments for debt covenants: |
||||||||||||||||
| (Gains) losses on property disposals, net |
0.9 | 0.2 | 1.5 | (6.1 | ) | |||||||||||
| Letter of credit expense |
2.2 | 2.5 | 6.6 | 9.8 | ||||||||||||
| Restructuring professional fees |
0.2 | 3.1 | 0.2 | 4.2 | ||||||||||||
| Nonrecurring consulting fees |
(0.8 | ) | — | 5.1 | — | |||||||||||
| Permitted dispositions and other |
— | 1.6 | 0.3 | 1.8 | ||||||||||||
| Equity based compensation expense |
2.8 | 2.0 | 6.5 | 11.1 | ||||||||||||
| Amortization of ratification bonus |
4.6 | 5.2 | 14.4 | 10.4 | ||||||||||||
| (Gain) loss on extinguishment of debt |
— | — | 0.6 | (11.2 | ) | |||||||||||
| Other, net (a) |
(3.6 | ) | (3.2 | ) | (7.0 | ) | (7.3 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 99.1 | $ | 81.6 | $ | 267.3 | $ | 167.5 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) | As required under our Term Loan Agreement, other, net, shown above consists of the impact of certain items to be included in Adjusted EBITDA under our Term Loan Agreement. |
| Three Months | Nine Months | |||||||||||||||
| Adjusted EBITDA by segment: |
2015 | 2014 | 2015 | 2014 | ||||||||||||
| YRC Freight |
$ | 45.2 | $ | 38.0 | $ | 130.4 | $ | 55.8 | ||||||||
| Regional Transportation |
52.9 | 43.2 | 135.7 | 111.2 | ||||||||||||
| Corporate and other |
1.0 | 0.4 | 1.2 | 0.5 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 99.1 | $ | 81.6 | $ | 267.3 | $ | 167.5 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
SUPPLEMENTAL FINANCIAL INFORMATION
YRC Worldwide Inc. and Subsidiaries
For the Three and Nine Months Ended September 30
(Amounts in millions)
(Unaudited)
| Three Months | Nine Months | |||||||||||||||
| YRC Freight segment |
2015 | 2014 | 2015 | 2014 | ||||||||||||
| Reconciliation of operating income (loss) to adjusted EBITDA: |
||||||||||||||||
| Operating income (loss) |
$ | 16.7 | $ | 8.8 | $ | 39.4 | $ | (24.0 | ) | |||||||
| Depreciation and amortization |
23.3 | 24.6 | 70.5 | 74.2 | ||||||||||||
| (Gains) losses on property disposals, net |
1.1 | 0.1 | 1.7 | (6.8 | ) | |||||||||||
| Letter of credit expense |
1.6 | 1.8 | 4.6 | 6.8 | ||||||||||||
| Nonrecurring consulting fees |
(0.8 | ) | — | 5.1 | — | |||||||||||
| Amortization of ratification bonus |
3.0 | 3.4 | 9.3 | 6.7 | ||||||||||||
| Other, net (a) |
0.3 | (0.7 | ) | (0.2 | ) | (1.1 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 45.2 | $ | 38.0 | $ | 130.4 | $ | 55.8 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) | As required under our Term Loan, other, net, shown above does not include the impact of non-cash foreign currency gains or losses. |
| Three Months | Nine Months | |||||||||||||||
| Regional Transportation segment |
2015 | 2014 | 2015 | 2014 | ||||||||||||
| Reconciliation of operating income to adjusted EBITDA: |
||||||||||||||||
| Operating income |
$ | 33.6 | $ | 24.4 | $ | 75.9 | $ | 55.5 | ||||||||
| Depreciation and amortization |
17.4 | 16.4 | 53.2 | 49.0 | ||||||||||||
| (Gains) losses on property disposals, net |
(0.2 | ) | 0.1 | — | 0.7 | |||||||||||
| Letter of credit expense |
0.5 | 0.5 | 1.5 | 2.3 | ||||||||||||
| Amortization of ratification bonus |
1.6 | 1.8 | 5.1 | 3.7 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 52.9 | $ | 43.2 | $ | 135.7 | $ | 111.2 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Three Months | Nine Months | |||||||||||||||
| Corporate and other segment |
2015 | 2014 | 2015 | 2014 | ||||||||||||
| Reconciliation of operating loss to adjusted EBITDA: |
||||||||||||||||
| Operating loss |
$ | (2.6 | ) | $ | (6.5 | ) | $ | (7.0 | ) | $ | (17.2 | ) | ||||
| Depreciation and amortization |
(0.0 | ) | (0.1 | ) | (0.1 | ) | (0.3 | ) | ||||||||
| Gains on property disposals, net |
— | — | (0.2 | ) | — | |||||||||||
| Letter of credit expense |
0.1 | 0.2 | 0.5 | 0.7 | ||||||||||||
| Restructuring professional fees |
0.2 | 3.1 | 0.2 | 4.2 | ||||||||||||
| Permitted dispositions and other |
— | 1.6 | 0.3 | 1.8 | ||||||||||||
| Equity based compensation expense |
2.8 | 2.0 | 6.5 | 11.1 | ||||||||||||
| Other, net (a) |
0.5 | 0.1 | 1.0 | 0.2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 1.0 | $ | 0.4 | $ | 1.2 | $ | 0.5 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) | As required under our Term Loan, other, net, shown above does not include the impact of earnings of our equity method investment as well as non-cash foreign currency gains or losses. |
SUPPLEMENTAL FINANCIAL INFORMATION
YRC Worldwide Inc. and Subsidiaries
For the Trailing Twelve Months Ended September 30
(Amounts in millions)
(Unaudited)
| 2015 | ||||
| Reconciliation of net income to adjusted EBITDA: |
||||
| Net income |
$ | 30.4 | ||
| Interest expense, net |
108.1 | |||
| Income tax expense |
10.7 | |||
| Depreciation and amortization |
164.3 | |||
|
|
|
|||
| EBITDA |
313.5 | |||
| Adjustments for debt covenants: |
||||
| Gains on property disposals, net |
(4.3 | ) | ||
| Letter of credit expense |
8.9 | |||
| Restructuring professional fees |
0.2 | |||
| Nonrecurring consulting fees |
5.1 | |||
| Permitted dispositions and other |
0.3 | |||
| Equity based compensation expense |
9.7 | |||
| Amortization of ratification bonus |
19.6 | |||
| Loss on extinguishment of debt |
0.6 | |||
| Other, net (a) |
(9.3 | ) | ||
|
|
|
|||
| Adjusted EBITDA |
$ | 344.3 | ||
|
|
|
|||
| (a) | As required under our Term Loan Agreement, other, net, shown above consists of the impact of certain items to be included in Adjusted EBITDA under our Term Loan Agreement. |
YRC Worldwide Inc.
Segment Statistics
Quarterly Comparison
| YRC Freight | ||||||||||||||||||||
| 3Q15 | 3Q14 | 2Q15 | Y/Y % (b) |
Sequential % (b) |
||||||||||||||||
| Workdays |
64.0 | 64.0 | 63.5 | |||||||||||||||||
| Total picked up revenue (in millions) (a) |
$ | 784.4 | $ | 840.1 | $ | 792.2 | (6.6 | ) | (1.0 | ) | ||||||||||
| Total tonnage (in thousands) |
1,641 | 1,750 | 1,685 | (6.2 | ) | (2.6 | ) | |||||||||||||
| Total tonnage per day (in thousands) |
25.64 | 27.34 | 26.53 | (6.2 | ) | (3.4 | ) | |||||||||||||
| Total shipments (in thousands) |
2,740 | 2,957 | 2,791 | (7.3 | ) | (1.8 | ) | |||||||||||||
| Total shipments per day (in thousands) |
42.82 | 46.20 | 43.95 | (7.3 | ) | (2.6 | ) | |||||||||||||
| Total picked up revenue/cwt. |
$ | 23.90 | $ | 24.00 | $ | 23.51 | (0.4 | ) | 1.6 | |||||||||||
| Total picked up revenue/cwt. (excl. FSC) |
$ | 21.24 | $ | 20.08 | $ | 20.70 | 5.8 | 2.6 | ||||||||||||
| Total picked up revenue/shipment |
$ | 286 | $ | 284 | $ | 284 | 0.7 | 0.8 | ||||||||||||
| Total picked up revenue/shipment (excl. FSC) |
$ | 254 | $ | 238 | $ | 250 | 7.0 | 1.8 | ||||||||||||
| Total weight/shipment (in pounds) |
1,198 | 1,184 | 1,207 | 1.2 | (0.8 | ) | ||||||||||||||
| (a) Reconciliation of operating revenue to total picked up revenue (in millions): |
||||||||||||||||||||
| Operating revenue |
$ | 789.2 | $ | 843.0 | $ | 795.2 | ||||||||||||||
| Change in revenue deferral and other |
(4.8 | ) | (2.9 | ) | (3.0 | ) | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Total picked up revenue |
$ | 784.4 | $ | 840.1 | $ | 792.2 | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Regional Transportation | ||||||||||||||||||||
| 3Q15 | 3Q14 | 2Q15 | Y/Y % (b) |
Sequential % (b) |
||||||||||||||||
| Workdays |
64.0 | 64.0 | 63.0 | |||||||||||||||||
| Total picked up revenue (in millions) (a) |
$ | 455.9 | $ | 479.9 | $ | 463.4 | (5.0 | ) | (1.6 | ) | ||||||||||
| Total tonnage (in thousands) |
1,974 | 2,046 | 1,997 | (3.5 | ) | (1.2 | ) | |||||||||||||
| Total tonnage per day (in thousands) |
30.85 | 31.97 | 31.71 | (3.5 | ) | (2.7 | ) | |||||||||||||
| Total shipments (in thousands) |
2,672 | 2,794 | 2,697 | (4.3 | ) | (0.9 | ) | |||||||||||||
| Total shipments per day (in thousands) |
41.76 | 43.65 | 42.82 | (4.3 | ) | (2.5 | ) | |||||||||||||
| Total picked up revenue/cwt. |
$ | 11.55 | $ | 11.73 | $ | 11.60 | (1.5 | ) | (0.5 | ) | ||||||||||
| Total picked up revenue/cwt. (excl. FSC) |
$ | 10.32 | $ | 9.91 | $ | 10.26 | 4.1 | 0.6 | ||||||||||||
| Total picked up revenue/shipment |
$ | 171 | $ | 172 | $ | 172 | (0.7 | ) | (0.7 | ) | ||||||||||
| Total picked up revenue/shipment (excl. FSC) |
$ | 153 | $ | 145 | $ | 152 | 5.0 | 0.4 | ||||||||||||
| Total weight/shipment (in pounds) |
1,478 | 1,465 | 1,481 | 0.9 | (0.2 | ) | ||||||||||||||
| (a) Reconciliation of operating revenue to total picked up revenue (in millions): |
||||||||||||||||||||
| Operating revenue |
$ | 455.7 | $ | 479.6 | $ | 463.2 | ||||||||||||||
| Change in revenue deferral and other |
0.2 | 0.3 | 0.2 | |||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Total picked up revenue |
$ | 455.9 | $ | 479.9 | $ | 463.4 | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| (a) | Does not equal financial statement revenue due to revenue recognition adjustments between accounting periods. |
| (b) | Percent change based on unrounded figures and not the rounded figures presented. |
YRC Worldwide Inc.
Segment Statistics
YTD Comparison
| YRC Freight | ||||||||||||
| 2015 | 2014 | Y/Y % (b) |
||||||||||
| Workdays |
190.0 | 190.5 | ||||||||||
| Total picked up revenue (in millions) (a) |
$ | 2,313.9 | $ | 2,435.3 | (5.0 | ) | ||||||
| Total tonnage (in thousands) |
4,892 | 5,192 | (5.8 | ) | ||||||||
| Total tonnage per day (in thousands) |
25.75 | 27.26 | (5.5 | ) | ||||||||
| Total shipments (in thousands) |
8,135 | 8,799 | (7.5 | ) | ||||||||
| Total shipments per day (in thousands) |
42.81 | 46.19 | (7.3 | ) | ||||||||
| Total picked up revenue/cwt. |
$ | 23.65 | $ | 23.45 | 0.9 | |||||||
| Total picked up revenue/cwt. (excl. FSC) |
$ | 20.87 | $ | 19.55 | 6.8 | |||||||
| Total picked up revenue/shipment |
$ | 284 | $ | 277 | 2.8 | |||||||
| Total picked up revenue/shipment (excl. FSC) |
$ | 251 | $ | 231 | 8.8 | |||||||
| Total weight/shipment (in pounds) |
1,203 | 1,180 | 1.9 | |||||||||
| (a) Reconciliation of operating revenue to total picked up revenue (in millions): |
||||||||||||
| Operating revenue |
$ | 2,322.0 | $ | 2,441.9 | ||||||||
| Change in revenue deferral and other |
(8.1 | ) | (6.6 | ) | ||||||||
|
|
|
|
|
|||||||||
| Total picked up revenue |
$ | 2,313.9 | $ | 2,435.3 | ||||||||
|
|
|
|
|
|||||||||
| Regional Transportation | ||||||||||||
| 2015 | 2014 | Y/Y % (b) |
||||||||||
| Workdays |
191.5 | 193.5 | ||||||||||
| Total picked up revenue (in millions) (a) |
$ | 1,368.4 | $ | 1,409.9 | (2.9 | ) | ||||||
| Total tonnage (in thousands) |
5,948 | 6,115 | (2.7 | ) | ||||||||
| Total tonnage per day (in thousands) |
31.06 | 31.60 | (1.7 | ) | ||||||||
| Total shipments (in thousands) |
7,987 | 8,306 | (3.8 | ) | ||||||||
| Total shipments per day (in thousands) |
41.71 | 42.93 | (2.8 | ) | ||||||||
| Total picked up revenue/cwt. |
$ | 11.50 | $ | 11.53 | (0.2 | ) | ||||||
| Total picked up revenue/cwt. (excl. FSC) |
$ | 10.20 | $ | 9.71 | 5.0 | |||||||
| Total picked up revenue/shipment |
$ | 171 | $ | 170 | 0.9 | |||||||
| Total picked up revenue/shipment (excl. FSC) |
$ | 152 | $ | 143 | 6.2 | |||||||
| Total weight/shipment (in pounds) |
1,489 | 1,472 | 1.2 | |||||||||
| (a) Reconciliation of operating revenue to total picked up revenue (in millions): |
||||||||||||
| Operating revenue |
$ | 1,367.7 | $ | 1,409.2 | ||||||||
| Change in revenue deferral and other |
0.7 | 0.7 | ||||||||||
|
|
|
|
|
|||||||||
| Total picked up revenue |
$ | 1,368.4 | $ | 1,409.9 | ||||||||
|
|
|
|
|
|||||||||
| (a) | Does not equal financial statement revenue due to revenue recognition adjustments between accounting periods. |
| (b) | Percent change based on unrounded figures and not the rounded figures presented. |