News & Information on Local 17

January 4, 2010

YRCW Interview With Barron's

YRCW Chairman Bill Zollars speaks in an interview with Barron's regarding the successful debt for equity swap.

Barron’s: How’d you make the deal happen?

Bill Zollars: We got a lot of good work done by our investment bankers. There were some people who just wanted a better deal. They were running the clock. And there were holders who wanted [Credit Default Swaps] CDS to pay off in a bankruptcy filing. Those were the hardest to get at. In the end, some bond holders had tendered and were really interested in the deal getting done, and they went out into the market and bought the bonds. I’ll never know exactly what happened because it happened at arms length from the company.

Barron’s: Were there any special concessions to close the deal?

Zollars: No. The preferred shares were used because we didn’t have enough common to satisfy the exchange, but the actual terms of the exchange never changed.

Barron’s: Some people still think you’re going to burn through cash in a month or a quarter and be in trouble.

Zollars: Those are people who’ve been talking about our debt the whole year, and every time they make a statement, we’ve proven them wrong. We’ve taken a third of debt off the balance sheet, we’ve balanced capacity in the company with the business lines we’re handling. From a customer standpoint that is significant. The customers we still have, it gives them confidence, and those that have left us will think about coming back to us. We’ve got the liquidity now to get through the seasonally weakest part of the year, and we’ve removed a lot of the costs that we were facing in 2010.

Barron’s: What are the immediate next challenges you face?

Zollars: We still have a stub amount of debt from the bond tenders to address. We’re in the process of putting a strategy together for that for the next couple of months. We’ll be in a position to talk more about the health of the balance sheet when we are generating significant positive cash flow, which we will in 2010.

Barron’s: How would you rate yourself as a leader in all this?

Zollars: I would put this management team up against anybody. We turned in four years of record earnings and revenue before we got hit by the worst recession we’ve ever seen. For myself, I try not to do much Monday-morning quarterbacking. As for where we’ve made mistakes, I’d rather not comment on that.

Barron’s: What’s the primary goal going forward? Will you keep the company’s structure as is, or will you sell off parts of it — Holland, etc.? Will you stay on as CEO?

Zollars: The way we’ve built the company we have is by having the broadest set of services to customers. We’ll have new ownership and a new board, and they’ll be reviewing the strategy. We will have a shareholder vote, sometime in the next few weeks with the new owners. We’re anxious to sit down and talk with them about the strategy. It’s up to the new board to review my staying, but I don’t expect to go anywhere.

Barron’s: Any complaints about the way this has been covered or talked about, on the Street or in the press?

Zollars: There was a lot of irresponsible behavior from analysts and media. We tried to present facts to people. Sometimes they chose to ignore those facts. The reason that’s unprofessional is that they put 35,000 families at risk on the basis of things that just aren’t true. We’ve seen a lot of that, every time we prove them wrong, it reduces their credibility.

Barron’s: Some of those 35,000 families will be worried about their jobs. What kind of pledge or commitment can you make to them?

Zollars: We’re in better financial shape now that we’ve gotten this done. We’ll be working hard every day to get back to levels of profitability. Team seems energized, lot of work left to do.