Exhibit 99.1
10990 Roe Avenue Overland Park, KS 66211 Phone 913 696 6100 Fax 913 696 6116 News Release |  |
January 28, 2008
YRC Worldwide Reports Fourth Quarter and Full-Year 2007 Earnings
OVERLAND PARK, KAN. — YRC Worldwide Inc. (NASDAQ: YRCW) today announced diluted earnings per share (“EPS”) for the full year 2007 of $1.88, excluding previously announced impairment charges of $12.77 per share, reorganization and settlement costs of $.24 per share, technology charges of $.11 per share and gains on property disposals of $.07 per share. When including these items, full-year 2007 results were a loss per share of $11.17 compared to EPS of $4.74 in 2006.
For the fourth quarter, EPS was $.01 when excluding the impairment charges of $12.88 per share, reorganization costs of $.09 per share, technology charges of $.11 per share and gains on property disposals of $.08 per share. When including these items, the fourth quarter was a loss of $12.99 per share compared to EPS of $.80 per share in the fourth quarter of 2006.
The per share amounts without the excluded items above are non-GAAP measures, which should not be construed as a better measure than the GAAP net loss or EPS also presented above. The company excludes the items listed when evaluating core performance as they are not related to ongoing operations or are a one-time occurrence.
“The economic environment was challenging throughout 2007 and it was increasingly so in the fourth quarter,” stated Bill Zollars, Chairman, President and CEO of YRC Worldwide. “Looking forward, we expect the first quarter to also be difficult given it is seasonally the softest and we don’t anticipate the economy improving in the near term. As the largest less-than-truckload provider, we are well positioned to benefit from economic recovery, when it occurs.”
Key segment information for the fourth quarter 2007 included:
| • | YRC National Transportation LTL revenue per hundredweight up 5.7% from fourth quarter 2006 and LTL tonnage per day down 8.0% |
| • | YRC Regional Transportation LTL revenue per hundredweight up 3.4% compared to last year and LTL tonnage per day down 2.9% |
| • | YRC Logistics revenue consistent with last year despite the weak economy |
Additional statistical information is available on the company’s website at yrcw.com under Investors, Earnings Releases & Operating Statistics.
As mentioned above, the company reported significant charges in the fourth quarter that it does not consider when evaluating core performance. The impairment charges of $782 million were a result of the company’s annual impairment review of goodwill and certain other intangible assets arising from its acquisitions. The reorganization costs of $9 million primarily related to executive severance charges that were recorded in the Corporate segment. The technology charges of $8 million related to the alignment of projects with the company’s technology strategy going forward that resulted in abandonment of certain projects that then could no longer be capitalized. These charges were primarily reported in the YRC National Transportation segment as amortization expense.
Review of Financial Results
YRC Worldwide Inc. (NASDAQ: YRCW) will host an analyst meeting for shareholders and the investment community today, January 28, 2008, at 2:00pm ET at the Waldorf-Astoria, 301 Park Avenue, New York, NY. For those not attending, the meeting will be available in listen-only mode by dialing 1.888.609.3912 or via streetevents.com and the YRC Worldwide Internet site yrcw.com. Following the management presentation, there will be a broadcast Q&A session in which questions will be taken from those in attendance.
An audio playback will be available after the call via StreetEvents and the YRC Worldwide web sites.
* * * * *
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “expect,” “believe,” “expectations,” and similar expressions are intended to identify forward-looking statements.
The company’s outlook for the economy and its impact on the company’s business results are only its expectations regarding these matters. Actual economic activity and business results could differ materially from the company’s outlook as it is dependent on many factors, including (among others) inflation, inclement weather, price and availability of fuel, sudden changes in the cost of fuel or the index upon which the company bases its fuel surcharge, competitor pricing activity, expense volatility, including (without limitation) expense volatility due to changes in rail service or pricing for rail service, ability to capture cost reductions, including (without limitation) those cost reduction opportunities arising from acquisitions, changes in equity and debt markets, a downturn in general or regional economic activity, effects of a terrorist attack, labor relations, including (without limitation), the impact of work rules, work stoppages, strikes or other disruptions, any obligations to multi-employer health, welfare and pension plans, wage requirements and employee satisfaction, and the risk factors that are from time to time included in the company’s reports filed with the Securities and Exchange Commission (the “SEC”), including the company’s Annual Report on Form 10-K for the year ended December 31, 2006.
YRC Worldwide Inc., a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of successful brands including Yellow Transportation, Roadway, Reimer Express, YRC Logistics, New Penn, USF Holland, USF Reddaway, and USF Glen Moore. The enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. Headquartered in Overland Park, Kansas, YRC Worldwide employs approximately 60,000 people.
| Investor Contact: | Sheila Taylor | Media Contact: | Suzanne Dawson | |||
| YRC Worldwide Inc. | Linden Alschuler & Kaplan | |||||
| 913.696.6108 | 212.329.1420 | |||||
| sheila.taylor@yrcw.com | Tsdawson@lakpr.comT |
STATEMENTS OF CONSOLIDATED OPERATIONS
YRC Worldwide Inc. and Subsidiaries
For the Three and Twelve Months Ended December 31
(Amounts in thousands except per share data)
(Unaudited)
| Three Months | Twelve Months | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
OPERATING REVENUE | $ | 2,348,738 | $ | 2,407,663 | $ | 9,621,316 | $ | 9,918,690 | ||||||||
OPERATING EXPENSES: | ||||||||||||||||
Salaries, wages and employees' benefits | 1,407,304 | 1,395,285 | 5,741,078 | 5,735,720 | ||||||||||||
Operating expenses and supplies | 489,762 | 440,943 | 1,864,957 | 1,819,030 | ||||||||||||
Purchased transportation | 277,629 | 278,752 | 1,089,041 | 1,090,504 | ||||||||||||
Depreciation and amortization | 74,035 | 61,904 | 255,603 | 274,184 | ||||||||||||
Other operating expenses | 98,382 | 118,122 | 437,323 | 435,876 | ||||||||||||
Gains on property disposals, net | (7,381 | ) | (8,443 | ) | (5,820 | ) | (8,360 | ) | ||||||||
Reorganization and settlements | 8,731 | 13,366 | 22,385 | 26,302 | ||||||||||||
Impairment charges | 781,875 | — | 781,875 | — | ||||||||||||
Total operating expenses | 3,130,337 | 2,299,929 | 10,186,442 | 9,373,256 | ||||||||||||
OPERATING INCOME (LOSS) | (781,599 | ) | 107,734 | (565,126 | ) | 545,434 | ||||||||||
NONOPERATING (INCOME) EXPENSES: | ||||||||||||||||
Interest expense | 24,241 | 21,076 | 88,760 | 87,760 | ||||||||||||
Other | (3,426 | ) | 3,754 | (2,169 | ) | 1,718 | ||||||||||
Nonoperating expenses, net | 20,815 | 24,830 | 86,591 | 89,478 | ||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | (802,414 | ) | 82,904 | (651,717 | ) | 455,956 | ||||||||||
INCOME TAX PROVISION (BENEFIT) | (66,643 | ) | 36,445 | (13,336 | ) | 179,324 | ||||||||||
NET INCOME (LOSS) | $ | (735,771 | ) | $ | 46,459 | $ | (638,381 | ) | $ | 276,632 | ||||||
AVERAGE SHARES OUTSTANDING-BASIC | 56,658 | 57,144 | 57,154 | 57,361 | ||||||||||||
AVERAGE SHARES OUTSTANDING-DILUTED | 56,658 | 57,938 | 57,154 | 58,339 | ||||||||||||
BASIC EARNINGS (LOSS) PER SHARE | $ | (12.99 | ) | $ | 0.81 | $ | (11.17 | ) | $ | 4.82 | ||||||
DILUTED EARNINGS (LOSS) PER SHARE | $ | (12.99 | ) | $ | 0.80 | $ | (11.17 | ) | $ | 4.74 | ||||||
SEGMENT FINANCIAL INFORMATION
YRC Worldwide Inc. and Subsidiaries
For the Three and Twelve Months Ended December 31
(Amounts in thousands)
(Unaudited)
| Three Months | Twelve Months | |||||||||||||||||||||
| 2007 | 2006a | % | 2007 | 2006 a | % | |||||||||||||||||
Operating revenue: | ||||||||||||||||||||||
YRC National Transportation | $ | 1,636,887 | $ | 1,678,131 | (2.5 | ) | $ | 6,657,770 | $ | 6,878,505 | (3.2 | ) | ||||||||||
YRC Regional Transportation | 564,684 | 570,526 | (1.0 | ) | 2,369,603 | 2,441,364 | (2.9 | ) | ||||||||||||||
YRC Logistics | 162,349 | 162,558 | (0.1 | ) | 623,208 | 609,742 | 2.2 | |||||||||||||||
Eliminations | (15,182 | ) | (3,552 | ) | (29,265 | ) | (10,921 | ) | ||||||||||||||
Consolidated | 2,348,738 | 2,407,663 | (2.4 | ) | 9,621,316 | 9,918,690 | (3.0 | ) | ||||||||||||||
Operating income (loss): | ||||||||||||||||||||||
YRC National Transportation | (56,920 | ) | 101,721 | n/m | 159,331 | 423,285 | (62.4 | ) | ||||||||||||||
YRC Regional Transportation | (715,201 | ) | 19,148 | n/m | (706,669 | ) | 142,228 | n/m | ||||||||||||||
YRC Logistics | 489 | 7,618 | (93.6 | ) | 5,142 | 13,682 | (62.4 | ) | ||||||||||||||
Corporate and other | (9,967 | ) | (20,753 | ) | (22,930 | ) | (33,761 | ) | ||||||||||||||
Consolidated | $ | (781,599 | ) | $ | 107,734 | n/m | $ | (565,126 | ) | $ | 545,434 | n/m | ||||||||||
Operating ratio: | ||||||||||||||||||||||
YRC National Transportation | 103.5 | % | 93.9 | % | 97.6 | % | 93.8 | % | ||||||||||||||
YRC Regional Transportation | n/m | 96.6 | % | n/m | 94.2 | % | ||||||||||||||||
YRC Logistics | 99.7 | % | 95.3 | % | 99.2 | % | 97.8 | % | ||||||||||||||
Consolidated | 133.3 | % | 95.5 | % | 105.9 | % | 94.5 | % | ||||||||||||||
(Gains) losses on property disposals, net: | ||||||||||||||||||||||
YRC National Transportation | $ | (3,381 | ) | $ | (5,685 | ) | $ | (8,341 | ) | $ | (6,352 | ) | ||||||||||
YRC Regional Transportation | (3,747 | ) | (2,859 | ) | (1,453 | ) | (3,015 | ) | ||||||||||||||
YRC Logistics | 824 | 101 | 714 | 89 | ||||||||||||||||||
Corporate and other | (1,077 | ) | — | 3,260 | 918 | |||||||||||||||||
Consolidated | (7,381 | ) | (8,443 | ) | (5,820 | ) | (8,360 | ) | ||||||||||||||
(Gains) losses on reorganization and settlements: | ||||||||||||||||||||||
YRC National Transportation | 610 | — | 6,693 | 4,309 | ||||||||||||||||||
YRC Regional Transportation | 777 | — | 7,857 | — | ||||||||||||||||||
YRC Logistics | 624 | 77 | 3,335 | 7,057 | ||||||||||||||||||
Corporate and other | 6,720 | 13,289 | 4,500 | 14,936 | ||||||||||||||||||
Consolidated | 8,731 | 13,366 | 22,385 | 26,302 | ||||||||||||||||||
Impairment charges: | ||||||||||||||||||||||
YRC National Transportation | 76,554 | — | 76,554 | — | ||||||||||||||||||
YRC Regional Transportation | 705,321 | — | 705,321 | — | ||||||||||||||||||
YRC Logistics | — | — | — | — | ||||||||||||||||||
Corporate and other | — | — | — | — | ||||||||||||||||||
Consolidated | $ | 781,875 | $ | — | $ | 781,875 | $ | — | ||||||||||||||
a | The 2006 amounts for YRC National Transportation, YRC Regional Transportation and Corporate and other have been adjusted to conform with the current year presentations, such that YRC National Transportation includes the results of Yellow Transportation and Roadway, including eliminations; YRC Regional Transportation excludes USF Red Star and USF Dugan as those business units were reallocated to the Corporate and other segment in the second quarter of 2006 and Corporate and other includes USF Red Star and USF Dugan and excludes any eliminations related to YRC National Transportation. |
Selected Financial Data
YRC Worldwide Inc. and Subsidiaries
(Amounts in thousands unless otherwise noted)
(Unaudited)
| For the Twelve Months Ended December 31, | ||||||||
| 2007 | 2006 | |||||||
Net cash from operating activities | $ | 392,598 | $ | 532,304 | ||||
Net cash used in investing activities | (341,087 | ) | (328,971 | ) | ||||
Net cash used in financing activities | (69,669 | ) | (209,303 | ) | ||||
Gross capital expenditures | (393,763 | ) | (377,687 | ) | ||||
Net capital expenditures | (338,424 | ) | (303,057 | ) | ||||
Proceeds from exercise of stock options | 6,530 | 5,686 | ||||||
Free cash flowa | 60,704 | 234,933 | ||||||
| December 31, 2007 | December 31, 2006 | |||||||
Cash and cash equivalents | $ | 58,233 | $ | 76,391 | ||||
Accounts receivable, net | 1,073,915 | 1,190,818 | ||||||
Net property and equipment | 2,380,473 | 2,269,846 | ||||||
Total assets | 4,996,021 | 5,952,237 | ||||||
Asset backed securitization borrowings | 180,000 | 225,000 | ||||||
Current maturities of long-term debt | 231,955 | — | ||||||
Long-term debt, less current portion | 822,048 | 1,058,496 | ||||||
Total debt | 1,234,003 | 1,283,496 | ||||||
Total shareholders' equity | 1,612,305 | 2,192,549 | ||||||
Debt to capitalizationb | 43.4 | % | 36.9 | % | ||||
a | Management uses free cash flow as an indication of the cash available to fund additional capital expenditures, to reduce outstanding debt (including current maturities), or to invest in our growth strategies. Free cash flow is calculated as net cash from operating activities plus stock option proceeds less net capital expenditures. This measurement is used for internal management purposes and should not be construed as a better measurement than net cash from operating activities as defined by generally accepted accounting principles. |
b | We calculate debt to capitalization as total debt divided by total debt plus total shareholders' equity. |