Exhibit 99.1
| 10990 Roe Avenue Overland Park, KS 66211 Phone 913 696 6100 Fax 913 696 6116 News Release |
|
YRC Worldwide Reports Third Quarter 2016 Results
Results include Operating Income of $38.8 million and Adjusted EBITDA of $85.5 million
OVERLAND PARK, Kan., October 27, 2016 — YRC Worldwide Inc. (NASDAQ: YRCW) reported consolidated operating revenue for third quarter 2016 of $1.221 billion and consolidated operating income of $38.8 million, which included a $0.2 million loss on property disposals. As a comparison, the Company reported consolidated operating revenue of $1.245 billion for the third quarter 2015 and consolidated operating income of $47.7 million, which included a $0.9 million loss on property disposals.
Financial Highlights
| • | On a non-GAAP basis, the Company generated Adjusted EBITDA of $85.5 million in third quarter 2016 for a consolidated Adjusted EBITDA margin of 7.0% and a $13.6 million decrease compared to the $99.1 million of Adjusted EBITDA reported in the prior year comparable quarter (as detailed in the reconciliation below). |
| • | Last twelve month (LTM) Adjusted EBITDA is $305.8 million for a consolidated Adjusted EBITDA margin of 6.5%, and a decrease of $38.5 million from the $344.3 million of LTM Adjusted EBITDA in third quarter 2015. |
| • | The total debt-to-Adjusted EBITDA ratio for third quarter 2016 was 3.45 times compared to 3.15 times for third quarter 2015. This complies with the 3.75 maximum total leverage ratio covenant as of September 30, 2016 under the Company’s term loan credit agreement. |
| • | Reinvestment in the business continued during third quarter 2016 with $28.1 million in capital expenditures and new operating leases for revenue equipment with a capital value equivalent of $44.1 million. The total of $72.2 million is equal to 5.9% of operating revenue for the quarter and represents a $10.1 million increase over the $62.1 million in third quarter 2015. Tractors, trailers and technology were the primary investments during the quarter. |
Operational Highlights
| • | The consolidated operating ratio for third quarter 2016 was 96.8 compared to 96.2 for the same period in 2015. YRC Freight improved its reported operating ratio by 60 basis points to 97.3. The improvement at YRC Freight was more than offset by a decline of 250 basis points at the Regional segment with a reported operating ratio of 95.1 for third quarter 2016. |
| • | Third quarter 2016 tonnage per day decreased 1.3% at YRC Freight and 1.5% at the Regional segment compared to third quarter 2015. |
| • | At YRC Freight, excluding fuel surcharge, third quarter 2016 revenue per shipment increased 1.3% and revenue per hundredweight increased by 0.3% when compared to the same period in 2015. Including fuel surcharge, revenue per shipment decreased 0.4% and revenue per hundredweight decreased by 1.4%. |
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| • | At the Regional segment, excluding fuel surcharge, third quarter 2016 revenue per shipment increased 0.3% and revenue per hundredweight increased by 1.5% compared to the third quarter 2015. Including fuel surcharge, revenue per shipment decreased 0.9% and revenue per hundredweight increased 0.3%. |
| • | Third quarter 2016 liability claims expense and workers compensation expense were comparable to third quarter 2015. |
Liquidity Update
| • | At September 30, 2016, the company had cash, cash equivalents and Managed Accessibility (as defined in the company’s most recently filed periodic reports on Forms 10-K and 10-Q) under its ABL facility totaling $290.1 million, an increase of $45.3 million compared to $244.8 million as of September 30, 2015. |
| • | For the nine months ended September 30, 2016, cash provided by operating activities was $86.0 million compared to $91.5 million for the nine months ended September 30, 2015. |
“Our third quarter 2016 financial results were impacted by the soft industrial backdrop and lower fuel surcharge revenue compared to a year ago,” said James Welch, chief executive office at YRC Worldwide. “Year-over-year tonnage per day was down during the quarter although it was the smallest decline at YRC Freight and the Regional segment in several quarters. We continue to believe pricing discipline in the LTL sector remains steady despite the near-term headwinds,” stated Welch.
“We are managing through the current state of the economy by continuing to invest in technology and revenue equipment while focusing on actions that position our Company well for the long-term such as customer service and enhancing safety,” Welch continued. “We recently opened a new terminal in the Atlanta region, adding to our extensive networks. The new YRC Freight facility has strengthened our customer service in the Southeast Region. Following the recent installations of the in-cab safety technology, we are seeing a reduction in the type of accidents at YRC Freight, Holland, Reddaway and New Penn that these investments were designed to prevent. Other significant technology investments that we are making include driver handheld units and Optym load plan and Quintiq route optimization solutions. We plan to continue making disciplined and strategic investments to meet our commitment to be best in class in safety and customer service.
“We believe the investments that we are making in the Company combined with our highly-experienced employees, comprehensive North American coverage and tremendous asset base position us well for a stronger freight environment,” concluded Welch.
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Key Segment Information – third quarter 2016 compared to third quarter 2015
| YRC Freight |
2016 | 2015 | Percent Change |
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| Workdays |
64.0 | 64.0 | ||||||||||
| Operating revenue (in millions) |
$ | 777.9 | $ | 789.2 | (1.4 | )% | ||||||
| Operating income (in millions) |
$ | 20.8 | $ | 16.7 | 24.6 | % | ||||||
| Operating ratio |
97.3 | 97.9 | 0.6 | pp | ||||||||
| Total tonnage per day (in thousands) |
25.31 | 25.64 | (1.3 | )% | ||||||||
| Total shipments per day (in thousands) |
41.84 | 42.82 | (2.3 | )% | ||||||||
| Total picked up revenue per hundredweight incl FSC |
$ | 23.57 | $ | 23.90 | (1.4 | )% | ||||||
| Total picked up revenue per hundredweight excl FSC |
$ | 21.31 | $ | 21.24 | 0.3 | % | ||||||
| Total picked up revenue per shipment incl FSC |
$ | 285 | $ | 286 | (0.4 | )% | ||||||
| Total picked up revenue per shipment excl FSC |
$ | 258 | $ | 254 | 1.3 | % | ||||||
| Total weight/shipment (in pounds) |
1,210 | 1,198 | 1.0 | % | ||||||||
| Regional Transportation |
2016 | 2015 | Percent Change |
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| Workdays |
63.0 | 64.0 | ||||||||||
| Operating revenue (in millions) |
$ | 443.7 | $ | 455.7 | (2.6 | )% | ||||||
| Operating income (in millions) |
$ | 21.9 | $ | 33.6 | (34.8 | )% | ||||||
| Operating ratio |
95.1 | 92.6 | (2.5 | )pp | ||||||||
| Total tonnage per day (in thousands) |
30.38 | 30.85 | (1.5 | )% | ||||||||
| Total shipments per day (in thousands) |
41.62 | 41.76 | (0.3 | )% | ||||||||
| Total picked up revenue per hundredweight incl FSC |
$ | 11.58 | $ | 11.55 | 0.3 | % | ||||||
| Total picked up revenue per hundredweight excl FSC |
$ | 10.48 | $ | 10.32 | 1.5 | % | ||||||
| Total picked up revenue per shipment incl FSC |
$ | 169 | $ | 171 | (0.9 | )% | ||||||
| Total picked up revenue per shipment excl FSC |
$ | 153 | $ | 153 | 0.3 | % | ||||||
| Total weight/shipment (in pounds) |
1,460 | 1,478 | (1.2 | )% | ||||||||
Review of Financial Results
YRC Worldwide Inc. will host a conference call with the investment community today, Thursday, October 27, 2016, beginning at 4:30 p.m. ET, 3:30 p.m. CT.
A live audio webcast of the conference call and presentation slides will be available on YRC Worldwide Inc.’s website yrcw.com. A replay of the webcast will also be available at 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 International Brotherhood of Teamster employees and gains or losses from 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 and to pay certain executive bonus compensation. 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 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 Memorandum of Understanding; |
| • | 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; |
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| • | 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, EBITDA 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,” “should,” “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 indebtedness (including compliance with scheduled increases in financial performance related debt covenants) and lease and pension funding requirements; our ability to amend our term loan credit facility to obtain covenant relief, if necessary, which would be largely outside of our control; the success of our management team in continuing with its strategic plan and operational and productivity improvements, including (without limitation) our continued ability to meet quality delivery performance standards, and our ability to increase volume and yield and the impact of those improvements to meet our future liquidity and profitability; the uncertainty in the overall economy; our ability to finance the maintenance, acquisition and replacement of revenue equipment and other necessary capital expenditures; our dependence on our information technology systems in our network operations and the production of accurate information, as well as the risk of system failure, inadequacy or security breach; changes in equity and debt markets; inclement weather; price 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 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, as well as state and federal labor laws; 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 flexible supply chain solutions, ensuring customers can ship industrial, commercial and retail goods with confidence.
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Please visit our website at www.yrcw.com for more information.
| Investor Contact: | Tony Carreño | |||
| 913-696-6108 | ||||
| investor@yrcw.com | ||||
| Media Contact: | Mike Kelley | |||
| 916-696-6121 | ||||
| mike.kelley@yrcw.com | ||||
SOURCE: YRC Worldwide
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CONSOLIDATED BALANCE SHEETS
YRC Worldwide Inc. and Subsidiaries
(Amounts in millions except share and per share data)
| September 30, | December 31, | |||||||
| 2016 | 2015 | |||||||
| (Unaudited) | ||||||||
| ASSETS |
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| CURRENT ASSETS: |
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| Cash and cash equivalents |
$ | 276.4 | $ | 173.8 | ||||
| Restricted amounts held in escrow |
43.0 | 58.8 | ||||||
| Accounts receivable, net |
477.8 | 427.4 | ||||||
| Prepaid expenses and other |
75.3 | 74.4 | ||||||
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| Total current assets |
872.5 | 734.4 | ||||||
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| PROPERTY AND EQUIPMENT: |
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| Cost |
2,815.7 | 2,822.8 | ||||||
| Less - accumulated depreciation |
(1,927.9 | ) | (1,885.5 | ) | ||||
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| Net property and equipment |
887.8 | 937.3 | ||||||
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| Intangibles, net |
30.7 | 40.4 | ||||||
| Restricted amounts held in escrow |
— | 63.4 | ||||||
| Deferred income taxes, net |
23.0 | 23.0 | ||||||
| Other assets |
56.6 | 80.9 | ||||||
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| Total assets |
$ | 1,870.6 | $ | 1,879.4 | ||||
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| LIABILITIES AND SHAREHOLDERS’ DEFICIT |
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| CURRENT LIABILITIES: |
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| Accounts payable |
$ | 163.9 | $ | 161.1 | ||||
| Wages, vacations, and employee benefits |
203.6 | 195.1 | ||||||
| Deferred income taxes, net |
23.0 | 23.0 | ||||||
| Other current and accrued liabilities |
175.3 | 178.4 | ||||||
| Current maturities of long-term debt |
16.6 | 15.9 | ||||||
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| Total current liabilities |
582.4 | 573.5 | ||||||
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| OTHER LIABILITIES: |
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| Long-term debt, less current portion |
1,023.9 | 1,046.5 | ||||||
| Deferred income taxes, net |
3.8 | 3.7 | ||||||
| Pension and postretirement |
311.4 | 339.9 | ||||||
| Claims and other liabilities |
291.3 | 295.2 | ||||||
| Commitments and contingencies |
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| SHAREHOLDERS’ DEFICIT: |
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| Preferred stock, $1 par value per share |
— | — | ||||||
| Common stock, $0.01 par value per share |
0.3 | 0.3 | ||||||
| Capital surplus |
2,317.9 | 2,312.6 | ||||||
| Accumulated deficit |
(2,210.3 | ) | (2,239.3 | ) | ||||
| Accumulated other comprehensive loss |
(357.4 | ) | (360.3 | ) | ||||
| Treasury stock, at cost (410 shares) |
(92.7 | ) | (92.7 | ) | ||||
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| Total shareholders’ deficit |
(342.2 | ) | (379.4 | ) | ||||
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| Total liabilities and shareholders’ deficit |
$ | 1,870.6 | $ | 1,879.4 | ||||
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STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
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 | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| OPERATING REVENUE |
$ | 1,221.3 | $ | 1,244.9 | $ | 3,549.2 | $ | 3,689.7 | ||||||||
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| OPERATING EXPENSES: |
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| Salaries, wages and employee benefits |
715.8 | 725.8 | 2,132.6 | 2,148.6 | ||||||||||||
| Operating expenses and supplies |
206.9 | 217.1 | 595.7 | 678.1 | ||||||||||||
| Purchased transportation |
156.8 | 149.6 | 409.0 | 431.0 | ||||||||||||
| Depreciation and amortization |
40.3 | 40.7 | 119.5 | 123.6 | ||||||||||||
| Other operating expenses |
62.5 | 63.1 | 194.2 | 198.6 | ||||||||||||
| (Gains) losses on property disposals, net |
0.2 | 0.9 | (11.2 | ) | 1.5 | |||||||||||
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| Total operating expenses |
1,182.5 | 1,197.2 | 3,439.8 | 3,581.4 | ||||||||||||
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| OPERATING INCOME |
38.8 | 47.7 | 109.4 | 108.3 | ||||||||||||
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| NONOPERATING EXPENSES: |
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| Interest expense |
25.6 | 25.7 | 77.9 | 81.2 | ||||||||||||
| Loss on extinguishment of debt |
— | — | — | 0.6 | ||||||||||||
| Other, net |
(1.2 | ) | (4.5 | ) | (0.9 | ) | (8.1 | ) | ||||||||
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| Nonoperating expenses, net |
24.4 | 21.2 | 77.0 | 73.7 | ||||||||||||
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| INCOME BEFORE INCOME TAXES |
14.4 | 26.5 | 32.4 | 34.6 | ||||||||||||
| INCOME TAX EXPENSE |
0.5 | 6.7 | 3.4 | 10.4 | ||||||||||||
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| NET INCOME |
13.9 | 19.8 | 29.0 | 24.2 | ||||||||||||
| OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX |
2.3 | (1.9 | ) | 2.9 | 2.9 | |||||||||||
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| COMPREHENSIVE INCOME ATTRIBUTABLE TO YRC WORLDWIDE INC. |
$ | 16.2 | $ | 17.9 | $ | 31.9 | $ | 27.1 | ||||||||
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| AVERAGE COMMON SHARES OUTSTANDING - BASIC |
32,466 | 32,065 | 32,398 | 31,602 | ||||||||||||
| AVERAGE COMMON SHARES OUTSTANDING - DILUTED |
33,194 | 32,621 | 32,915 | 32,569 | ||||||||||||
| EARNINGS PER SHARE - BASIC |
$ | 0.43 | $ | 0.62 | $ | 0.89 | $ | 0.76 | ||||||||
| EARNINGS PER SHARE - DILUTED |
$ | 0.42 | $ | 0.61 | $ | 0.88 | $ | 0.74 | ||||||||
STATEMENTS OF CONSOLIDATED CASH FLOWS
YRC Worldwide Inc. and Subsidiaries
For the Nine Months Ended September 30
(Amounts in millions)
(Unaudited)
| 2016 | 2015 | |||||||
| OPERATING ACTIVITIES: |
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| Net income |
$ | 29.0 | $ | 24.2 | ||||
| Noncash items included in net income: |
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| Depreciation and amortization |
119.5 | 123.6 | ||||||
| Noncash equity-based compensation and employee benefits expense |
16.2 | 18.5 | ||||||
| (Gains) losses on property disposals, net |
(11.2 | ) | 1.5 | |||||
| Gain on disposal of equity method investment |
(2.3 | ) | — | |||||
| Other noncash items, net |
7.6 | 0.7 | ||||||
| Changes in assets and liabilities, net: |
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| Accounts receivable |
(49.7 | ) | (29.4 | ) | ||||
| Accounts payable |
0.8 | 10.0 | ||||||
| Other operating assets |
4.1 | (7.3 | ) | |||||
| Other operating liabilities |
(28.0 | ) | (50.3 | ) | ||||
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| Net cash provided by operating activities |
86.0 | 91.5 | ||||||
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| INVESTING ACTIVITIES: |
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| Acquisition of property and equipment |
(75.4 | ) | (71.8 | ) | ||||
| Proceeds from disposal of property and equipment |
26.5 | 15.7 | ||||||
| Restricted escrow receipts |
112.1 | 41.9 | ||||||
| Restricted escrow deposits |
(32.9 | ) | (25.0 | ) | ||||
| Proceeds from disposal of equity method investment, net |
14.6 | — | ||||||
| Other, net |
— | 0.4 | ||||||
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| Net cash provided by (used in) investing activities |
44.9 | (38.8 | ) | |||||
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| FINANCING ACTIVITIES: |
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| Repayment of long-term debt |
(26.5 | ) | (13.1 | ) | ||||
| Debt issuance costs |
(1.8 | ) | — | |||||
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| Net cash used in financing activities |
(28.3 | ) | (13.1 | ) | ||||
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| NET INCREASE IN CASH AND CASH EQUIVALENTS |
102.6 | 39.6 | ||||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
173.8 | 171.1 | ||||||
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| CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ | 276.4 | $ | 210.7 | ||||
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| SUPPLEMENTAL CASH FLOW INFORMATION |
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| Interest paid |
$ | (68.5 | ) | $ | (79.3 | ) | ||
| Income tax payments, net |
(4.1 | ) | (1.6 | ) | ||||
| Debt redeemed for equity consideration |
— | 17.9 | ||||||
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 | |||||||||||||||||||||||
| 2016 | 2015 | % | 2016 | 2015 | % | |||||||||||||||||||
| Operating revenue: |
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| YRC Freight |
$ | 777.9 | $ | 789.2 | (1.4 | ) | $ | 2,228.6 | $ | 2,322.0 | (4.0 | ) | ||||||||||||
| Regional Transportation |
443.7 | 455.7 | (2.6 | ) | 1,321.3 | 1,367.7 | (3.4 | ) | ||||||||||||||||
| Other, net of eliminations |
(0.3 | ) | — | (0.7 | ) | — | ||||||||||||||||||
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| Consolidated |
1,221.3 | 1,244.9 | (1.9 | ) | 3,549.2 | 3,689.7 | (3.8 | ) | ||||||||||||||||
| Operating income (loss): |
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| YRC Freight |
20.8 | 16.7 | 53.3 | 39.4 | ||||||||||||||||||||
| Regional Transportation |
21.9 | 33.6 | 64.9 | 75.9 | ||||||||||||||||||||
| Corporate and other |
(3.9 | ) | (2.6 | ) | (8.8 | ) | (7.0 | ) | ||||||||||||||||
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| Consolidated |
$ | 38.8 | $ | 47.7 | $ | 109.4 | $ | 108.3 | ||||||||||||||||
| Operating ratio: |
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| YRC Freight |
97.3 | % | 97.9 | % | 97.6 | % | 98.3 | % | ||||||||||||||||
| Regional Transportation |
95.1 | % | 92.6 | % | 95.1 | % | 94.5 | % | ||||||||||||||||
| Consolidated |
96.8 | % | 96.2 | % | 96.9 | % | 97.1 | % | ||||||||||||||||
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
| Debt Issue | ||||||||||||||||
| As of September 30, 2016 |
Par Value | Discount | Costs | Book Value | ||||||||||||
| Term Loan |
$ | 680.8 | $ | (3.2 | ) | $ | (9.7 | ) | $ | 667.9 | ||||||
| ABL Facility (a) |
— | — | — | — | ||||||||||||
| Secured Second A&R CDA |
29.0 | — | (0.2 | ) | 28.8 | |||||||||||
| Unsecured Second A&R CDA |
73.2 | — | (0.4 | ) | 72.8 | |||||||||||
| Lease financing obligations |
272.4 | — | (1.4 | ) | 271.0 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total debt |
$ | 1,055.4 | $ | (3.2 | ) | $ | (11.7 | ) | $ | 1,040.5 | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Debt Issue | ||||||||||||||||
| As of December 31, 2015 |
Par Value | Discount | Costs | Book Value | ||||||||||||
| Term Loan |
$ | 686.0 | $ | (4.3 | ) | $ | (12.7 | ) | $ | 669.0 | ||||||
| ABL Facility (b) |
— | — | — | — | ||||||||||||
| Secured Second A&R CDA |
44.7 | — | (0.3 | ) | 44.4 | |||||||||||
| Unsecured Second A&R CDA |
73.2 | — | (0.5 | ) | 72.7 | |||||||||||
| Lease financing obligations |
278.0 | — | (1.7 | ) | 276.3 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total debt |
$ | 1,081.9 | $ | (4.3 | ) | $ | (15.2 | ) | $ | 1,062.4 | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
Our total leverage ratio for the four consecutive fiscal quarters ended September 30, 2016 was 3.45 to 1.00.
| (a) | ABL Facility capacity $450.0M; borrowing base $412.6M; maximum availability $55.0M; Managed Accessibility $13.7M. Managed Accessibility is defined as maximum availability less the lower of 10% of the borrowing base or 10% of the facility size. |
| (b) | ABL Facility capacity $450.0M; borrowing base $441.7M; maximum availability $79.7M; Managed Accessibility $35.5M. Managed Accessibility is defined as maximum availability less the lower of 10% of the borrowing base or 10% of the facility size. |
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 | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Reconciliation of net income to Adjusted EBITDA: |
||||||||||||||||
| Net income |
$ | 13.9 | $ | 19.8 | $ | 29.0 | $ | 24.2 | ||||||||
| Interest expense, net |
25.5 | 25.6 | 77.6 | 80.9 | ||||||||||||
| Income tax expense |
0.5 | 6.7 | 3.4 | 10.4 | ||||||||||||
| Depreciation and amortization |
40.3 | 40.7 | 119.5 | 123.6 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| EBITDA |
80.2 | 92.8 | 229.5 | 239.1 | ||||||||||||
| Adjustments for Term Loan Agreement: |
||||||||||||||||
| (Gains) losses on property disposals, net |
0.2 | 0.9 | (11.2 | ) | 1.5 | |||||||||||
| Letter of credit expense |
1.7 | 2.2 | 6.0 | 6.6 | ||||||||||||
| Restructuring professional fees |
— | 0.2 | — | 0.2 | ||||||||||||
| Nonrecurring consulting fees |
— | (0.8 | ) | — | 5.1 | |||||||||||
| Permitted dispositions and other |
2.2 | — | 1.8 | 0.3 | ||||||||||||
| Equity-based compensation expense |
1.5 | 2.8 | 6.0 | 6.5 | ||||||||||||
| Amortization of ratification bonus |
— | 4.6 | 4.6 | 14.4 | ||||||||||||
| Loss on extinguishment of debt |
— | — | — | 0.6 | ||||||||||||
| Other, net (a) |
(0.3 | ) | (3.6 | ) | 3.1 | (7.0 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 85.5 | $ | 99.1 | $ | 239.8 | $ | 267.3 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating revenue |
$ | 1,221.3 | $ | 1,244.9 | $ | 3,549.2 | $ | 3,689.7 | ||||||||
| Adjusted EBITDA margin |
7.0 | % | 8.0 | % | 6.8 | % | 7.2 | % | ||||||||
| (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. |
| Three Months | Nine Months | |||||||||||||||
| Adjusted EBITDA by segment: |
2016 | 2015 | 2016 | 2015 | ||||||||||||
| YRC Freight |
$ | 45.3 | $ | 45.2 | $ | 119.3 | $ | 130.4 | ||||||||
| Regional Transportation |
40.2 | 52.9 | 121.3 | 135.7 | ||||||||||||
| Corporate and other |
— | 1.0 | (0.8 | ) | 1.2 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 85.5 | $ | 99.1 | $ | 239.8 | $ | 267.3 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
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 |
2016 | 2015 | 2016 | 2015 | ||||||||||||
| Reconciliation of operating income to Adjusted EBITDA: |
||||||||||||||||
| Operating income |
$ | 20.8 | $ | 16.7 | $ | 53.3 | $ | 39.4 | ||||||||
| Depreciation and amortization |
22.9 | 23.3 | 67.9 | 70.5 | ||||||||||||
| (Gains) losses on property disposals, net |
— | 1.1 | (12.0 | ) | 1.7 | |||||||||||
| Letter of credit expense |
1.1 | 1.6 | 3.9 | 4.6 | ||||||||||||
| Nonrecurring consulting fees |
— | (0.8 | ) | — | 5.1 | |||||||||||
| Amortization of ratification bonus |
— | 3.0 | 3.0 | 9.3 | ||||||||||||
| Other, net (a) |
0.5 | 0.3 | 3.2 | (0.2 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 45.3 | $ | 45.2 | $ | 119.3 | $ | 130.4 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (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. |
| Three Months | Nine Months | |||||||||||||||
| Regional Transportation segment |
2016 | 2015 | 2016 | 2015 | ||||||||||||
| Reconciliation of operating income to Adjusted EBITDA: |
||||||||||||||||
| Operating income |
$ | 21.9 | $ | 33.6 | $ | 64.9 | $ | 75.9 | ||||||||
| Depreciation and amortization |
17.4 | 17.4 | 51.6 | 53.2 | ||||||||||||
| (Gains) losses on property disposals, net |
0.3 | (0.2 | ) | 0.9 | — | |||||||||||
| Letter of credit expense |
0.6 | 0.5 | 2.0 | 1.5 | ||||||||||||
| Amortization of ratification bonus |
— | 1.6 | 1.6 | 5.1 | ||||||||||||
| Other, net (a) |
— | — | 0.3 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 40.2 | $ | 52.9 | $ | 121.3 | $ | 135.7 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (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. |
| Three Months | Nine Months | |||||||||||||||
| Corporate and other |
2016 | 2015 | 2016 | 2015 | ||||||||||||
| Reconciliation of operating loss to Adjusted EBITDA: |
||||||||||||||||
| Operating loss |
$ | (3.9 | ) | $ | (2.6 | ) | $ | (8.8 | ) | $ | (7.0 | ) | ||||
| Depreciation and amortization |
— | — | — | (0.1 | ) | |||||||||||
| Gains on property disposals, net |
(0.1 | ) | — | (0.1 | ) | (0.2 | ) | |||||||||
| Letter of credit expense |
— | 0.1 | 0.1 | 0.5 | ||||||||||||
| Restructuring professional fees |
— | 0.2 | — | 0.2 | ||||||||||||
| Permitted dispositions and other |
2.2 | — | 1.8 | 0.3 | ||||||||||||
| Equity-based compensation expense |
1.5 | 2.8 | 6.0 | 6.5 | ||||||||||||
| Other, net (a) |
0.3 | 0.5 | 0.2 | 1.0 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | — | $ | 1.0 | $ | (0.8 | ) | $ | 1.2 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (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. |
SUPPLEMENTAL FINANCIAL INFORMATION
YRC Worldwide Inc. and Subsidiaries
For the Trailing Twelve Months Ended September 30
(Amounts in millions)
(Unaudited)
| 2016 | 2015 | |||||||
| Reconciliation of net income to Adjusted EBITDA: |
||||||||
| Net income |
$ | 5.5 | $ | 30.4 | ||||
| Interest expense, net |
103.8 | 108.1 | ||||||
| Income tax expense (benefit) |
(12.1 | ) | 10.7 | |||||
| Depreciation and amortization |
159.6 | 164.3 | ||||||
|
|
|
|
|
|||||
| EBITDA |
256.8 | 313.5 | ||||||
| Adjustments for Term Loan Agreement: |
||||||||
| Gains on property disposals, net |
(10.8 | ) | (4.3 | ) | ||||
| Letter of credit expense |
8.2 | 8.9 | ||||||
| Restructuring professional fees |
— | 0.2 | ||||||
| Nonrecurring consulting fees |
— | 5.1 | ||||||
| Permitted dispositions and other |
1.9 | 0.3 | ||||||
| Equity-based compensation expense |
8.0 | 9.7 | ||||||
| Amortization of ratification bonus |
9.1 | 19.6 | ||||||
| Loss on extinguishment of debt |
— | 0.6 | ||||||
| Non-union pension settlement charge |
28.7 | — | ||||||
| Other, net (a) |
3.9 | (9.3 | ) | |||||
|
|
|
|
|
|||||
| Adjusted EBITDA |
$ | 305.8 | $ | 344.3 | ||||
|
|
|
|
|
|||||
| Operating revenue |
$ | 4,691.9 | $ | 4,907.4 | ||||
| Adjusted EBITDA margin |
6.5 | % | 7.0 | % | ||||
| (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. |
YRC Worldwide Inc.
Segment Statistics
Quarterly Comparison
| YRC Freight | ||||||||||||||||||||
| Y/Y | Sequential | |||||||||||||||||||
| 3Q16 | 3Q15 | 2Q16 | % (b) | % (b) | ||||||||||||||||
| Workdays |
64.0 | 64.0 | 64.0 | |||||||||||||||||
| Total picked up revenue (in millions) (a) |
$ | 763.6 | $ | 784.4 | $ | 749.6 | (2.6 | ) | 1.9 | |||||||||||
| Total tonnage (in thousands) |
1,620 | 1,641 | 1,596 | (1.3 | ) | 1.5 | ||||||||||||||
| Total tonnage per day (in thousands) |
25.31 | 25.64 | 24.94 | (1.3 | ) | 1.5 | ||||||||||||||
| Total shipments (in thousands) |
2,678 | 2,740 | 2,683 | (2.3 | ) | (0.2 | ) | |||||||||||||
| Total shipments per day (in thousands) |
41.84 | 42.82 | 41.93 | (2.3 | ) | (0.2 | ) | |||||||||||||
| Total picked up revenue/cwt. |
$ | 23.57 | $ | 23.90 | $ | 23.48 | (1.4 | ) | 0.4 | |||||||||||
| Total picked up revenue/cwt. (excl. FSC) |
$ | 21.31 | $ | 21.24 | $ | 21.30 | 0.3 | 0.0 | ||||||||||||
| Total picked up revenue/shipment |
$ | 285 | $ | 286 | $ | 279 | (0.4 | ) | 2.1 | |||||||||||
| Total picked up revenue/shipment (excl. FSC) |
$ | 258 | $ | 254 | $ | 253 | 1.3 | 1.7 | ||||||||||||
| Total weight/shipment (in pounds) |
1,210 | 1,198 | 1,190 | 1.0 | 1.7 | |||||||||||||||
|
(a) Reconciliation of operating revenue to total picked up revenue (in millions): |
|
|||||||||||||||||||
| Operating revenue |
$ | 777.9 | $ | 789.2 | $ | 755.0 | ||||||||||||||
| Change in revenue deferral and other |
(14.3 | ) | (4.8 | ) | (5.4 | ) | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Total picked up revenue |
$ | 763.6 | $ | 784.4 | $ | 749.6 | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Regional Transportation | ||||||||||||||||||||
| Y/Y | Sequential | |||||||||||||||||||
| 3Q16 | 3Q15 | 2Q16 | % (b) | % (b) | ||||||||||||||||
| Workdays |
63.0 | 64.0 | 64.0 | |||||||||||||||||
| Total picked up revenue (in millions) (a) |
$ | 443.4 | $ | 455.9 | $ | 453.2 | (2.8 | ) | (2.2 | ) | ||||||||||
| Total tonnage (in thousands) |
1,914 | 1,974 | 1,980 | (3.1 | ) | (3.4 | ) | |||||||||||||
| Total tonnage per day (in thousands) |
30.38 | 30.85 | 30.94 | (1.5 | ) | (1.8 | ) | |||||||||||||
| Total shipments (in thousands) |
2,622 | 2,672 | 2,696 | (1.9 | ) | (2.7 | ) | |||||||||||||
| Total shipments per day (in thousands) |
41.62 | 41.76 | 42.12 | (0.3 | ) | (1.2 | ) | |||||||||||||
| Total picked up revenue/cwt. |
$ | 11.58 | $ | 11.55 | $ | 11.44 | 0.3 | 1.2 | ||||||||||||
| Total picked up revenue/cwt. (excl. FSC) |
$ | 10.48 | $ | 10.32 | $ | 10.40 | 1.5 | 0.8 | ||||||||||||
| Total picked up revenue/shipment |
$ | 169 | $ | 171 | $ | 168 | (0.9 | ) | 0.6 | |||||||||||
| Total picked up revenue/shipment (excl. FSC) |
$ | 153 | $ | 153 | $ | 153 | 0.3 | 0.1 | ||||||||||||
| Total weight/shipment (in pounds) |
1,460 | 1,478 | 1,469 | (1.2 | ) | (0.6 | ) | |||||||||||||
|
(a) Reconciliation of operating revenue to total picked up revenue (in millions): |
| |||||||||||||||||||
| Operating revenue |
$ | 443.7 | $ | 455.7 | $ | 452.8 | ||||||||||||||
| Change in revenue deferral and other |
(0.3 | ) | 0.2 | 0.4 | ||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Total picked up revenue |
$ | 443.4 | $ | 455.9 | $ | 453.2 | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| (a) | Does not equal financial statement revenue due to revenue recognition adjustments between accounting periods and the impact of other revenue for YRC Freight. |
| (b) | Percent change based on unrounded figures and not the rounded figures presented. |
YRC Worldwide Inc.
Segment Statistics
YTD Comparison
| YRC Freight | ||||||||||||
| Y/Y | ||||||||||||
| 2016 | 2015 | % (b) | ||||||||||
| Workdays |
191.5 | 190.0 | ||||||||||
| Total picked up revenue (in millions) (a) |
$ | 2,208.9 | $ | 2,313.9 | (4.5 | ) | ||||||
| Total tonnage (in thousands) |
4,701 | 4,892 | (3.9 | ) | ||||||||
| Total tonnage per day (in thousands) |
24.55 | 25.75 | (4.7 | ) | ||||||||
| Total shipments (in thousands) |
7,875 | 8,135 | (3.2 | ) | ||||||||
| Total shipments per day (in thousands) |
41.12 | 42.81 | (3.9 | ) | ||||||||
| Total picked up revenue/cwt. |
$ | 23.49 | $ | 23.65 | (0.7 | ) | ||||||
| Total picked up revenue/cwt. (excl. FSC) |
$ | 21.34 | $ | 20.87 | 2.3 | |||||||
| Total picked up revenue/shipment |
$ | 280 | $ | 284 | (1.4 | ) | ||||||
| Total picked up revenue/shipment (excl. FSC) |
$ | 255 | $ | 251 | 1.5 | |||||||
| Total weight/shipment (in pounds) |
1,194 | 1,203 | (0.7 | ) | ||||||||
|
(a) Reconciliation of operating revenue to total picked up revenue (in millions): |
|
|||||||||||
| Operating revenue |
$ | 2,228.6 | $ | 2,322.0 | ||||||||
| Change in revenue deferral and other |
(19.7 | ) | (8.1 | ) | ||||||||
|
|
|
|
|
|||||||||
| Total picked up revenue |
$ | 2,208.9 | $ | 2,313.9 | ||||||||
|
|
|
|
|
|||||||||
| Regional Transportation | ||||||||||||
| Y/Y | ||||||||||||
| 2016 | 2015 | % (b) | ||||||||||
| Workdays |
191.5 | 191.5 | ||||||||||
| Total picked up revenue (in millions) (a) |
$ | 1,323.0 | $ | 1,367.6 | (3.3 | ) | ||||||
| Total tonnage (in thousands) |
5,794 | 5,948 | (2.6 | ) | ||||||||
| Total tonnage per day (in thousands) |
30.26 | 31.06 | (2.6 | ) | ||||||||
| Total shipments (in thousands) |
7,876 | 7,987 | (1.4 | ) | ||||||||
| Total shipments per day (in thousands) |
41.13 | 41.71 | (1.4 | ) | ||||||||
| Total picked up revenue/cwt. |
$ | 11.42 | $ | 11.50 | (0.7 | ) | ||||||
| Total picked up revenue/cwt. (excl. FSC) |
$ | 10.40 | $ | 10.20 | 1.9 | |||||||
| Total picked up revenue/shipment |
$ | 168 | $ | 171 | (1.9 | ) | ||||||
| Total picked up revenue/shipment (excl. FSC) |
$ | 153 | $ | 152 | 0.7 | |||||||
| Total weight/shipment (in pounds) |
1,471 | 1,489 | (1.2 | ) | ||||||||
|
(a) Reconciliation of operating revenue to total picked up revenue (in millions): |
|
|||||||||||
| Operating revenue |
$ | 1,321.3 | $ | 1,367.7 | ||||||||
| Change in revenue deferral and other |
1.7 | (0.1 | ) | |||||||||
|
|
|
|
|
|||||||||
| Total picked up revenue |
$ | 1,323.0 | $ | 1,367.6 | ||||||||
|
|
|
|
|
|||||||||
| (a) | Does not equal financial statement revenue due to revenue recognition adjustments between accounting periods and the impact of other revenue for YRC Freight. |
| (b) | Percent change based on unrounded figures and not the rounded figures presented. |
