YRC Worldwide Inc. (NASDAQ:YRCW) Files An 8-K Regulation FD DisclosureItem 7.01.
| • | Equity-based compensation is an element of the Company’s long-term incentive compensation package, although Adjusted EBITDA excludes employee equity-based compensation expense when presenting the Company’s ongoing operating performance for a particular period; and |
| • | Other companies in the Company’s industry may calculate Adjusted EBITDA differently than it does, limiting its usefulness as a comparative measure. |
Because of these limitations, the Company’s non-GAAP measures, including Adjusted EBITDA, should not be considered a substitute for performance measures calculated in accordance with GAAP. The Company compensates for these limitations by relying primarily on its GAAP results and using its non-GAAP measures as secondary measures.
The following table provides a reconciliation of projected operating income to projected Adjusted EBITDA for the three months ending June30, 2017.
Three Months Ended June30, 2017
| Low | High | |||
|
(in thousands) |
||||
|
Reconciliation of projected operating income to projected Adjusted EBITDA: |
||||
|
Operating income |
$ | 46,000 | $ | 56,000 |
|
Depreciation and amortization |
38,000 | 38,000 | ||
|
(Gains)/losses on property disposals, net |
(3,000 | ) | (3,000 | ) |
|
Letter of credit expense |
1,000 | 1,000 | ||
|
Equity-based compensation expense |
3,000 | 3,000 | ||
|
Other, net(a) |
1,000 | 1,000 | ||
|
Adjusted EBITDA |
$ | 86,000 | $ | 96,000 |
| (a) | As required under our Term Loan Agreement, Other, net shown above consists of the impact of certain items to be included in Adjusted EBITDA. |
The following table provides a reconciliation of projected operating income to projected Adjusted EBITDA for the twelve months ending December31, 2017.
Twelve Months Ended December31, 2017
| Low | High | |||
|
(in thousands) |
||||
|
Reconciliation of projected operating income to projected Adjusted EBITDA: |
||||
|
Operating income |
$ | 150,000 | $ | 170,000 |
|
Depreciation and amortization |
152,000 | 152,000 | ||
|
(Gains)/losses on property disposals, net |
1,000 | 1,000 | ||
|
Letter of credit expense |
7,000 | 7,000 | ||
|
Restructuring professional fees |
2,000 | 2,000 | ||
|
Equity-based compensation expense |
7,000 | 7,000 | ||
|
Other, net(a) |
1,000 | 1,000 | ||
|
Adjusted EBITDA |
$ | 320,000 | $ | 340,000 |
| (a) | As required under our Term Loan Agreement, Other, net shown above consists of the impact of certain items to be included in Adjusted EBITDA. |
Forward-Looking Statements
This Item 7.01 contains forward-looking statements within the meaning of Section27A of the Securities Act and Section21E of the Exchange Act. Words such as “will,” “expect,” “intend,” “anticipate,” “believe,” “could,” “would,” “should,” “may,” “project,” “forecast,” “propose,” “plan,” “designed,” “enable,” and similar expressions which speak only as of the date the statement was made are intended to identify forward-looking statements. Forward-looking statements, including the Company’s projected financial performance for second quarter 2017 and full-year 2017, are inherently uncertain, are based upon current beliefs, assumptions and expectations of Company management and current market conditions, and are subject to significant business, economic, competitive, regulatory and other risks, uncertainties and contingencies, known and unknown, many of which are beyond our control. Our future financial condition and results could differ materially from those predicted in such forward-looking statements because of a number of factors, including (without limitation): general economic factors; business risks and increasing costs associated with the transportation industry; competition and competitive pressure on pricing; the risk of labor disruptions or stoppages; increasing pension expense and funding obligations; increasing costs relating to our self-insurance claims expenses; our ability to finance the maintenance, acquisition and replacement of revenue equipment and other necessary capital expenditures; our ability to comply and the cost of compliance with, or liability resulting from violation of, federal, state, local and foreign laws and regulations; impediments to our operations and business resulting from anti-terrorism measures; the impact of claims and litigation expense to which we are or may become exposed; failure to realize the expected benefits and costs savings from our performance and operational improvement initiatives; our ability to attract and retain qualified drivers and increasing costs of driver compensation; privacy breach or IT system disruption; risks of operating in foreign countries; our dependence on key employees; seasonality; changes in the cost of fuel or the index upon which we base our fuel surcharge and the effectiveness of our fuel surcharge program in protecting us against fuel price volatility; our ability to generate sufficient liquidity to satisfy our cash needs and future cash commitments, including (without limitation) our obligations related to our indebtedness and lease and pension funding requirements, and our ability to achieve increased cash flows through improvement in operations; limitations on our operations, our financing opportunities, potential strategic transactions, acquisitions or dispositions resulting from restrictive covenants in the documents governing our existing and future indebtedness; our failure to comply with the covenants in the documents governing our existing and future indebtedness; fluctuations in the price of our common stock; dilution from future issuances of our common stock; our intention not to pay dividends on our common stock; that we have the ability to issue preferred stock that may adversely affect the rights of holders of our common stock; and other risks and contingencies, including (without limitation) the risk factors that are included in our reports filed with the SEC, including those described under “Risk Factors” in our annual report on Form 10-K and quarterly reports on Form 10-Q.
About YRC Worldwide Inc. (NASDAQ:YRCW)
YRC Worldwide Inc. (YRC Worldwide) is a holding company that, through its subsidiaries and its interest in a Chinese joint venture, offers a range of transportation services. The Company has a less-than-truckload (LTL) networks in North America with local, regional, national and international capabilities. It offers supply chain solutions enabling customers to ship industrial, commercial and retail goods. The Company operates through two segments: YRC Freight and Regional Transportation. The Company’s YRC Freight segment is focused on business opportunities in national, regional and international markets. YRC Freight provides for the movement of industrial, commercial and retail goods. The Company’s Regional Transportation segment is a transportation service provider focused on business opportunities in the regional and next-day delivery markets. Regional Transportation comprises USF Holland Inc. (Holland), New Penn Motor Express, Inc. (New Penn) and USF Reddaway Inc. (Reddaway).
