The head of YRC Worldwide Inc. (YRCW) said Wednesday that shippers scared off by the U.S. trucking group's recent brush with insolvency have been returning "pretty aggressively" in the last few days.
Chief Executive Bill Zollars also said in an interview that "bankruptcy is not on our radar screen now" that the company has completed a critical financial restructuring.
Bondholders last week finally agreed to swap $470 million in notes -- or about a third of the company's debt -- for equity.
The bond exchange was completed on Dec. 31, after repeated delays and warnings from the largest independent U.S. trucking operator that it might seek bankruptcy protection if enough bondholders didn't agree.
Zollars acknowledged that the "tense couple of weeks" leading up to the debt swap cost it business from some customers worried shipments might be stranded by a bankruptcy.
But he said most of those customers "feel a lot better about doing business with us" now, and are coming back.
Zollars declined to quantify the amount of business lost, saying only that it was within the company's expectations. Volume in YRC's national segment dropped 40% in the third quarter ended Sept. 30, about half of which Zollars attributed to customer fears regarding its solvency.
"We think the worst is over from a customer flight standpoint," he said Wednesday.
Still, he stopped short of forecasting a near-term volume rebound, saying the economy remains soft and the shipping industry is in the midst of a seasonally slow period.
"We haven't seen any really positive signs" that the economy has turned around, Zollars said, although he added that overall conditions are stable.
He said the company now has a "liquidity cushion" -- including $160 million that lenders hinged to a successful debt exchange -- to get it into March, when industry volume generally picks up seasonally.
Under the lender agreement, however, YRC also has until mid-March to retire $30 million of $45 million in bonds that weren't tendered during the exchange. Zollars said he's confident the company will be able to live up to the requirement.
Zollars said he hopes to remain chief executive when a new YRC board is selected, probably in February. The majority of YRC's board members are expected to be replaced, although Zollars said he plans to remain as chairman.
YRC shares were up 10.8% at 75 cents in recent trading. The stock was above $3 before details of the highly dilutive debt-for-equity exchange were released in November.
-By Bob Sechler; Dow Jones Newswires; 512-394-0285; email@example.com