CHICAGO (Reuters) - Leading trucker YRC Worldwide (YRCW.O), which narrowly averted bankruptcy in December, expects to have a “global solution” to looming 2011 financial obligations within the next few months, the company’s top executive said on Monday.
The plan comes as improved business volumes are seen helping the still-struggling company post gains through the end of the year.
“We are not out of the woods yet. We’ve still got a lot of things to do, but ... we expect to be back on our feet by the end of the year,” YRC Chairman and CEO William Zollars said at the Reuters Manufacturing and Transportation Summit in Chicago.
Zollars and other executives with the Overland Park, Kansas-based company are to meet Tuesday with a new board of directors appointed after the debt-for-equity swap in December that kept the company afloat. The new board includes members with expertise in operational and capital restructuring, both high on the priority list for YRC.
Zollars said the focus was on securing agreements with lenders and union leaders to trim deferred interest and pension benefits obligations that are set to hit YRC in 2011. Combined, those obligations amount to more than $100 million per quarter.
“We’ve got to come up with a solution for 2011,” said Zollars. “We expect that we will have a solution to that within the next few months.”
One key ingredient, Zollars said, is federal legislation that would address multi-employer pension funds and potentially limit obligations to “orphan” retirees -- individuals who never worked for YRC. That class represents about 40 percent of YRC’s pension burden, Zollars said.
YRC warned last December that it might have to file for bankruptcy protection if the debt-for-equity swap was not successful.
Operationally, the company is focused on continuing to woo back customers lost over the last year, and is seeing progress both in adding customers and adding volume tied to a pickup in the economy, Zollars said.
Tonnage climbed more than expected in March, April and in the first part of May, Zollars said.
Pricing levels have remained strong and could strengthen further through 2010, Zollars said. He predicted the company would show positive EBITDA (earnings before interest, taxes, depreciation and amortization) through the rest of 2010.
YRC last week reported a first-quarter net loss of $274.1 million, or 53 cents a share, compared with a year-ago loss of $273.8 million, or $4.61 a share. The year-ago figures came before the company’s highly dilutive debt-for-equity swap.
Reporting by Carey Gillam, editing by Matthew Lewis