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YRC Worldwide Inc. Message Board

  • tx.iconoclast Dec 21, 2010 7:17 PM Flag

    EBITDA Covenants


    Q2 Adj. EBITDA 39.9 and Q3 is 44.3 for 84.2mm for 6 months ending 9/30.

    11/5 Q3 Earnings PR

    8/3 Q2 Earnings PR

    From agreement announced today and in today's 8K

    First EBITDA covenant in table is for $140mm for 4 quarters ending 3/31/11.

    So they need $55.8mm more of EBITDA the next two quarters.

    At first glance, doesn't sound too daunting. But then remember Qs 2 & 3 are the best historical ones (seasonality) and Qs 4 & 1 are the of course the worst.

    What will EBITDA be. Well we don't know. What we do know is 11/5 in announcing Q3 the company said they expect Q3 EBITDA to be positive NOT higher as they said when announcing Q2. So we should expect Q4 to be less than Q3. How much less we don't know. Though it could drop by $40mm and still be positive.

    What else do we know? Well YRCW has the consensus estimates from analysts (real analysts... not websites that make paid ads look like research)...

    that is here:

    That shows Q4 as 22.6 and Q1 as 4.3. That is 26.9mm of additional EBITDA.

    26.9 estimated and 84.2 actual is 111.1mm

    Long way from 140mm needed for the covenant.

    And yes those are estimates (but they are not from one source it is a consensus from 6 analysts for Q4 and 4 analysts for Q1.

    So this agreement doesn't really give YRCW much rope.

    It is just a 60 day extension.

    The reasons behind are not known but with this many players there are loads of possibilities.

    However, it is noteworthy that the pension plans never approved the union agreement even though it is about 3 months after it was announced.

    They must also approve extending non payment of pension payments past 12/31/10 in order for this lender extension to stay in place.

    The union must ok too but hard to to believe that would be a problem. But you have to wonder if there is a chance the pension plan trustees won't.

    This topic is deleted.
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    • You have any idea how many YRC estimates have been dead wrong for the last 4 years?
      How many CC's were total BS.
      Zollars has said just about everything except I won't cuminyour mouth to the shareholders and analyst!

    • My post was poorly written what I meant was the number of outstanding shares could go up 175%, I have no allusions about the stock price doing that.

      Not sure I agree the shares outstanding can go up that easily, is that a board vote or a shareholder vote?

      I continue to beleive the bank has some projections that show they can meet the covenants (if they don't who is going to want equity in this thing anyway - so why would the bank let the assets depreciate another 2 months)

    • 1st got to admit, MrPhil is pretty funny

      Tx one comment, normally you set the covenant to something you can meet. I can't say I've ever had a company on the ropes like this but I assume there are at least projections being shared with the bank that give about 10% cushion on the covenant, otherwise the bank won't approve a loan or extension when you know the company will bust the covenant in 60 days. Not saying they'll hit the numbers and you are right on about 1st & 2nd vs 3rd and especially 4th qtr profitability but i'm sure there are a set of numbers out there that show how they can hit this number

      To me its not about the numbers, I don't think this is going BK, I do think it is entirely possible the shares outstanding goes up 175%

      Although, and I've been too lazy to look this up because i don't know where to look exactly - how many shares are they authorized to issue - do you know

    • I was reading this bucket of sh-t and started thinking about the Super Bowl. Looks like New England and somebody!! Any thoughts ?

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