New Hampshire Finance

Sep 7 2018

July 11, 2017 1:34 PM

YRC Worldwide told its lenders that it expects sharply higher operating income and increased revenues this year as the two sides negotiated terms of some existing debt.

Executives want lenders to extend the due date on $637 million in debt to July 2022. It currently is due in February 2019.

The improved financial outlook comes after the company eliminated 180 management and non-union jobs earlier this year to operate more efficiently. It also shed some other expenses and increased collaboration among its four trucking businesses.

YRC disclosed the financial projections it had provided lenders by including them in a filing with the Securities and Exchange Commission.

The filing said the company expects operating income to reach at least $150 million and possibly $170 million for the year. A year ago, the Overland Park-based trucking company had reported operating income of $124.3 million. The estimated range suggests an increase of between 20.7 percent and 36.8 percent.

YRC’s estimated range is higher than analyst David Ross, with Stifel Nicolaus Co. Inc. expected, he said in a note to clients Tuesday. Although Ross expected an increase in operating income this year, he had pegged it at $142.5 million, which is below the company’s range.

Revenues for this year should total between $4.8 billion and $5 billion, YRC’s filing said. Last year, revenues were $4.698 billion. The estimated range shows an increase of between 2.17 percent and 6.43 percent.

Ross said extending the due date on the debt would help YRC more than delaying repayment. It “decouples” work to extend or refinance the debt from labor negotiations YRC faces in early 2019 when its current contract with the International Brotherhood of Teamsters expires.

YRC also provided estimated ranges for its performance during the second quarter, which ended June 30. It showed a likely decline in operating income.

It said operating income would be between $46 million and $56 million, compared with operating income of $57.2 million a year ago. Revenues in the quarter would be between $1.2 billion and $1.3 billion, compared with $1.208 billion a year ago, YRC’s filing said.

YRC’s first quarter this year had produced an operating loss of $3 million despite a 4.5 percent increase in revenues.

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