The plunge in oil prices shows no sign of abating; West Texas crude is falling toward $55/barrel as I write. One industry that benefits from this development is trucking – not only because their fuel costs are dropping rapidly, but also because falling gasoline prices will lead to consumers having more money to spend, which will lead to more goods being trucked.

YRC Worldwide Inc. (Nasdaq: YRCW) is one of the leading shipping companies in America. Investors have sometimes been skeptical about this stock, due to concerns about high debt levels and the inevitable battles with unions that are endemic to the trucking business. But the company has recently made important progress on both of these fronts. The stock went through a rough patch is September and October but is now enjoying a rebound.

YRC is the holding company for many brands, including YRC Freight, YRC Reimer, New Penn, USF Holland and USF Reddaway. The Kansas-based company has what may be the most comprehensive trucking network in North America. It offers shipping of industrial, commercial and retail goods.

One of the company’s subsidiaries, Michigan-based Holland, is growing so quickly that it recently had to move to a larger headquarters to accommodate all the growth.

YRC’s most recent earnings report was positive, continuing a long winning streak. Consolidated operating revenue for the third quarter of 2014 was $1.32 billion, $70.0 million, 5.6% higher than the $1.253 billion reported in the third quarter of 2013. At the same time, consolidated operating income increased from $5.8 million to $26.7 million, a $20.9 million increase from the third quarter of 2013.

“During the third quarter of 2014, we experienced solid yield increases while maintaining tonnage levels at YRC Freight,” said James Welch, chief executive officer of YRC Worldwide. “As previously reported, YRC Freight achieved total revenue per hundredweight increases of 2.8% in July, 3.3% in August and an additional 3.9% increase in September on a year-over-year basis.”

Welch continued: “As we move forward, we will focus on technology investments that we believe will optimize our network freight flow and provide favorable yield improvement opportunities. Executing on our strategy of improving price and managing our freight mix to ensure that we have the right freight at the right price will continue to be a priority.”

In the last couple of years YRC has been working to streamline its sometimes unwieldy collection of interlocking subsidiaries. It has combined the operations of its two big carriers, Roadway and Yellow Transportation. This complex reorganization seems to have gone off without a hitch.

The firm has some of the most experienced transportation professionals in the industry, and now has a more competitive wage and benefits package that will enable it to attract new members to the growing YRC workforce. The share price has gone on a roller coaster ride in the past 12 months, but the current upswing seems to be supported by the company’s fundamentals.

As the company has struggled with wage costs in recent years, its debt levels began rising to a point where analysts became wary about the stock. But YRC Worldwide has now successfully completed a series of transactions that will reduce debt by approximately $300 million.  

The company issued $250 million of common and preferred stock, the proceeds of which will be used to retire the company’s convertible notes. Approximately $50 million in principal amount of the company’s other convertible notes were exchanged or converted to stock. The company also announced that it successfully amended and extended its pension fund obligations to December 2019.

Beginning in late 2011, this management team set a very deliberate course to stabilize the company and return it to the prominence it once held. While they are not yet done with the turnaround, the equity investment and subsequent reduction of approximately $300 million in debt is a big step in the right direction.

The transaction will substantially “de-leverage” the company’s balance sheet and improve the company’s credit profile, allowing it to move forward with the final step in the company’s capital structure transformation which is refinancing the senior portion of the debt. Most importantly, it can now fully focus on investing in employees, equipment and technology and improving the customer’s experience.

A heartening development was that YRC’s Teamster employees have overwhelmingly ratified an extension of its collective bargaining agreement to March 2019.

With the new contract in place, YRC can take another significant step toward providing employees job security while providing lenders and investors the path they need for the company to achieve a complete recapitalization and achieve a healthy capital structure.

There may be some detours along the way, but YRC has taken the steps necessary to ensure it reaches its destination of higher profitability.

Tom Scarlett is an investment analyst with Personal Finance.