YRC Worldwide ends 2013 with liquidity of $228 million, cuts debt by $300 million in January

By Lisa Kerner

Charlotte, N.C., Feb. 27 - YRC Worldwide Inc. ended the fourth quarter with balance sheet cash and ABL availability of $228 million, "which is a slight decrease of $6 million from the third quarter of 2013," said chief financial officer Jamie Pierson.

"Our ability to maintain liquidity at this level is due to our continued active management of our balance sheet and working capital and current seasonality of the business cycle," Pierson said during the company's earnings call on Thursday.

As of Dec. 31, the borrowing base under the $400 million ABL was $376.4 million.

YRC reported liquidity, including cash, cash equivalents and availability under its ABL, of $251.3 million at Dec. 31, 2012, with a borrowing base of $369.8 million, according to the earnings news release.

Cash provided by operating activities was $12.1 million at the end of 2013, a $38 million improvement over the prior year.

Pierson highlighted financing transactions subsequent to quarter-end.

"On the 31st of January, we successfully completed a series of transactions that reduced our debt by approximately $300 million with the issuance of $250 million of common and preferred stock and the conversion of $50 million in principal amount of our series B notes," said Pierson. "The proceeds from the equity raise were used to pay off the 6% notes, which were due on Feb. 15, 2014, and the series A convertible notes, which were due on March 31, 2015."

Two weeks ago, YRC refinanced over $1.1 billion in senior credit facilities, which Pierson called "the final step in our two-year journey to provide a holistic solution to simplify the capital structure."

The company's nearest debt maturity is now March 2019.

Chief executive officer James Welch said 2013 was "not the year we forecasted" but expressed confidence that "the short-term, self-inflicted pain" endured in 2013 will result in long-term improvements in 2014 and beyond.

Financial highlights

Fourth-quarter consolidated operating revenue was up 3% year-over-year at $1.21 billion.

YRC reported consolidated operating revenue for the year ended Dec. 31 of $4.865 billion, 0.3% higher than 2012.

Fourth-quarter consolidated income was down $31.6 million from the prior-year period to an operating loss of $1.6 million.

Consolidated operating income for the year was up $4.3 million to $28.4 million, according to the earnings release.

YRC reported fourth-quarter adjusted EBITDA, on a non-GAAP basis, of $59.9 million, compared to $77 million for the fourth quarter 2012.

Adjusted EBITDA, on a non-GAAP basis, was $257.7 million for 2013, a $16.5 million improvement over 2012.

YRC is a trucking company based in Overland Park, Kan.

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