YRC Worldwide Will Pay Union Profit Sharing Despite $23.5 Million Loss in Fourth Quarter
YRC Worldwide Inc. will make $5.5 million in profit-sharing payments to some of its union employees after posting a small profit for 2015.
The bonuses, set to go out soon, were triggered at its three regional trucking companies: Holland, Reddaway and New Penn. YRC Freight, the national operation, did not hit operating targets needed to earn the profit-sharing payments.
Members of the International Brotherhood of Teamsters accepted the profit-sharing deal as part of a sweeping contract extension they approved in 2014 to keep Overland Park, Kansas-based YRC Worldwide rolling.
The payments will go to “eligible union employees” at the regional carriers because they collectively hit an operating performance target set in the contract agreement.
Each Teamster collecting will receive an amount equal to 1 percent of his or her W-2 earnings for 2015. This was the first chance YRC employees had to earn the bonus.
“We think it’s an investment that’s going to pay dividends, and we’re happy to pay it,” CEO James Welch said during a conference call with analysts.
YRC Worldwide, which owns the regional and national carriers, announced the profit-sharing payments as it posted a $23.5 million loss in the final months of last year, leaving it with a tiny profit for 2015.
The loss equaled 73 cents a share. A year ago, YRC had a $6.2 million profit in October, November and December, equal to 16 cents a share.
Its recent loss included a $28.7 million expense related to non-union pensions.
Welch, in the announcement, cited progress the company made in shifting its operations toward a more profitable business, giving up less profitable loads.
"In 2015, we successfully executed our strategy of improving price, freight mix and profitability over volume and market share,” he said in the announcement. “Despite the challenges of decreasing fuel-surcharge revenue and a flattening economy in the second half of the year, our full-year operating income more than doubled prior-year results, even after the impact of a non-cash pension settlement charge.”
Revenue in the quarter was $1.143 billion compared with $1.218 billion a year ago.
For all of 2015, YRC earned a $700,000 profit compared with a loss of $67.7 million in 2014. Revenue for the year was $4.8 billion, down from $5.1 billion in 2014.
