YRC Worldwide, Inc. (YRCW) Posts Q1 Loss of $3.95/Share
8:30 AM ET, 05/01/2014 - Street Insider
YRC Worldwide, Inc. (NASDAQ: YRCW) reported Q1 EPS of ($3.95), which may not compare with the analyst estimate of ($1.12). Revenue for the quarter came in at $1.21 billion versus the consensus estimate of $1.17 billion.
The company reported, on a non-GAAP basis, adjusted EBITDA of $23.4 million for the first quarter of 2014, as compared to adjusted EBITDA of $60.7 million for the first quarter of 2013
"We faced numerous challenges during the first quarter as we battled both the distractions from the ratification of the Memorandum of Understanding (MOU) along with Mother Nature," said YRC Worldwide CEO James Welch. "This was one of the worst winter seasons in my more than 30 years in trucking. We estimate that it negatively impacted our operating income by approximately $20 million. The main culprits were lower volumes, decreased productivities and higher use of purchased transportation," stated Welch.
Additionally, the year-over-year decline in adjusted EBITDA is attributable to a $13.2 million increase in expense related to workers' compensation, bodily injury and cargo claims. The increase in both our bodily injury and cargo claims expense was driven by an increase in the number of claims due to adverse weather conditions as well as favorable development experienced in the first quarter of 2013.
"The good news is that during the first quarter of 2014, we laid the foundation for our future operational improvements based on changes provided by the recently ratified MOU, more specifically the establishment of a uniform national attendance policy, payment of vacation based on the number of hours worked and, to a lesser extent, our new over-the-road purchased transportation policy," continued Welch. "I am pleased with the progress we've made during the first quarter in implementing these new policies; however, because the MOU was ratified halfway through the quarter, there were little, if any, positive impacts on year-over-year results. I believe it will take the better part of 12 months before we experience the full effect of the operationally-related policy changes," said Welch.
"Since his appointment as president in late February, Darren Hawkins has restructured the organization at YRC Freight to align sales with operations and three terminals are set to open to meet demand for service in certain areas of the country. For the remainder of 2014, these changes, in addition to our regimented service cycle, are anticipated to provide additional efficiencies that will intensify our operational improvements," stated Welch.