YRC Worldwide Inc. (NASDAQ: YRCW) reported results for the second
quarter ended June 30, 2020. Operating revenue was $1.015 billion
and operating loss was $4.6 million, which included a $6.0 million
net gain on property disposals. In comparison, operating revenue in
the second quarter of 2019 was $1.273 billion and operating income
was $14.3 million, which included a $6.2 million net gain on
property disposals.
Net Loss for second quarter 2020 was $37.1
million, or $1.09 per share, compared to net loss of $23.6 million,
or $0.71 per share, in second quarter 2019.
On July 7th, the Company successfully secured a
loan with the United States Department of Treasury (the “UST”) for
up to $700 million (the “UST Loan”) under the CARES Act. The
significant terms of which are as follows:
- Tranche A of up to $300 million to satisfy previously deferred
short-term contractual obligations such as healthcare payments and
some lease obligations with the remaining amount going to fund an
increase in liquidity.
- Tranche B of up to $400 million to reinvest back into the
business via purchases of tractors and trailers.
- The UST Loan is non-amortizing, bears an interest rate of the
Eurodollar (floor of 1.0%) + 3.5% and matures in September 2024.
The Company issued UST approximately 30% of its outstanding shares
on a post-transaction basis as a condition of the financing.
In addition to the securing the UST Loan, the
Company amended its existing term loan to, among other things,
eliminate its Adjusted EBITDA covenant until December 31, 2021, at
which time the covenant will require at least $100 million of LTM
Adjusted EBITDA, and the covenant will incrementally increase to a
requirement of at least $200 million LTM Adjusted EBITDA on June
30, 2022. The company was also able to decrease the amended
interest rate on the existing term loan down to the previous LIBOR
+ 7.5% (with a floor of 1.0%). As a condition of the aforementioned
amendments, the Company agreed to a minimum “Liquidity” requirement
of $125 million.
Finally, the Company was also able to
significantly extend the maturity on its Asset Based Loan (the
“ABL”) from June 2021 to January 2024.
“It is a new day at YRC Worldwide,” said Darren
Hawkins, Chief Executive Officer. “During this pandemic and
historically difficult economic backdrop, we were able to secure
financing that not only took care of our employees’ healthcare
coverage but also will allow us to significantly upgrade the
condition, age and efficiency of our rolling stock. We were also
able to gain additional covenant relief and maturity extension of
our other substantive debt instruments simultaneously,” said Darren
Hawkins, Chief Executive Officer.
“On an operational basis, for the quarter,
volumes declined year-over-year. However, after bottoming out in
April, volumes have steadily improved through the quarter with rate
of improvement slowing since late June. I would like to say
the worst is behind us, but this virus and the spread thereof is
too unpredictable. To that end, when we started to feel the impact
of the economic slow down and subsequent decline in our volumes, we
took immediate and swift action to build liquidity which allowed us
to improve our cash position and end the quarter to just over $300
million in liquidity.”
“With the UST Loan secured and our largest
maturities pushed out to 2024, we now have the unique ability to
focus on and accelerate our Enterprise Transformation strategy that
we began implementing last year. Our goal is to improve our
customers’ experience while operating as one company, with one
network and five incredibly proud and distinguished brands, Hawkins
continued.
“In closing, I want to thank all of YRC’s
employees across North America who continue to perform essential
work to keep America rolling and the nation’s supply chain open
during these challenging times. We continue to prioritize the
health and safety of our employees above all while focusing on
exceeding our customers’ expectations every single day on every
single shipment,” concluded Hawkins.
Second Quarter 2020
Financial Update
- Revenue decreased by $257.2 million to $1.015 billion compared
to revenue of $1.273 billion in second quarter of 2019.
- Net loss increased by $13.5 million to $37.1 million compared
to a net loss of $23.6 million in second quarter 2019.
- On a non-GAAP basis, the Company generated consolidated
Adjusted EBITDA of $37.9 million, a $29.4 million decrease compared
to $67.3 million in the prior year comparable quarter (as detailed
in the reconciliation below). Last twelve month (LTM) consolidated
Adjusted EBITDA was $183.1 million compared to $259.1 million in
2019 (as detailed in the reconciliation below).
Second Quarter 2020
Operational Update
- LTL revenue per hundredweight including fuel surcharge
decreased 5.7%; however, weight per shipment increased 1.4%
resulting in a LTL revenue per shipment decrease of 4.4% when
compared to the same period in 2019. Excluding fuel
surcharge, LTL revenue per hundredweight was down 2.6% and LTL
revenue per shipment was down 1.2%.
- LTL tonnage per day decreased 14.8% when compared to 2Q19.
- The consolidated operating ratio for the quarter was 100.5
compared to 98.9 in 2Q19.
Liquidity Update (as of June 30,
2020)
- The Company’s outstanding debt was $909.8 million, an increase
of $44.8 million compared to $865.0 million as of June 30, 2019.
- For the six months ended June 30, 2020, cash provided by
operating activities was $213.6 million compared to cash used of
$29.5 million for the six months ended June 30, 2019.
- The Company’s available liquidity as calculated under our
credit facilities in place before July 7, 2020, which was comprised
of cash and cash equivalents and Managed Accessibility (as detailed
in the supplemental information provided below) under its ABL
facility, was $302.6 million.
Key Information – Second
quarter 2020 compared to Second quarter 2019
YRC Worldwide |
|
2020 |
|
|
2019 |
|
Percent Change(a) |
Workdays |
|
63.0 |
|
|
63.5 |
|
|
Operating revenue (in millions) |
$ |
1,015.4 |
|
$ |
1,272.6 |
|
(20.2)% |
Operating income (in millions) |
$ |
(4.6) |
|
$ |
14.3 |
|
N/M |
Operating ratio |
|
100.5 |
|
|
98.9 |
|
(1.6pp) |
LTL tonnage per day (in thousands) |
|
36.24 |
|
|
42.54 |
|
(14.8)% |
LTL shipments per day (in thousands) |
|
63.53 |
|
|
75.64 |
|
(16.0)% |
LTL picked up revenue per hundredweight incl FSC |
$ |
20.36 |
|
$ |
21.60 |
|
(5.7)% |
LTL picked up revenue per hundredweight excl FSC |
$ |
18.48 |
|
$ |
18.98 |
|
(2.6)% |
LTL picked up revenue per shipment incl FSC |
$ |
232 |
|
$ |
243 |
|
(4.4)% |
LTL picked up revenue per shipment excl FSC |
$ |
211 |
|
$ |
214 |
|
(1.2)% |
LTL weight/shipment (in pounds) |
|
1,141 |
|
|
1,125 |
|
1.4% |
Total tonnage per day (in thousands) |
|
46.44 |
|
|
53.16 |
|
(12.6)% |
Total shipments per day (in thousands) |
|
65.44 |
|
|
77.35 |
|
(15.4)% |
Total picked up revenue per hundredweight incl FSC |
$ |
17.40 |
|
$ |
18.72 |
|
(7.0)% |
Total picked up revenue per hundredweight excl FSC |
$ |
15.85 |
|
$ |
16.51 |
|
(4.0)% |
Total picked up revenue per shipment incl FSC |
$ |
247 |
|
$ |
257 |
|
(4.0)% |
Total picked up revenue per shipment excl FSC |
$ |
225 |
|
$ |
227 |
|
(0.8)% |
Total weight/shipment (in pounds) |
|
1,419 |
|
|
1,374 |
|
3.3% |
(a) Percent change
based on unrounded figures and not the rounded figures
presented Review
of Financial Results
YRC Worldwide Inc. will host a conference call
with the investment community today, Monday August 3, 2020,
beginning at 5:00 p.m. ET.
A live audio webcast of the conference call and
presentation slides will be available on YRC Worldwide Inc.’s
website www.yrcw.com. A replay of the webcast will also be
available at www.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 is a non-GAAP measure that
reflects EBITDA, and further adjusts for letter of credit fees,
equity-based compensation expense, net gains or losses on property
disposals, restructuring charges, transaction costs related to
issuances of debt, non-recurring consulting fees, non-cash
impairment charges and the gains or losses from permitted
dispositions, discontinued operations, and certain non-cash
expenses, charges and losses (provided that if any of such non-cash
expenses, charges or losses represents an accrual or reserve for
potential cash items in any future period, the cash payment in
respect thereof in such future period will be subtracted from
Adjusted EBITDA in such future period to the extent paid). Adjusted
EBITDA as used herein is defined as Consolidated EBITDA in our new
term loan facility entered into September 11, 2019, and as amended
on April 7, 2020. 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
our credit facilities and to determine certain management and
employee bonus compensation. We believe our presentation of EBITDA
and Adjusted EBITDA is useful to investors and other users as these
measures represent key supplemental information our management uses
to compare and evaluate our core underlying business results both
on a consolidated basis and across our business segments,
particularly in light of our leverage position and the
capital-intensive nature of our business. Further, EBITDA is a
measure that is commonly used by other companies in our industry
and provides a comparison for investors to evaluate the performance
of the companies in the industry. Additionally, Adjusted EBITDA
helps investors to understand how the company is tracking against
our financial covenant in our term loan credit agreement. However,
these financial measures should not be construed as better
measurements than net income, 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 service interest or fund principal
payments on our outstanding debt, letter of credit expenses,
restructuring charges, transaction costs related to debt, non-cash
charges, charges or losses (subject to the conditions above), or
nonrecurring consulting fees, among other items;
- 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 for certain employees, although
Adjusted EBITDA excludes employee equity-based compensation expense
when presenting our ongoing operating performance for a particular
period; and
- Other companies in our industry may calculate Adjusted EBITDA
differently than we do, limiting its usefulness as a comparative
measure.
Because of these limitations, our non-GAAP
measures 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 our non-GAAP measures as secondary measures. The
company has provided reconciliations of its non-GAAP measures to
GAAP net income (loss) 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,” “would,”
“should,” “may,” “project,” “forecast,” “look forward,”
“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) general economic factors and
transportation industry-specific economic conditions, including the
impact of COVID-19; our ability to generate sufficient liquidity to
satisfy our cash needs and future cash commitments, including
(without limitation) the impact of COVID-19 on our results of
operations, financial condition and cash flows; our obligations
related to our indebtedness and lease and pension funding
requirements, and our ability to achieve increased cash flows
through improvement in operations; our failure to comply with the
covenants in the documents governing our existing and future
indebtedness; customer demand in the retail and manufacturing
sectors; business risks and increasing costs associated with the
transportation industry, including increasing equipment,
operational and technology costs and disruption from natural
disasters; competition and competitive pressure on pricing; the
risk of labor disruptions or stoppages, if our relationship with
our employees and unions were to deteriorate; increasing pension
expense and funding obligations, subject to interest rate
volatility; increasing costs relating to our self-insurance claims
expenses; our ability to finance the maintenance, acquisition and
replacement of revenue equipment and other necessary capital
expenditures; our ability to comply and the cost of compliance
with, or liability resulting from violation of, federal, state,
local and foreign laws and regulations, including (without
limitation) labor laws and laws and regulations regarding the
environment; impediments to our operations and business resulting
from anti-terrorism measures; the impact of claims and litigation
expense to which we are or may become exposed; failure to realize
the expected benefits and costs savings from our performance and
operational improvement initiatives; our ability to attract and
retain qualified drivers and increasing costs of driver
compensation; a significant privacy breach or IT system disruption;
risks of operating in foreign countries; our dependence on key
employees; seasonality; shortages of fuel and 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; limitations on our operations, our
financing opportunities, potential strategic transactions,
acquisitions or dispositions resulting from restrictive covenants
in the documents governing our existing and future indebtedness;
fluctuations in the price of our common stock; dilution from future
issuances of our common stock; our intention not to pay dividends
on our common stock; that we have the ability to issue preferred
stock that may adversely affect the rights of holders of our common
stock; 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 Holland, New Penn,
Reddaway, and YRC Freight, as well as the logistics company HNRY
Logistics. Collectively, YRC Worldwide companies have one of the
largest, most comprehensive logistics and 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 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: Eric Birge
913-696-6108
investor@yrcw.com
Media Contact: Mike Kelley
913-696-6121
mike.kelley@yrcw.com
SOURCE: YRC Worldwide
CONSOLIDATED BALANCE SHEETS |
YRC Worldwide Inc. and Subsidiaries |
(Amounts in millions except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
December 31, |
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
ASSETS |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
264.2 |
|
|
$ |
109.2 |
|
|
Restricted amounts held in escrow |
|
|
56.0 |
|
|
|
- |
|
|
Accounts receivable, net |
|
|
496.2 |
|
|
|
464.4 |
|
|
Prepaid expenses and other |
|
|
42.9 |
|
|
|
44.6 |
|
|
|
Total current assets |
|
|
859.3 |
|
|
|
618.2 |
|
|
|
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT: |
|
|
|
|
|
|
|
|
|
Cost |
|
|
2,716.0 |
|
|
|
2,761.6 |
|
|
Less - accumulated depreciation |
|
|
(2,002.3 |
) |
|
|
(1,991.3 |
) |
|
|
Net property and equipment |
|
|
713.7 |
|
|
|
770.3 |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income taxes, net |
|
|
0.5 |
|
|
|
0.6 |
|
Operating lease right-of-use assets |
|
|
319.2 |
|
|
|
386.0 |
|
Other assets |
|
|
43.9 |
|
|
|
56.5 |
|
|
|
Total assets |
|
$ |
1,936.6 |
|
|
$ |
1,831.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
195.7 |
|
|
$ |
163.7 |
|
|
Wages, vacations, and employee benefits |
|
|
333.2 |
|
|
|
195.9 |
|
|
Current operating lease liabilities |
|
|
114.0 |
|
|
|
120.8 |
|
|
Other current and accrued liabilities |
|
|
155.8 |
|
|
|
167.5 |
|
|
Current maturities of long-term debt |
|
|
3.6 |
|
|
|
4.1 |
|
|
|
Total current liabilities |
|
|
802.3 |
|
|
|
652.0 |
|
|
|
|
|
|
|
|
|
|
|
|
OTHER LIABILITIES: |
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion |
|
|
871.1 |
|
|
|
858.1 |
|
|
Pension and postretirement |
|
|
225.9 |
|
|
|
236.5 |
|
|
Operating lease liabilities |
|
|
214.0 |
|
|
|
246.3 |
|
|
Claims and other liabilities |
|
|
290.2 |
|
|
|
279.9 |
|
|
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 |
|
|
2,335.5 |
|
|
|
2,332.9 |
|
|
Accumulated deficit |
|
|
(2,345.2 |
) |
|
|
(2,312.4 |
) |
|
Accumulated other comprehensive loss |
|
|
(364.8 |
) |
|
|
(369.3 |
) |
|
Treasury stock, at cost (410 shares) |
|
|
(92.7 |
) |
|
|
(92.7 |
) |
|
|
Total shareholders' deficit |
|
|
(466.9 |
) |
|
|
(441.2 |
) |
|
|
Total liabilities and shareholders' deficit |
|
$ |
1,936.6 |
|
|
$ |
1,831.6 |
|
|
|
|
|
|
|
|
|
|
|
|
STATEMENTS OF CONSOLIDATED COMPREHENSIVE LOSS |
YRC Worldwide Inc. and Subsidiaries |
For the Three and Six Months Ended June 30 |
(Amounts in millions except per share data, shares in
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
Six Months |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING REVENUE |
$ |
1,015.4 |
|
|
$ |
1,272.6 |
|
|
$ |
2,165.8 |
|
|
$ |
2,454.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and employee benefits |
|
647.9 |
|
|
|
782.3 |
|
|
|
1,368.1 |
|
|
|
1,500.5 |
|
|
Fuel, operating expenses and supplies |
|
162.7 |
|
|
|
228.3 |
|
|
|
370.7 |
|
|
|
464.2 |
|
|
Purchased transportation |
|
126.0 |
|
|
|
158.0 |
|
|
|
262.2 |
|
|
|
304.3 |
|
|
Depreciation and amortization |
|
34.2 |
|
|
|
38.5 |
|
|
|
69.9 |
|
|
|
78.5 |
|
|
Other operating expenses |
|
55.2 |
|
|
|
57.4 |
|
|
|
116.8 |
|
|
|
121.2 |
|
|
Gains on property disposals, net |
|
(6.0 |
) |
|
|
(6.2 |
) |
|
|
(45.3 |
) |
|
|
(4.6 |
) |
|
Impairment charges |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
8.2 |
|
|
|
Total operating expenses |
|
1,020.0 |
|
|
|
1,258.3 |
|
|
|
2,142.4 |
|
|
|
2,472.3 |
|
OPERATING INCOME (LOSS) |
|
(4.6 |
) |
|
|
14.3 |
|
|
|
23.4 |
|
|
|
(17.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONOPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
40.2 |
|
|
|
28.2 |
|
|
|
68.5 |
|
|
|
55.2 |
|
|
Non-union pension and postretirement benefits |
|
(1.6 |
) |
|
|
0.5 |
|
|
|
(3.2 |
) |
|
|
0.8 |
|
|
Other, net |
|
1.4 |
|
|
|
0.1 |
|
|
|
(1.2 |
) |
|
|
(0.1 |
) |
|
|
Nonoperating expenses, net |
|
40.0 |
|
|
|
28.8 |
|
|
|
64.1 |
|
|
|
55.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES |
|
(44.6 |
) |
|
|
(14.5 |
) |
|
|
(40.7 |
) |
|
|
(73.3 |
) |
INCOME TAX EXPENSE (BENEFIT) |
|
(7.5 |
) |
|
|
9.1 |
|
|
|
(7.9 |
) |
|
|
(0.6 |
) |
NET LOSS |
|
(37.1 |
) |
|
|
(23.6 |
) |
|
|
(32.8 |
) |
|
|
(72.7 |
) |
OTHER COMPREHENSIVE INCOME, NET OF TAX |
|
3.2 |
|
|
|
2.0 |
|
|
|
4.5 |
|
|
|
5.5 |
|
COMPREHENSIVE LOSS |
$ |
(33.9 |
) |
|
$ |
(21.6 |
) |
|
$ |
(28.3 |
) |
|
$ |
(67.2 |
) |
|
|
|
|
|
|
|
|
|
|
AVERAGE COMMON SHARES OUTSTANDING - BASIC |
|
34,021 |
|
|
|
33,247 |
|
|
|
33,906 |
|
|
|
33,199 |
|
AVERAGE COMMON SHARES OUTSTANDING - DILUTED |
|
34,021 |
|
|
|
33,247 |
|
|
|
33,906 |
|
|
|
33,199 |
|
|
|
|
|
|
|
|
|
|
|
LOSS PER SHARE - BASIC |
$ |
(1.09 |
) |
|
$ |
(0.71 |
) |
|
$ |
(0.97 |
) |
|
$ |
(2.19 |
) |
LOSS PER SHARE - DILUTED |
$ |
(1.09 |
) |
|
$ |
(0.71 |
) |
|
$ |
(0.97 |
) |
|
$ |
(2.19 |
) |
|
|
|
|
|
|
|
|
|
|
OPERATING RATIO (a): |
|
100.5 |
% |
|
|
98.9 |
% |
|
|
98.9 |
% |
|
|
100.7 |
% |
|
|
|
|
|
|
|
|
|
|
(a) |
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. |
STATEMENTS OF
CONSOLIDATED CASH FLOWSYRC Worldwide Inc. and SubsidiariesFor the
Six Months Ended June 30(Amounts in millions)(Unaudited) |
|
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
OPERATING ACTIVITIES: |
|
|
|
|
Net loss |
$ |
(32.8 |
) |
|
$ |
(72.7 |
) |
|
Adjustments to reconcile net loss to cash flows from operating
activities: |
|
|
|
|
|
|
|
|
|
Depreciation
and amortization |
|
69.9 |
|
|
|
78.5 |
|
|
|
Lease
amortization and accretion expense |
|
83.5 |
|
|
|
82.3 |
|
|
|
Lease
payments |
|
(55.7 |
) |
|
|
(75.4 |
) |
|
|
Paid-in-kind
interest |
|
38.8 |
|
|
|
- |
|
|
|
Equity-based
compensation and employee benefits expense |
|
10.5 |
|
|
|
9.5 |
|
|
|
Gains on
property disposals, net |
|
(45.3 |
) |
|
|
(4.6 |
) |
|
|
Impairment
charges |
|
- |
|
|
|
8.2 |
|
|
|
Deferred
income tax benefit, net |
|
0.1 |
|
|
|
(1.6 |
) |
|
|
Other
non-cash items, net |
|
4.8 |
|
|
|
2.1 |
|
|
Changes in assets and liabilities, net: |
|
|
|
|
|
|
|
|
|
Accounts
receivable |
|
(31.9 |
) |
|
|
(67.2 |
) |
|
|
Accounts
payable |
|
22.0 |
|
|
|
5.3 |
|
|
|
Other
operating assets |
|
8.6 |
|
|
|
(4.5 |
) |
|
|
Other
operating liabilities |
|
141.1 |
|
|
|
10.6 |
|
|
|
Net cash
provided by (used in) operating activities |
|
213.6 |
|
|
|
(29.5 |
) |
|
|
|
|
|
|
INVESTING ACTIVITIES: |
|
|
|
|
Acquisition of property and equipment |
|
(24.1 |
) |
|
|
(70.6 |
) |
|
Proceeds from disposal of property and equipment |
|
54.1 |
|
|
|
8.3 |
|
|
|
Net cash
provided by (used in) investing activities |
|
30.0 |
|
|
|
(62.3 |
) |
|
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
Repayment of long-term debt |
|
(28.2 |
) |
|
|
(17.5 |
) |
|
Debt issuance costs |
|
(3.8 |
) |
|
|
- |
|
|
Payments for tax withheld on equity-based compensation |
|
(0.6 |
) |
|
|
(0.8 |
) |
|
|
Net cash
used in financing activities |
|
(32.6 |
) |
|
|
(18.3 |
) |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED
AMOUNTS HELD IN ESCROW |
|
211.0 |
|
|
|
(110.1 |
) |
CASH, CASH EQUIVALENTS AND RESTRICTED AMOUNTS HELD IN ESCROW,
BEGINNING OF PERIOD |
|
109.2 |
|
|
|
227.6 |
|
CASH, CASH EQUIVALENTS AND RESTRICTED AMOUNTS HELD IN ESCROW, END
OF PERIOD |
$ |
320.2 |
|
|
$ |
117.5 |
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION |
|
|
|
Interest paid |
$ |
(22.1 |
) |
|
$ |
(50.6 |
) |
Income tax payment, net |
|
(0.6 |
) |
|
|
(2.5 |
) |
|
|
|
|
|
|
SUPPLEMENTAL FINANCIAL INFORMATION |
YRC Worldwide Inc. and Subsidiaries |
(Amounts in millions) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION: Total Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Issue |
|
|
|
As of June 30, 2020 |
|
Par Value |
|
Discount |
|
Costs |
|
Book Value |
|
New Term Loan |
|
$ |
613.5 |
|
$ |
(23.9 |
) |
|
$ |
(10.7 |
) |
|
$ |
578.9 |
|
|
ABL Facility |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Secured Second A&R CDA |
|
|
24.8 |
|
|
- |
|
|
|
(0.1 |
) |
|
|
24.7 |
|
|
Unsecured Second A&R CDA |
|
|
45.2 |
|
|
- |
|
|
|
(0.1 |
) |
|
|
45.1 |
|
|
Lease financing obligations |
|
|
226.3 |
|
|
- |
|
|
|
(0.3 |
) |
|
|
226.0 |
|
|
Total debt |
|
$ |
909.8 |
|
$ |
(23.9 |
) |
|
$ |
(11.2 |
) |
|
$ |
874.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Issue |
|
|
|
As of December 31, 2019 |
|
Par Value |
|
Discount |
|
Costs |
|
Book Value |
|
New Term Loan |
|
$ |
600.0 |
|
$ |
(28.1 |
) |
|
$ |
(12.0 |
) |
|
$ |
559.9 |
|
|
ABL Facility |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Secured Second A&R CDA |
|
|
26.0 |
|
|
- |
|
|
|
(0.1 |
) |
|
|
25.9 |
|
|
Unsecured Second A&R CDA |
|
|
45.2 |
|
|
- |
|
|
|
(0.1 |
) |
|
|
45.1 |
|
|
Lease financing obligations |
|
|
231.6 |
|
|
- |
|
|
|
(0.3 |
) |
|
|
231.3 |
|
|
Total debt |
|
$ |
902.8 |
|
$ |
(28.1 |
) |
|
$ |
(12.5 |
) |
|
$ |
862.2 |
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION: Liquidity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
Cash and cash equivalents |
|
|
|
|
|
$ |
264.2 |
|
|
$ |
109.2 |
|
|
Changes to restricted cash |
|
|
|
|
|
|
18.0 |
|
|
|
(29.0 |
) |
|
Managed Accessibility (a) |
|
|
|
|
|
|
20.4 |
|
|
|
0.2 |
|
|
Total Cash and cash equivalents and Managed
Accessibility |
|
|
|
|
$ |
302.6 |
|
|
$ |
80.4 |
|
|
|
|
|
|
|
|
|
|
|
(a) |
Managed
Accessibility represents the maximum amount we would access on the
ABL Facility and is adjusted for eligible receivables plus eligible
borrowing base cash measured for the applicable period. Based on
the eligible receivable’s management uses to measure availability,
which is 10% of the borrowing line, the credit agreement governing
the ABL Facility permits adjustments from eligible borrowing base
cash to restricted cash prior to the compliance measurement date
which is 15 days from the period close. |
|
SUPPLEMENTAL FINANCIAL INFORMATION |
YRC Worldwide Inc. and Subsidiaries |
For the Three and Six Months Ended June 30 |
(Amounts in millions) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
Six Months |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
Reconciliation of net income (loss) to Adjusted
EBITDA(a): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(37.1 |
) |
|
$ |
(23.6 |
) |
|
$ |
(32.8 |
) |
|
$ |
(72.7 |
) |
|
Interest expense, net |
|
40.2 |
|
|
|
27.8 |
|
|
|
68.4 |
|
|
|
54.3 |
|
|
Income tax expense (benefit) |
|
(7.5 |
) |
|
|
9.1 |
|
|
|
(7.9 |
) |
|
|
(0.6 |
) |
|
Depreciation and amortization |
|
34.2 |
|
|
|
38.5 |
|
|
|
69.9 |
|
|
|
78.5 |
|
|
EBITDA |
|
29.8 |
|
|
|
51.8 |
|
|
|
97.6 |
|
|
|
59.5 |
|
|
Adjustments for New Term Loan Agreement: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on property disposals, net |
|
(6.0 |
) |
|
|
(6.2 |
) |
|
|
(45.3 |
) |
|
|
(4.6 |
) |
|
Non-cash reserve changes(b) |
|
2.7 |
|
|
|
16.0 |
|
|
|
3.0 |
|
|
|
16.0 |
|
|
Impairment charges |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
8.2 |
|
|
Letter of credit expense |
|
1.6 |
|
|
|
1.6 |
|
|
|
3.2 |
|
|
|
3.2 |
|
|
Permitted dispositions and other |
|
- |
|
|
|
- |
|
|
|
0.2 |
|
|
|
(1.1 |
) |
|
Equity-based compensation expense |
|
1.2 |
|
|
|
1.1 |
|
|
|
3.2 |
|
|
|
3.4 |
|
|
Other, net |
|
2.1 |
|
|
|
1.0 |
|
|
|
0.5 |
|
|
|
2.1 |
|
|
Expense amounts subject to 10% threshold(c): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COVID-19 |
|
3.7 |
|
|
|
- |
|
|
|
3.9 |
|
|
|
- |
|
|
Other, net |
|
2.8 |
|
|
|
4.1 |
|
|
|
5.7 |
|
|
|
12.8 |
|
|
Adjusted EBITDA prior to 10% threshold |
|
37.9 |
|
|
|
69.4 |
|
|
|
72.0 |
|
|
|
99.5 |
|
|
Adjustments pursuant to TTM calculation(c) |
|
- |
|
|
|
(2.1 |
) |
|
|
- |
|
|
|
(2.1 |
) |
|
Adjusted EBITDA |
$ |
37.9 |
|
|
$ |
67.3 |
|
|
$ |
72.0 |
|
|
$ |
97.4 |
|
|
|
|
|
|
|
|
|
|
|
(a) |
Certain reclassifications have been made to prior year to conform
to current year presentation. |
(b) |
Non-cash reserve changes reflect the net non-cash reserve charge
for union and non-union vacation, with such non-cash reserve
adjustment to be reduced by cash charges in a future period when
paid. |
(c) |
Pursuant to the New Term Loan Agreement, Adjusted EBITDA limits
certain adjustments in aggregate to 10% of the
trailing-twelve-month ("TTM") consolidated Adjusted EBITDA, prior
to the inclusion of amounts subject to the 10% threshold, for each
period ending. Such adjustments include, but are not limited to,
restructuring charges, integration costs, severance, and
non-recurring charges. The limitation calculation is updated
quarterly based on TTM Adjusted EBITDA, however, the sum of the
quarters may not necessarily equal TTM Adjusted EBITDA due to the
expiration of adjustments from prior periods. |
SUPPLEMENTAL
FINANCIAL INFORMATION |
YRC Worldwide Inc.
and Subsidiaries |
For the Trailing
Twelve Months Ended June 30 |
(Amounts in
millions) |
(Unaudited) |
|
|
|
|
|
2020 |
|
|
2019 |
|
Reconciliation of net loss to Adjusted
EBITDA(a): |
|
|
|
|
|
|
Net
loss |
$ |
(64.1 |
) |
$ |
(52.3 |
) |
Interest expense, net |
|
124.0 |
|
|
107.8 |
|
Income tax expense |
|
(11.6 |
) |
|
13.0 |
|
Depreciation and amortization |
|
143.8 |
|
|
150.9 |
|
EBITDA |
|
192.1 |
|
|
219.4 |
|
Adjustments
for Term Loan Agreement: |
|
|
|
|
|
|
Gains on property disposals, net |
|
(54.4 |
) |
|
(30.8 |
) |
Non-cash reserve changes(b) |
|
3.1 |
|
|
16.0 |
|
Impairment charges |
|
- |
|
|
8.2 |
|
Letter of credit expense |
|
6.5 |
|
|
6.4 |
|
Permitted dispositions and other |
|
0.4 |
|
|
(1.5 |
) |
Equity-based compensation expense |
|
6.1 |
|
|
4.9 |
|
Loss on extinguishment of debt |
|
11.2 |
|
|
- |
|
Non-union pension settlement charge |
|
1.8 |
|
|
10.9 |
|
Other, net |
|
1.3 |
|
|
1.9 |
|
Expense amounts subject to 10% threshold(c): |
|
|
|
|
|
|
COVID-19 |
|
3.9 |
|
|
- |
|
Other, net |
|
11.1 |
|
|
25.8 |
|
Adjusted
EBITDA prior to 10% threshold |
|
183.1 |
|
|
261.2 |
|
Adjustments pursuant to TTM calculation(c) |
|
- |
|
|
(2.1 |
) |
Adjusted
EBITDA |
$ |
183.1 |
|
$ |
259.1 |
|
|
|
|
|
|
|
|
For explanations of footnotes (a), (b) and (c), please refer to
previous page. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YRC Worldwide Inc. |
|
Statistics |
|
Quarterly Comparison |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Y/Y |
|
Sequential |
|
|
2Q20 |
|
2Q19 |
|
1Q20 |
|
% (b) |
|
% (a) |
|
Workdays |
|
63.0 |
|
|
63.5 |
|
|
|
65.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTL picked up revenue (in millions) |
$ |
929.8 |
|
$ |
1,167.2 |
|
|
$ |
1,049.6 |
|
|
(20.3 |
) |
|
(11.4 |
) |
|
LTL tonnage (in thousands) |
|
2,283 |
|
|
2,702 |
|
|
|
2,544 |
|
|
(15.5 |
) |
|
(10.3 |
) |
|
LTL tonnage per day (in thousands) |
|
36.24 |
|
|
42.54 |
|
|
|
38.85 |
|
|
(14.8 |
) |
|
(6.7 |
) |
|
LTL shipments (in thousands) |
|
4,003 |
|
|
4,803 |
|
|
|
4,323 |
|
|
(16.7 |
) |
|
(7.4 |
) |
|
LTL shipments per day (in thousands) |
|
63.53 |
|
|
75.64 |
|
|
|
66.00 |
|
|
(16.0 |
) |
|
(3.7 |
) |
|
LTL picked up revenue/cwt. |
$ |
20.36 |
|
$ |
21.60 |
|
|
$ |
20.63 |
|
|
(5.7 |
) |
|
(1.3 |
) |
|
LTL picked up revenue/cwt. (excl. FSC) |
$ |
18.48 |
|
$ |
18.98 |
|
|
$ |
18.27 |
|
|
(2.6 |
) |
|
1.2 |
|
|
LTL picked up revenue/shipment |
$ |
232 |
|
$ |
243 |
|
|
$ |
243 |
|
|
(4.4 |
) |
|
(4.3 |
) |
|
LTL picked up revenue/shipment (excl. FSC) |
$ |
211 |
|
$ |
214 |
|
|
$ |
215 |
|
|
(1.2 |
) |
|
(1.9 |
) |
|
LTL weight/shipment (in pounds) |
|
1,141 |
|
|
1,125 |
|
|
|
1,177 |
|
|
1.4 |
|
|
(3.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total picked up revenue (in millions)(b) |
$ |
1,018.4 |
|
$ |
1,264.0 |
|
|
$ |
1,141.4 |
|
|
(19.4 |
) |
|
(10.8 |
) |
|
Total tonnage (in thousands) |
|
2,926 |
|
|
3,375 |
|
|
|
3,234 |
|
|
(13.3 |
) |
|
(9.5 |
) |
|
Total tonnage per day (in thousands) |
|
46.44 |
|
|
53.16 |
|
|
|
49.37 |
|
|
(12.6 |
) |
|
(5.9 |
) |
|
Total shipments (in thousands) |
|
4,122 |
|
|
4,912 |
|
|
|
4,426 |
|
|
(16.1 |
) |
|
(6.9 |
) |
|
Total shipments per day (in thousands) |
|
65.44 |
|
|
77.35 |
|
|
|
67.57 |
|
|
(15.4 |
) |
|
(3.2 |
) |
|
Total revenue/cwt. |
$ |
17.40 |
|
$ |
18.72 |
|
|
$ |
17.65 |
|
|
(7.0 |
) |
|
(1.4 |
) |
|
Total revenue/cwt. (excl. FSC) |
$ |
15.85 |
|
$ |
16.51 |
|
|
$ |
15.69 |
|
|
(4.0 |
) |
|
1.1 |
|
|
Total revenue/shipment |
$ |
247 |
|
$ |
257 |
|
|
$ |
258 |
|
|
(4.0 |
) |
|
(4.2 |
) |
|
Total revenue/shipment (excl. FSC) |
$ |
225 |
|
$ |
227 |
|
|
$ |
229 |
|
|
(0.8 |
) |
|
(1.8 |
) |
|
Total weight/shipment (in pounds) |
|
1,419 |
|
|
1,374 |
|
|
|
1,461 |
|
|
3.3 |
|
|
(2.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)Reconciliation of operating revenue to
total picked up revenue (in millions): |
|
|
|
|
|
|
Operating revenue |
$ |
1,015.4 |
|
$ |
1,272.6 |
|
|
$ |
1,150.4 |
|
|
|
|
|
|
Change in revenue deferral and other |
|
3.0 |
|
|
(8.6 |
) |
|
|
(9.0 |
) |
|
|
|
|
|
Total picked up revenue |
$ |
1,018.4 |
|
$ |
1,264.0 |
|
|
$ |
1,141.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Percent change based on unrounded figures and not the rounded
figures presented. |
|
|
|
|
|
(b) |
Does not equal financial statement revenue due to revenue
adjustments for shipments in transit and the impact of other
revenue. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YRC Worldwide Inc. |
|
Statistics |
|
YTD Comparison |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Y/Y |
|
|
2020 |
|
|
2019 |
|
|
% (a) |
Workdays |
|
128.5 |
|
|
|
126.5 |
|
|
|
|
|
|
|
|
|
|
|
|
LTL picked up revenue (in millions) |
$ |
1,979.3 |
|
|
$ |
2,253.5 |
|
|
(12.2 |
) |
LTL tonnage (in thousands) |
|
4,827 |
|
|
|
5,226 |
|
|
(7.6 |
) |
LTL tonnage per day (in thousands) |
|
37.57 |
|
|
|
41.31 |
|
|
(9.1 |
) |
LTL shipments (in thousands) |
|
8,325 |
|
|
|
9,259 |
|
|
(10.1 |
) |
LTL shipments per day (in thousands) |
|
64.79 |
|
|
|
73.19 |
|
|
(11.5 |
) |
LTL picked up revenue/cwt. |
$ |
20.50 |
|
|
$ |
21.56 |
|
|
(4.9 |
) |
LTL picked up revenue/cwt. (excl. FSC) |
$ |
18.37 |
|
|
$ |
19.00 |
|
|
(3.3 |
) |
LTL picked up revenue/shipment |
$ |
238 |
|
|
$ |
243 |
|
|
(2.3 |
) |
LTL picked up revenue/shipment (excl. FSC) |
$ |
213 |
|
|
$ |
214 |
|
|
(0.7 |
) |
LTL weight/shipment (in pounds) |
|
1,160 |
|
|
|
1,129 |
|
|
2.7 |
|
|
|
|
|
|
|
|
|
|
Total picked up revenue (in millions) (b) |
$ |
2,159.8 |
|
|
$ |
2,440.4 |
|
|
(11.5 |
) |
Total tonnage (in thousands) |
|
6,159 |
|
|
|
6,530 |
|
|
(5.7 |
) |
Total tonnage per day (in thousands) |
|
47.93 |
|
|
|
51.62 |
|
|
(7.1 |
) |
Total shipments (in thousands) |
|
8,548 |
|
|
|
9,461 |
|
|
(9.6 |
) |
Total shipments per day (in thousands) |
|
66.52 |
|
|
|
74.79 |
|
|
(11.0 |
) |
Total picked up revenue/cwt. |
$ |
17.53 |
|
|
$ |
18.69 |
|
|
(6.2 |
) |
Total picked up revenue/cwt. (excl. FSC) |
$ |
15.77 |
|
|
$ |
16.52 |
|
|
(4.5 |
) |
Total picked up revenue/shipment |
$ |
253 |
|
|
$ |
258 |
|
|
(2.1 |
) |
Total picked up revenue/shipment (excl. FSC) |
$ |
227 |
|
|
$ |
228 |
|
|
(0.3 |
) |
Total weight/shipment (in pounds) |
|
1,441 |
|
|
|
1,380 |
|
|
4.4 |
|
|
|
|
|
|
|
|
|
|
|
(a) Reconciliation of operating revenue to
total picked up revenue (in millions): |
|
|
|
Operating revenue |
$ |
2,165.8 |
|
|
$ |
2,454.9 |
|
|
|
|
Change in revenue deferral and other |
|
(6.0 |
) |
|
|
(14.5 |
) |
|
|
|
Total picked up revenue |
$ |
2,159.8 |
|
|
$ |
2,440.4 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Percent change based on unrounded figures and not the rounded
figures presented. |
|
|
|
|
|
|
|
|
|
(b) |
Does not equal financial statement revenue due to revenue
adjustments for shipments in transit and the impact of other
revenue. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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