Trucking company YRC Worldwide is “transitioning to a state of profitability” after emerging from “survival mode,” chief executive officer James Welch said Thursday.
Welch’s comment came as the Overland Park-based company said its first-quarter net loss was lower than a year ago. More to the point, its trucking business operated profitably, though just above breakeven.
The net loss came about because operations didn’t generate enough profit to cover the interest payments on the company’s debt. It did, however, provide room to invest in new trucks and trailers, safety equipment and safety training.
Chief financial officer Jamie Pierson said the investments improve profitability by increasing fuel efficiency, reducing maintenance expenses and avoiding injuries and costly accidents.
It also meant YRC Worldwide has returned to matching 401(k) plan contributions that its 5,000 non-union employees make to their retirement accounts. YRC has about 33,000 employees, most of whom are represented by the International Brotherhood of Teamsters.
Welch said YRC was in survival mode when he became CEO in mid-2011, gained stability and is now moving toward profitability.
The first-quarter loss equaled $21.6 million, or 70 cents a share, down substantially from the net loss of $70.2 million a year ago.
Revenue was $1.186 billion, down 2 percent from $1.2 billion a year ago.
Welch said the drop in revenue reflected an effort at its nationwide YRC Freight business to shed less profitable work.
“No doubt we have traded volume for yield, but we are comfortable with the plan we are executing,” he said.
YRC Freight and three regional carriers had a $3.7 million operating profit, compared with a year-ago $32.4 million operating loss.
YRC Worldwide also said it leased 225 new tractors during the first quarter and 600 new trailers. During all of last year, the company leased 350 tractors and 900 trailers.
YRC Worldwide’s regional carriers showed a $5.3 million dip in revenue to $448.8 million during the quarter.