Yrc Worldwide (NASDAQ:YRCW)
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5 Years : From Jan 2012 to Jan 2017
YRC Worldwide Inc. (YRCW) has largely finished pruning its business lines and now has a "laser-like" focus on improving its core North American operations, James Welch, chief executive of the struggling trucking company, said Thursday.
"We're pretty much set now, and it's pretty much executing and making the business better," Welch said in a post-earnings interview. "We like what we have right now."
Welch, a trucking-industry veteran who left YRC in 2007 but who returned as CEO last July, has been concentrating the company on its big less-than-truckload operations. In December, he sold off YRC's Glen Moore truckload business and, in March, he sold its stake in Shanghai Jiayu Logistics, a Chinese logistics firm.
Less-than-truckload carriers consolidate loads from multiple customers onto single trucks.
YRC still provides some freight-forwarding services in China through its JHJ International Transportation joint venture. Welch declined to discuss his plans for the unit--saying that commenting on it would be "too forward-looking"--but he made clear that YRC's priority is on the North American less-than-truckload market.
The company, based on Overland Park, Kan., showed improvement in the market during the first quarter, with tonnage per day in its main less-than-truckload freight division up 3.5%, outpacing a 1.5% gain by rival Con-way Inc.'s (CNW) freight division and a 2.3% decline in shipments per day at United Parcel Service Inc.'s (UPS) freight division.
Still, some of YRC's volume gains appeared to come at the expense of pricing. Con-way and UPS improved their yields--or revenue per hundredweight, a broad measure of pricing--by 6.1% and 4.5%, respectively, during the first quarter, compared with a 3.3% rise at YRC's freight division.
Welch acknowledged Thursday that "the yield on our business is not as good as what we want," and he said YRC is working to improve service levels so that it is better able to raise prices by demonstrating value to customers. He dismissed the notion that YRC intentionally used price to gain volume.
"We are not out in the marketplace overreaching," he said. "We're trying to win business, but we're trying to win it on value, not on price."
Welch described the overall economy as "steady," echoing comments from Con-way executives earlier this week.
YRC shares were off 2.6%, or 19 cents, at $7.19 in recent trading.
The company reported a narrower first-quarter loss Thursday as its revenue improved. It lost $85.5 million, or $12.40 a share, in the quarter, compared with a year-earlier net loss of $102.2 million, or $643.56 a share. The company's 1-for-300 reverse stock split went into effect Dec. 1. Revenue rose 6.4% to $1.19 billion.
Analysts polled by Thomson Reuters had projected a per-share loss of $10.42 and revenue of $1.19 billion.
Debt-laden YRC has been fending off a bankruptcy-protection filing since late 2009. On Monday, YRC won an agreement from creditors to relax terms on some loans, giving it more breathing space to concentrate on improving its operations.
Despite significant downsizing over the past few years, YRC remains the largest operator in the domestic less-than-truckload sector, with 15.5% of the market based on 2011 revenue, according to SJ Consulting Group, just ahead of FedEx Corp.'s (FDX) freight division.
YRC employed about 32,000 people at the end 2011--about 25,000 of them members of the Teamsters union--little more than half its workforce at the end of 2007.
-By Bob Sechler, Dow Jones Newswires; 512-258-1690; [email protected]
--Nathalie Tadena contributed to this article.