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The recently rebranded Yellow Corp. — formerly YRC Worldwide — narrowed annual losses by nearly half even as fourth-quarter losses widened, and said it is bolstering operations through property divestitures and investments in new equipment.
Yellow’s new name took effect Feb. 4, the date of its earnings release in which it reported Q4 net losses widened to $18.7 million, or minus 37 cents a share, compared with a loss of $15.3 million, minus 46 cents, in 2019. The company’s Q4 revenue inched up to $1.164 billion from $1.159 billion a year earlier.
For the full year, Overland Park, Kan.-based Yellow’s net loss narrowed to $53.5 million, minus $1.28, compared with a loss of $104 million, minus $3.13, in 2019. The company’s previous-year results included an $11.2 million loss on extinguishment of debt associated with the refinancing of the company’s term loan agreement.
Full-year revenue fell 7.3% last year to $4.51 billion compared with $4.87 billion in 2019. Full-year operating revenue was $4.514 billion, and operating income was $56.5 million, which included a $45.3 million net gain on property disposals. This compares with full-year 2019 operating revenue of $4.871 billion and operating income of $16.2 million, which included a $13.7 million net gain on property disposals and $8.2 million for a noncash impairment charge related to the write-down of an intangible asset.
“During the fourth quarter, volume and pricing continued to improve in a tighter capacity environment,” CEO Darren Hawkins said. “As the industrial and retail segments of the economy rebound, a shortage of drivers is keeping a lid on LTL capacity. Overall, the industry is stable and well-positioned for a strong 2021.”
The company noted that the names of its LTL brands — Holland, New Penn, Reddaway and YRC Freight — as well as HNRY Logistics, will not change.
It is the right time to reintroduce the Yellow Corp. name and modernize the holding company brand.
CEO Darren Hawkins
“As we continue our transformation into a super-regional LTL freight carrier, it is the right time to reintroduce the Yellow Corp. name and modernize the holding company brand,” Hawkins said. “Once we announced our plans to rebrand, our customers and employees shared their excitement. The Yellow brand is synonymous with the LTL industry, and we are honored to continue its proud legacy of service with one of the largest, most comprehensive logistics and LTL networks in North America.”
During a conference call with investors, Hawkins said the company is adding new tractors, trailers, box trucks, and other equipment with funds from a $700 million federal loan under the CARES Act that it received in July.
The act is part of a federal stimulus program to shore up what the government considered essential businesses. Yellow provides freight services for the military. The U.S. government gained a 30% stake in the company and broad federal oversight as part of the deal.
Hawkins said the company drew $176 million from the load in January.
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“These funds will be used to invest in our fleet,” he said, and described as “significant” the positive impact the new tractors and trailers will have on the age and efficiency of the fleet. “Our drivers are also excited about the new rolling stock that we are on-boarding.”
By the end of 2020, the company purchased 300 new tractors and 1,200 trailers. In the first quarter of this year, it plans to buy 1,110 tractors, 1,900 trailers, and 250 containers.
Yellow will begin trading on the Nasdaq exchange Feb. 8 under the symbol YELL. Last November, the company then known as YRC, announced plans for the rebranding, with a target date of early 2021. The Yellow name dates to the early 20th century, when the Harrell family founded the Yellow Cab Co. in Oklahoma City.
Yellow ranks No. 6 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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