YRC Worldwide Inc. (YRCW:US), the trucker that stumbled after reaching No. 1 in the U.S. through mergers, said it’s focused on restructuring its main freight business after Arkansas Best Corp. (ABFS:US) spurned talks on a takeover this year.
“We are not going down that path any further,” Chief Financial Officer Jamie Pierson said in an interview of YRC’s March bid for Arkansas Best’s largest unit. “That was very short lived and a long time ago.”
YRC in May said it remained interested in acquiring ABF Freight Systems Inc. even after parent Arkansas Best rejected an offer to begin talks. That strategy would have shifted Overland Park, Kansas-based YRC’s focus away from restructuring its own freight operations, which carry goods from multiple customers on each truck.
Pierson reiterated YRC’s expectation that its freight unit restructuring, the second-largest in company history, will improve earnings before interest, taxes and depreciation by $25 million to $30 million a year. Changes include cutting 800 jobs, shedding 29 facilities, optimizing its shipping network and leasing new tractors and trailers.
“We are laser focused on the North American LTL market,” he said, referring to the so-called less-than-truckload segment. “We are not trying to be all things to all people. It’s not sexy, but it’s what we do best. We are going to continue to double down on our core competency.”
YRC negotiated credit agreements to avoid bankruptcy in 2011 and 2009 after taking on debt to finance more than $2 billion in acquisitions (YRCW:US) last decade. The trucker has reported six straight annual losses.
It had a second-quarter net loss that narrowed to $15.1 million, or $1.72 a share, from $22.6 million, or $3.21, a year earlier, according to a statement today. Revenue fell less than 1 percent to $1.24 billion, trailing the $1.26 billion average of analysts (YRCW:US)’ estimates.
YRC tumbled (YRCW:US) 19 percent to $23.01 at 3:42 p.m. in New York. The shares had increased more than fourfold this year through yesterday.
“We continue to make progress” on the restructuring, Pierson said. “That’s proven out in the numbers. People take a snapshot of time and underestimate how difficult it is to change the direction of a $5 billion company.”
YRC hired Credit Suisse Group AG (CSGN) to work with financial adviser MAEVA Group on options for $1.35 billion in debt maturing in 2014 and 2015, including possible refinancings, the company said today. Pierson declined to provide additional details.
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