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# YRC Worldwide Inc. Message Board

• rvegagold rvegagold Nov 17, 2009 9:52 AM Flag

## Share Price After Exchange = \$1.84 to \$2.65

If the exchange went through...

Using T Wadewitz numbers math and Wall Street Valuation Multiple I calculate the price per share after dilution.

I will use the more realistic Key metrics from Yahoo and the multiple under Conway's Key Metrics.

Current Conway EBITDA = 343,820,000
Current Enterprise Value = 2,010,000,000

Multiple = EBITDA / Ent Value
Multiple = 5.85

Applying the 5.85 multiple (in line with real and current peer valuation) this implies an enterprise value of YRCW would be \$2.925 Billion (\$ 500 mm x 5.85 = \$2.925 billion)

Take out the remaining Note debt around \$536 Million, the remaining equity value would be around \$2.389 billion
\$2,389,000,000/ 1,300,000,000 Post Exchange Shares (Next Year)

The implied value of YRCW future shares using more of a wall street valuation = \$1.84 per share.

--- o ---

Using BEST CASE SCENARIO of the 52 Week High valuation of Conway \$48 Dollars, we get a higher Multiple and a higher price per share.

Conway's Enterprise using 52 Week High of \$48.32 dollars

49,020,000 outstanding shares x \$48.32 = \$2,368,646,400 Highest Ent. Value this year.

Multiple = EBITDA / Ent. Value
Multiple = 2368646400 / 343820000 = 6.89 (when Conway had it's 52 week high valuation)

YRCW share price using highest multiple from a competitor's 52 week high valuation.
\$ 500 mm x 6.89 multiple = 3,445,000,000 Enterprise Value

3,445,000,000 Ent Value / 1,300,000,000 Post Exchange Shares.

Post Exchange Share Price = \$2.65 (Using 52 Week High Valuation from peers)

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• This information is a part of regular information provided by Stifel Nicolaus Transportation & Logistics Research. Not trying to create issues on someones math, but with the dilution by 1.1 BILLION Shares of YRCW stock \$1.18 close 12/01/09. There is much more detail suppoorting this document dated 11/04/2009 but I was not sure how many charaters I could place in this. Hopeful this will assist. ALL - "I AM HOPEFUL, BUT NOT OPTOMISTIC YRCW WILL MAKE IT". Too many IF's in the market place. The Transportation Industry - all of it is driven by economic aspects and we all know where the economy is and it ain't good and unemployment will top 13% plus before this is over. So, unemployment is extreme and going south, underemployment is rampant and putting all the figures together you have almost a 20% - unemployment/underemployment/just gave up (1 MM people) and that just sucks. I was with YRCW for 26 years and my group was dissolved 4/30/09. Just a busienss decision. No hard feelings moving on. But, this analyst group is usually dead on and the dilution will put a share of YStifel Nicolaus Transportation & Logistics Research YRCW stock somewhere around \$.23 for a share of preferred stock. So what does that say for someone holding a share of "just stock"?? SELL while you can...If you day trade be wary. Stay safe & healthy!

3Q09 results: Tonnage per day declined 43% y/y at YRC National and
25% y/y at YRC Regional, as the LTL market remains sluggish and the
company continues to lose market share over service issues, price
competition and customer diversification efforts. Holland
(cash-for-clunkers beneficiary) and New Penn were profitable, but
Reddaway is still losing money mainly because they have not taken the
wage/benefit concessions that most of the other union members have.
YRC Logistics outperformed expectations, posting its best margins ever
on cost cuts, pricing and some one-time benefits.
• Liquidity as of 9/30/09: \$171mm but likely worse at end of October -
updated monthly cash flow analysis in Exhibit 1 on page 2. Assuming
the note exchange goes through and banks remain forgiving, we believe
the company may now not run out of cash in 2010 (we have previously
said cash would run out by the end of 1Q10). We did not think the banks
would waive interest and fees through 2010, but they will, if the debt
exchange with bondholders is successful.
• Note exchange: The debt-for-equity swap is much more dilutive than we
thought it would be, as the bondholders are essentially being given
ownership of the company (95% of the total shares after exchange).
Bondholders are essentially getting over 1.1bn share of YRCW for
~\$550mm of debt. Full deal analysis on pages 3-4 of this note.
• This deal should be approved by bondholders, in our view. We are less
sure existing shareholders will approve, but the company has a way
around that (through a planned merger of YRC into a wholly owned
subsidiary to effect the same result) if need be.
• We are maintaining our Sell rating on YRCW. The stock price should
continue to fall through year-end toward a price below \$0.50 (\$0.23 is
conversion price of preferred stock), in our view. We recommend
investors looking to stay long the equity should sell the common stock
and buy the bonds. Given the projected post-conversion diluted share
count of 1.6bn, the company would have to have estimated annual net
income of \$2bn to justify its current share price.

• 1 Reply to isurvived5
• This is the math used by Stifel Nicolaus - this was in an easy to see and read format, but did not carry forward and changed to Text. See their site if more info is desired: http://www.stifel.com/framesetURL.asp?URL=/homepageFrameset.asp

Exhibit 2 - New shares will be highly dilutive
Debt/equity exchange offer
YRCW sharecount
Shares currently authorized for issuance 120,000,000
Current shares outstanding 60,164,231
New common stock issued in exchange 42,000,000
Convertible preferred stock issued in exchange 5,000,000
Total shares to be outstanding post-exchange before conversion 107,164,231
Conversion rate 220.22
Shares to be issued due to conversion (# preferred x conversion rate) 1,101,100,000
Total shares outstanding post-conversion 1,203,264,231
Total shares outstanding post-conversion 1,203,264,231
Union options 320,870,462
Management, director and other employee options 80,217,615
Implied total diluted share count 1,604,352,308
Share price (11/3/09 close) \$1.23
Net income estimate needed to justify current share price \$1,973,353,339
Even when YRC had \$10bn in revenue, it never had more than \$300mm of net income
Implied share price off new base if YRC returns to peak earnings of 2006 \$0.19
Strike price on union options
Estimated value of notes and obligations exchanged \$550,000,000
Stock to be held by bondholders (assuming full conversion) 1,143,100,000
Strike price of options \$0.48
But since the Teamsters are to be given options representing 20% of post-conversion
total shares and management, directors and other employees are to be given 5% of postconversion
total, the above number represents only 75% of final total shares outstanding
in the debt exchange - new fully diluted sharecount below
Source: Company filings and Stifel Nicolaus estimates

• delisting soon.

• The best way to profit from this is to buy the bonds now

USFC.GB 916906AB6 Corporate USFREIGHTWAYS CORP 8.50 04/15/2010 Ca C C 58.125 -0.250 199.164 11/23/2009 13:29:45

This gives you a share purchase price of about .25

If YRCW jyst stays above .5 you double your money.

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