YRC sees 'momentum,' but road ahead is still rough

By SAMANTHA BOMKAMP

posted: 4 DAYS 15 HOURS AGO

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NEW YORK -YRC Worldwide, one of the country's largest trucking companies, on Friday posted an operating loss for the fourth-quarter because of the weak economy and internal financial struggles.

But the company said it sees "good momentum" in its business so far this year and is getting support from some big customers who have stuck with it. They include Toys R Us, Dole, Neiman Marcus and Anheuser-Busch. CEO Bill Zollars said other customers were scared off by concerns about the company's finances.

Some analysts thought the trucker was within days of filing for bankruptcy protection late last year.

YRC is not trying to lure customers back by cutting prices, although competitors like FedEx and Con-way have been undercutting its rates. Instead its communicating more with customers of all sizes to keep their business. It's sent salespeople and even top executives to drive home things like reliability and customer service.

Freight shipments are a large expense for retailers and manufacturers, so the cost of everyday goods can be impacted by trucking rates. Trucking companies are indicators of the health of the broader economy because they carry so many consumer products, from appliances to TVs to toys.

YRC managed a successful debt-for-equity swap at the end of the year, which virtually wiped out shareholders to satisfy creditors. The company had just $98 million in cash as of Dec. 31 and more than $1.07 billion in liabilities. YRC has access to $160 million from a credit line, and expects to get more cash when the debt swap closes this quarter.

The company was pummeled last year by the combination of the sluggish economy and slow integration of two of its businesses. It cut thousands of jobs, reduced pay for remaining employees and sold real estate to raise cash.

YRC, which operates trucks under the Yellow, Roadway, Holland and New Penn names, reported an operating loss of $95.4 million in the fourth quarter, compared with a year-ago operating loss of $335.3 million.

YRC, based in Overland Park, Kan., did not provide net income or per-share figures, saying it was still working on its income-tax provision.

Revenue plunged to $1.15 billion from $1.93 billion a year earlier. Analysts polled by Thomson Reuters predicted sales of $1.22 billion.

Average shipments per day fell 40 percent in the company's national freight segment.

For the full year, YRC lost $899 million before taxes. It lost $1.15 billion in 2008, mostly due to a massive writedown on the value of its trucks and other assets.

2010-02-05 13:29:54