Margins have NOT improved.
In retrospect, the first Q of 2013 was a lucky fluke. Everything went right. YRCW had operating earnings and the stock moved up in a massive short covering rally from 7 to 36.
YRCW went back down to 7 less than six months later. There was no net income after interest expenses in the first Q of 2013. Since 2008, there has yet to be any net income after interest expenses. YRCW has consistently produced negative earnings surprises.
In the first Q of 2014, YRCW lost money because of bad weather. Managing through the weather, good or bad, is what transportation firms are supposed to do. Why are the expenses of bad weather NOT charged to customers? If YRCW guarantees deliveries, but there's snow, why does YRCW NOT receive more money for making those deliveries?
1st Q 2014 revenue was $1210 million versus 1st Q 2013 revenue of $1162 million.
Tonnage shipped rose 2.5%
Revenue went up by $48 million BUT expenses went up by $109 million -- twice as much. Most of that increase is $44 million in salaries and wages, $17 million in purchased transportation, and $16 million in operating expenses.
Because of the refinancing, funds were available to pay overtime and to pay for gas and oil. Instead of managing tightly through the snow, instead of being cheap, and instead of demanding customers to pay MORE because of the snow, YRCW charged customers the SAME and used the funds raised from the refinancing for normal operating expenses. Rephrased, unionized employees were threatened with possible bankruptcy and liquidation in order to pay for every day expenses like gas at the pump and their own wages.
More than $30 million was just paid out in bonuses to management and outside consultants for enabling YRCW to stay in business. Employees got to keep their jobs. Shareholders were rewarded by not suffering a THIRD reverse stock split; YRCW had reverse splits of 25 to 1 in 2010 and 300 to 1 in 2011
Disclosure: I am long YRCW.