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YRC Worldwide Inc. narrowed its losses during the third quarter, announced plans to change its name to Yellow and expanded its board of directors.
The Overland Park, Kan., motor carrier said its Q3 net loss fell 87.5% to $2 million from $16 million in the same period a year earlier. Diluted earnings per share decreased to 4 cents a share from 48 cents. Revenue dipped 5.9% to $1.2 billion from $1.3 billion.
The company is undergoing a broad restructuring that will consolidate multiple brands’ operating systems into a single platform and upgrade its fleet of aged tractors and trailers. A $700 million CARES Act federal loan made to YRC in July provides the funding for the initiatives. The CARES Act loan is part of a federal stimulus program to shore up what the government considered essential businesses. YRC provides freight services for the military. The U.S. government gained a 30% stake in the company and broad federal oversight as part of the deal.
CEO Darren Hawkins
CEO Darren Hawkins said in a Nov. 2 conference call with industry analysts that the motor carrier will spend much of the money on improving YRC’s fleet. The company plans to spend about $75 million in the fourth quarter on 300 new tractors, 950 new trailers and 200 used trailers. The purchases will reduce maintenance expenses, improve on-time delivery, add safety features and increase fuel efficiency, all adding to profitability, Hawkins said.
YRC plans to spend another $325 million on tractors and trailers next year.
Hawkins said that changing the corporation’s name to its legacy Yellow brand makes sense given where the motor carrier is headed.
A Yellow truck is seen on Interstate 65 in Shepherdsville, Ky. in May of 2018. YRC Worldwide is changing its corporate name to its legacy Yellow brand. YRC Freight began as Yellow Cab Transit Co. in 1924. (John Sommers II for Transport Topics)
“The YRC Worldwide name was chosen over a decade ago when the strategy of the company involved global pursuits. Over the last several years, we have been focusing on our strength of being a well-positioned North American carrier,” Hawkins said.
The company has never moved freight under the YRC name, he noted.
The rest of its less-than-truckload brands, including Holland, New Penn, Reddaway and YRC Freight, as well as its HNRY Logistics division, will continue operating under their current names.
The motor carrier also announced several executive and board room changes as part of its third-quarter financial report. CFO Jamie Pierson resigned from the company and its board of directors.
Hawkins said the departure arose from executive compensation limitations place on the company by the terms of the federal loan. He said Pierson wasn’t satisfied with the cap placed on his compensation and decided to move on.
“This departure does not reflect any disagreements about the company’s past financial reports or disclosures,” YRC said in a statement. It appointed Dan Olivier as interim CFO. Previously Olivier was vice president, financial planning and analysis at YRC.
Additionally, the company promoted Leah Dawson to executive vice president and general counsel from assistant general counsel. Plus, it added Darrel Harris in a new position of executive vice president of strategic initiatives. He most recently served as CEO of Xpress Global Systems.
YRC also named two new members to its board of directors — former New Mexico Gov. Susana Martinez and Shaunna D. Jones. Martinez, a Republican, was the first female Hispanic governor in the U.S. and the first female governor of New Mexico, serving from 2011 to 2019.
YRC said Jones has a legal background focused on transformation and strategic initiatives and currently serves as the U.S. director of diversity and inclusion at the Cleary Gottlieb Steen & Hamilton law firm.
“As we move forward with our work to operate as one company, Governor Martinez’s and Ms. Jones’ backgrounds will enhance our ability to grow while building our workforce with leaders that bring to us new perspectives and experiences,” Hawkins said.
In other financial news, YRC said that less-than-truckload revenue per hundredweight, including fuel surcharge, fell 4% in the third quarter compared to the same period a year earlier. Its less-than-truckload weight per shipment increased by 2.2%. That netted out as a less-than-truckload revenue per shipment decline of 1.9% compared to the same period in 2019.
Excluding fuel surcharge, less-than-truckload revenue per hundredweight fell 1.4% and revenue per shipment rose 0.8%.
Less-than-truckload tonnage per day decreased by 4.1% compared to the prior-year quarter. Sequentially, less-than-truckload tonnage per day improved 6.2% in September over August.
New contracts signed in the third quarter had an average 4% price increase, a trend that has continued through October, Hawkins said.
“I am excited about where the company stands today and its future. With growing volume, improving pricing, investments in equipment and technology and strong leaders joining our management team and board, I remain confident that we are well-positioned for 2021,” Hawkins said.
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