YRC Worldwide Inc. said reorganization efforts and poor weather were responsible for financial losses during the first quarter of 2014.
Consolidated operating revenue for the first quarter of 2014 was $1.21 billion, with a consolidated operating loss reported at $32.4 million, the company said in a news release. The company reported consolidated operating revenue of $1.16 billion for the first quarter of 2013 and consolidated operating income of $9.9 million, which included a $4.5 million gain on asset disposals.
The company reported an adjusted EBITDA of $23.4 million for the first quarter of 2014, as compared to adjusted EBITDA of $60.7 million for the first quarter of 2013.
"We faced numerous challenges during the first quarter," said YRC Worldwide CEO James Welch. "This was one of the worst winter seasons in my more than 30 years in trucking. We estimate that it negatively impacted our operating income by approximately $20 million. The main culprits were lower volumes, decreased productivities and higher use of purchased transportation."
The year-over-year decline in adjusted EBITDA is attributable to a $13.2 million increase in expense related to workers' compensation, bodily injury and cargo claims, the release said.
"The good news is that during the first quarter of 2014, we laid the foundation for our future operational improvements based on changes provided by the recently ratified (stock transactions), more specifically the establishment of a uniform national attendance policy, payment of vacation based on the number of hours worked and, to a lesser extent, our new over-the-road purchased transportation policy," Welch said. "I am pleased with the progress we've made during the first quarter in implementing these new policies. However, ... I believe it will take the better part of 12 months before we experience the full effect of the operationally-related policy changes."
In January, the company issued $250 million of common and preferred stock, the proceeds of which were used to retire the company’s convertible notes. Additionally, approximately $50 million in principal amount of the company’s other convertible notes were exchanged or converted to common stock.
That was preceded by a new five-year contract extension with its 30,000 Teamsters, in which the company gained concessions.
Lebanon-based New Penn Motor Express Inc. is a regional trucking subsidiary of YRC. The parent company also operates a large warehousing facility in Cumberland County.
Celadon Trucking Services Inc., an Indianapolis-based trucking company with a large Carlisle operation, reported strong first-quarter revenues.
Revenue for the quarter increased 29.1 percent to $193.2 million, compared to $149.6 million in the March 2013 quarter. Freight revenue, which excludes fuel surcharges, increased 31 percent to $155.6 million in the first quarter 2014 from $118.7 million in the first quarter 2013. Net income decreased 20.5 percent to $3.5 million in the first quarter 2014 from $4.4 million for the same quarter last year. Earnings per diluted share decreased to 15 cents in the first quarter 2014 from 19 cents for the same quarter last year.
For the nine months ending in March, revenue increased 24.5 percent to $561.9 million, up from $451 million for the same period last year. Freight revenue, which excludes fuel surcharges, increased 27.2 percent to $454.8 million, up from $357.6 million for the same period last year. Net income decreased 24.5 percent to $15.2 million, down from $20 million for the same period last year. Earnings per diluted share decreased to 64 cents, down from 86 cents for the same period last year.
"Severe weather conditions negatively impacted our results for the March 2014 quarter," said Paul Will, president and CEO of Celadon. "The winter storms encountered were widespread and significantly affected both fleet utilization and operating costs."
Celadon previously acquired Carlisle-based YRC Glen Moore Inc., formerly a division of YRC Worldwide Inc.