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10990 Roe Avenue
Overland Park, KS 66211
Phone 913 696 6108 Fax 913 696 6116
YRC Worldwide Reports Second Quarter 2019 Results
Company Moves Full Speed Ahead with its Profit Initiatives Following Labor Ratification
OVERLAND PARK, Kan., August 9, 2019 YRC Worldwide Inc. (NASDAQ: YRCW) reported consolidated operating revenue for second quarter 2019 of $1.273 billion and consolidated operating income of $14.3 million, which included a $6.2 million net gain on property disposals. Operating income for second quarter 2019 includes aone-time charge for vacation benefits of $12.4 million related to prior periods as a result of the new labor agreement. As a comparison, for the second quarter 2018, the Companys results included operating revenue of $1.327 billion and consolidated operating income of $50.9 million, which included a $2.2 million net loss on property disposals.
During May, we achieved ratification of our labor agreement which provides critical operational opportunities for our business. We believe these opportunities should provide the basis for improved profitability over time for the Company. However, during the second quarter, the labor contract impacted us in several ways, said Darren Hawkins, Chief Executive Officer of YRC Worldwide Inc. First, we saw declining revenues due to temporary customer concern surrounding the labor negotiation. Second, while the labor contract was ratified midway through May, the economic package was retroactive to April 1, 2019. In the short-term, this created cost headwinds that we were not fully able to offset during the quarter with revenue growth or cost savings. We believe less-than-truckload (LTL) industry pricing remains rational. As we move into the back half of 2019, we are focused on profit initiatives that support our comprehensive strategic plan.
The Company has developed a comprehensive business strategy to achieve long-term profitability and stability. Our strategic roadmap is built upon the proven alliance of our LTL regional and national networks, as well as our recently launched multi-mode freight brokerage solutions, HNRY Logistics, to provide a broad portfolio of freight and business services to our customers.
The key components of our multi-year strategic roadmap are:
Labor contract ratification, along with implementation of operational efficiencies to achieve service excellence
Capital structure improvement
Customer growth/engagement initiatives
Capital investment in equipment and technology
During the quarter and up through this earnings announcement, the Company has commenced implementation of key initiatives that support our strategic plan:
Named a new Chief Customer Officer to lead customer engagement initiatives
Completed the reorganization of our enterprise-wide salesforce and initiated the consolidation of our New Penn corporate office to scale processes, when combined, should lead to expected future annualized savings of approximately $25.0 million
Onboarded nearly 170 new non-CDL box trucks which allowed for continued reductions in local cartage and short-term rental expense
Improved our mix of hourly wages with the use of part-time workers
Initiated first phase of network optimization plans to consolidate service centers, with approximately 25 service centers expected to be completed by end of 2019
The following information was filed by Yrc Worldwide Inc. (YRCW) on Friday, August 9, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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