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A. We continue to see sequential improvement. Business volumes and earnings are up when compared to the first quarter of 2010. Tonnage at YRC was up 11 percent; tonnage at our regional companies showed an increase of 15.5 percent.
In addition, liquidity improved by $40 million during this quarter, and -- as expected -- we reported positive adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations well in excess of our covenant levels.
For the second quarter ending June 30, 2010, the company announced a net loss of $9.5 million and a $.01 loss per share on an average outstanding share count of 1.078 billion. As a comparison, the company reported a net loss of $309 million and a $5.20 loss per share in the second quarter of 2009 with average shares outstanding of 59 million.
A. At June 30, 2010, the company reported cash and cash equivalents of $144 million, unrestricted availability of $8 million and unused restricted revolver reserves of $129 million, subject to the terms of the company's credit agreement, for a total of $281 million. As a comparison, at March 31, 2010, the company reported a total of $241 million.
A. With the sequential growth in business and the significant operating momentum we achieved throughout the second quarter, YRCW is positioned for further growth. We do expect to achieve positive EBITDA in the third quarter in excess of the second quarter.
A. We are working with our stakeholders to gain financial stability, and we are focused on serving our customers through our supply chain solutions expertise - these are the strategies that helped us manage through past challenges, and they're the strategies that are fueling our growth. Additional steps recently taken to support progress:
A. The support of our lender group continues to play a key role in our progress. The new amendment provides us with additional liquidity to support our business and our growth. For example, the amendment allows us to retain 100 percent of the proceeds from the Austin Ventures acquisition of portions of YRC Logistics.
With this amendment, adjusted EBITDA now includes a new add back for charges, expense and losses from permitted dispositions and discontinued operations. For the second quarter of 2010, the company's adjusted EBITDA under this amendment was $40 million, as compared to the covenant requirement of $5 million.
A. Factors unrelated to actual company performance can impact the price and trading volumes of YRCW stock. The per-share price of YRCW stock continues to vary. The per-share price doesn't impact our ability to serve you.
A. The YRCW Board of Directors has been considering a reverse stock split to improve the per-share price and help meet Nasdaq listing requirements. At this time, a date has not been finalized, and we are comfortable that we can effectively work with Nasdaq to address the listing requirements.
A. The successful note exchange in December 2009 allowed us to begin 2010 with a significantly improved balance sheet, additional liquidity and positive momentum. It also changed the ownership of the company and the composition of our board. Six new members have joined our board of directors, bringing with them a range of skills and experience, including an understanding of capital markets, pension planning and operations.
A. Following our debt-for-equity exchange at the end of 2009, about $70 million in 2010 note obligations remained. As part of our comprehensive financial recovery plan, in February, YRC Worldwide reached a definitive agreement with investors for private placement of $70 million in new 6 percent convertible notes to satisfy those remaining obligations.
A. The current multi-employer system forces YRC Worldwide and many other businesses to support retirees who never worked for them. This was a problem that was largely hidden until the recession hit, but the existing system is unfair and unsustainable. We want to support the retirement of our own employees, and we're pleased that legislation has now been introduced in both the House and the Senate. The issue has bi-partisan support, the attention of the administration, and we're optimistic about the timing and growing momentum to bring about the needed reforms.
A. We appreciate the continued confidence customers demonstrate in us by increasing their shipments. Second quarter results report that tonnage per day was up 11 percent for national transportation and up 15.5 percent for our regional brands over the first quarter.
The boost in shipments supports the results of a 2010 business-outlook survey we conducted in January with 5,700 customers. The results fell right in line with economic forecasts for modest growth and a stabilizing economy: 62 percent said they were optimistic their business volumes would increase this year; 85 percent said they intended to increase or maintain their YRC Worldwide shipments.
Positive feedback from customers continues to confirm the trends we're seeing. We have grown business with existing customers and are building business with new customers. We are focused on creating an exceptional customer experience.
A. It is important to keep in mind that the 10-K focused on 2009 - not the progress we've been making. The auditors included language that is indicative of the challenges we faced in 2009 as well as uncertainties posed by the operating environment and overall economy. In addition, there are accounting and auditing requirements that require cautionary language when there is uncertainty of future events, but it is not unexpected in our case. This language appears in other filings and is similar to language disclosed by other companies significantly impacted by the recession.
It's important for you to know that we will continue to deliver on our customer commitments. We continue taking aggressive actions through our plans to keep our organization headed in the right direction and help us achieve profitability. We're seeing positive trends and we're using every opportunity to build on them.
A. Yes. We have decades of experience across our brands and have managed through downturns before. We are committed to our customers. YRC Worldwide has taken important steps through the implementation of our comprehensive recovery plan to improve the health of our company. We have the operational ability to deliver on our promises to our customers. With our organizational structure and closer alignment of YRC sales and operations, we expect to see continual improvements.
The efficiency and effectiveness improvements at our regional companies should further enhance our industry-leading next-day and regional services. Our regional companies consistently outperform industry benchmarks in on-time deliveries, damage-free service and accurate invoices.
A. Choice in the marketplace gives you a competitive advantage. Choice means you have better options. We're good for your business. Strong YRC Worldwide brands provide you with comprehensive, flexible transportation and logistics solutions. We bring you the most comprehensive network in North America, run by the finest experts in the business.
Forward-Looking Statements:
This document 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 "will," "expects," and similar expressions are intended to identify forward-looking statements. It is important to note that the company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including (among others) our ability to generate sufficient cash flows and liquidity to fund operations, which raises substantial doubt about our ability to continue as a going concern, 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, 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 SEC.
The company's expectations regarding multi-employer pension plan reform are only its expectations regarding this matter. The impact to the company and the multi-employer pension plans to which it contributes of such reform is subject to a number of conditions, including (among others) whether Congress passes legislation to reform multi-employer pension plans and the timing of, and provisions included in, such legislation.
The company's expectations regarding liquidity are only its expectations regarding this matter. Actual liquidity levels will depend upon (among other things) the company's operating results, the timing of its receipts and disbursements, the company's access to credit facilities or credit markets, the company's ability to continue to defer interest and fees under the company's credit agreement and ABS facility and interest and principal under the company's contribution deferral agreement, the continuation of the existing union wage reductions and temporary cessation of pension contributions, and the factors identified in the preceding paragraphs.
The company's expectations regarding its ability to close on the remaining $20.2 million of 6% notes are only its expectations regarding this matter. The closing of the remaining $20.2 million of the 6% notes is subject to satisfaction of customary closing conditions as set forth in the company's Note Purchase Agreement dated February 11, 2010, as modified by the letter agreement.
The company's expectations regarding its ability to close on the sale of YRC Logistics and the liquidity that the sale will provide are only its expectations regarding these matters. The closing of the sale of YRC Logistics is subject to satisfaction of certain closing conditions, including approval of multi-employer pension funds to which the company contributes. The net proceeds from the sale of YRC Logistics are subject to final determination of fees and expenses that the company incurs in connection with the sale.
The company's expectations regarding its ability to satisfy Nasdaq listing requirements for minimum bid price of the company's common stock are only its expectations regarding this matter. The closing bid price of the company's common stock depends on many factors, including without limitation, actual or expected fluctuations in the company's operating results, changes in general economic condition or conditions in the company's industry generally, changes in conditions in the financial markets, the effect of any issuance of additional shares of the company's common stock and whether the company's board of directors effects a reverse stock split and the timing of, and the reverse stock split ratio for, any reverse stock split approved by the board.
The company's expectations regarding the timing and degree of market share growth are only its expectations regarding these matters. Actual timing and degree of market share growth could differ based on a number of factors including (among others) the company's ability to persuade existing customers to increase shipments with the company and to attract new customers, and the factors that affect revenue results (including the risk factors that are from time to time included in the company's reports filed with the SEC).
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