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8-K - FORM 8-K - Roadrunner Transportation Systems, Inc. | c12059e8vk.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
ROADRUNNER TRANSPORTATION SYSTEMS REPORTS
2010 FOURTH QUARTER AND YEAR-END RESULTS
2010 FOURTH QUARTER AND YEAR-END RESULTS
Cudahy, WI February 8, 2011 Roadrunner Transportation Systems, Inc. (NYSE: RRTS), a leading
non-asset based transportation and logistics services provider, today reported financial results
for the three months and year ended December 31, 2010.
The following table sets forth Roadrunners summary financial results for the three months and year
ended December 31. The pro forma data assumes the IPO and sale of additional shares upon exercise
of the underwriters overallotment option occurred at the beginning of 2010, and that the companys
current income tax rate of 38% is applied throughout each of the periods presented.
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||||||||||
(In thousands, except per share data) | Pro Forma | Actual | Actual | Pro Forma | Actual | Actual | ||||||||||||||||||
Total revenues |
$ | 165,796 | $ | 165,796 | $ | 127,932 | $ | 632,018 | $ | 632,018 | $ | 483,322 | ||||||||||||
Net revenues (total revenues less
purchased transportation costs) |
$ | 35,483 | $ | 35,483 | $ | 27,542 | $ | 137,973 | $ | 137,973 | $ | 104,464 | ||||||||||||
Depreciation and amortization |
750 | 750 | 804 | 3,114 | 3,114 | 2,967 | ||||||||||||||||||
Other operating expenses |
27,884 | 27,884 | 23,415 | 103,021 | 103,021 | 86,609 | ||||||||||||||||||
Acquisition transaction expenses |
180 | 180 | 628 | 569 | 569 | 1,148 | ||||||||||||||||||
IPO related expenses |
| | | | 1,500 | | ||||||||||||||||||
Operating income |
$ | 6,669 | $ | 6,669 | $ | 2,695 | $ | 31,269 | $ | 29,769 | $ | 13,740 | ||||||||||||
Operating income before acquisition transaction
expenses and IPO related expenses |
$ | 6,849 | $ | 6,849 | $ | 3,323 | $ | 31,838 | $ | 31,838 | $ | 14,888 | ||||||||||||
Loss on early extinguishment of debt |
$ | | $ | | $ | | $ | | $ | 15,916 | $ | | ||||||||||||
Provision (benefit) for income taxes |
$ | 2,438 | $ | 2,540 | $ | (475 | ) | $ | 11,255 | $ | 2,108 | $ | 337 | |||||||||||
Net income (loss) available to common
stockholders |
$ | 3,979 | $ | 3,877 | $ | (1,270 | ) | $ | 18,363 | $ | 2,826 | $ | (1,973 | ) | ||||||||||
Weighted average diluted shares
outstanding |
31,066 | 31,066 | 18,107 | 30,975 | 26,777 | 17,656 | ||||||||||||||||||
Diluted income (loss) per share available
to common stockholders |
$ | 0.13 | $ | 0.12 | $ | (0.07 | ) | $ | 0.59 | $ | 0.11 | $ | (0.11 | ) |
2010 Fourth Quarter Results
Revenues for the fourth quarter of 2010 increased 29.6% to $165.8 million compared to revenues of
$127.9 million for the fourth quarter of 2009. Operating income for the fourth quarter of 2010 was
$6.7 million compared to $2.7 million for the fourth quarter of 2009. Net income available to
common stockholders was $3.9 million for the fourth quarter of 2010, or $0.12 per diluted share,
compared to a net loss of $1.3 million for the fourth quarter of 2009, or $(0.07) per diluted
share. On a pro forma basis, assuming the companys current income tax rate of 38% was applied
throughout the fourth quarter of 2010, net income available to common stockholders for the quarter
would have been $4.0 million, or $0.13 per diluted share.
In discussing fourth quarter performance, Mark DiBlasi, President and CEO of Roadrunner, said,
We generated continued growth in revenue during the fourth quarter. Our growth primarily resulted
from new business trends and market share gains in all three of our business segments, as well as
the contribution from acquisitions we made in the second half of 2009. Our net revenues grew 28.8%
quarter over quarter and our operating income increased 147.5%. In addition, our overall operating
ratio improved from 97.9% in the fourth quarter of 2009 to 96.0% in the fourth quarter of 2010.
In our less-than-truckload business segment, customer growth drove a 12.3% increase in tonnage
quarter over quarter and a 20.2% increase in shipments. Sequentially from the third quarter, our
focus on pricing initiatives and reducing linehaul costs resulted in a 60 basis point improvement
in net revenue margin. Pricing improvements had a positive impact of approximately 120 basis points
and linehaul rate reductions drove an improvement of approximately 50 basis points. These factors
were partially offset by the effects of increased fuel costs, mix changes, and decreased density
during the holiday period.
Operating income in our truckload brokerage business more than doubled during the fourth quarter
from the prior year, as a result of a 28.0% increase in revenues and an expansion in net revenue
margin of 50 basis points. Our transportation management solutions business continued its strong
growth trends with a 39.3% increase in revenues and a 31.4% improvement in operating income quarter
over quarter.
For the year, our overall revenues increased 30.8%, net revenues grew 32.1%, and operating income
more than doubled from 2009. While we are pleased with these results given the challenges we faced
during 2010, we remain focused in the near-term on improving pricing and expanding capacity to
mitigate pressure on linehaul costs.
2010 Fourth Quarter Segment Information
Roadrunner has three operating segments: less-than-truckload (LTL), truckload brokerage (TL) and
transportation management solutions (TMS). Set forth below is selected segment financial
information excluding intercompany eliminations and corporate expenses:
For the LTL segment, revenues increased 28.8% to $105.1 million for the fourth quarter of 2010 from
$81.6 million for the fourth quarter of 2009. This reflects quarter over quarter tonnage growth of
12.3%, growth in revenue per hundredweight, including fuel surcharges, of 12.4%, and growth in
revenue per hundredweight, excluding fuel surcharges, of 10.0%. LTL net revenues for the fourth
quarter of 2010 were $25.7 million, or 24.4% of LTL revenues, compared to $20.2 million, or 24.8%
of LTL revenues, for the fourth quarter of 2009. The 40 basis point decrease in net revenue margin
reflects the net impact of a 450 basis point declinecollectively
caused by a 7.3% increase in linehaul cost per mile excluding fuel surcharges, a 6.6% decline in
weight per shipment, and increased fuel pricespartially offset by the positive effect of pricing
improvement initiatives and increased operating efficiencies. LTL operating income was $4.2 million
for the fourth quarter of 2010 compared to $1.7 million for the fourth quarter of 2009. As a result
of net revenue growth and operating leverage, the companys LTL operating ratio improved from 97.9%
to 96.0%.
Summary LTL operating statistics for the three months and year ended December 31 are shown below.
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
% | % | |||||||||||||||||||||||
2010 | 2009 | Change | 2010 | 2009 | Change | |||||||||||||||||||
Operating ratio |
96.0 | % | 97.9 | % | 94.7 | % | 96.9 | % | ||||||||||||||||
Tonnage (in thousands of tons) |
296.0 | 263.6 | 12.3 | % | 1,251.0 | 1,031.0 | 21.3 | % | ||||||||||||||||
Shipments (in thousands) |
446.0 | 371.1 | 20.2 | % | 1,824.8 | 1,494.9 | 22.1 | % | ||||||||||||||||
Revenue per hundredweight (incl. fuel) |
$ | 17.27 | $ | 15.37 | 12.4 | % | $ | 16.36 | $ | 15.29 | 7.0 | % | ||||||||||||
Revenue per hundredweight (excl. fuel) |
$ | 14.91 | $ | 13.55 | 10.0 | % | $ | 14.21 | $ | 13.71 | 3.6 | % | ||||||||||||
Weight per shipment (lbs.) |
1,327 | 1,420 | (6.6 | %) | 1,371 | 1,379 | (0.6 | %) | ||||||||||||||||
Linehaul cost per mile (excl. fuel) |
$ | 1.24 | $ | 1.16 | 7.3 | % | $ | 1.22 | $ | 1.18 | 3.8 | % |
Note: | Other than operating ratio, the statistics above do not include adjustments for
undelivered freight required for financial statement purposes in accordance with RRTS revenue
recognition policy. |
For the TL segment, revenues increased 28.0% to $43.8 million for the fourth quarter of 2010
from $34.2 million for the fourth quarter of 2009, primarily due to increases in market pricing and
tonnage, as well as expansion of the companys TL brokerage agent network. TL net revenues for the
fourth quarter of 2010 were $5.3 million, or 12.0% of TL revenues, compared to $3.9 million, or
11.5% of TL revenues, for the fourth quarter of 2009. TL operating income was $1.9 million for the
fourth quarter of 2010 compared to $0.9 million for the fourth quarter of 2009.
For the TMS segment, revenues for the fourth quarter of 2010 were $17.7 million, compared to $12.7
million for the fourth quarter of 2009. TMS net revenues for the fourth quarter of 2010 were $4.6
million, or 25.8% of TMS revenues, compared to $3.4 million, or 26.4% of TMS revenues, for the
fourth quarter of 2009. The decline in TMS net revenue margin was primarily attributable to the
rising rate environment in the over-the-road freight sector. TMS operating income was $1.2 million,
or 7.0% of TMS revenues, for the fourth quarter of 2010, compared to $0.9 million, or 7.4% of TMS
revenues, for the fourth quarter of 2009.
Acquisition of Morgan Southern
On February 3, 2011, Roadrunner acquired all of the outstanding stock of Morgan Southern, Inc. for
approximately $20 million in cash. Morgan Southern is a privately-held provider of intermodal
transportation and related services. With 19 terminals located throughout the United States, Morgan
Southern serves the majority of the countrys key intermodal markets. Its customer base consists
primarily of direct shippers, intermodal marketing companies, steamship lines and other port and
rail related transportation industries. The acquisition was financed with borrowings under
Roadrunners existing credit facility.
The Morgan Southern transaction is an excellent fit with our growth strategyit provides us with
a new service offering within our truckload segment and further expands our geographic profile.
Roadrunners sales force will serve as an extension of Morgan Southerns sales efforts to market
its intermodal services to new and existing Roadrunner customers. With growth in international
trade and continued improvements in rail efficiency, we believe favorable trends will continue in
the intermodal sector for the foreseeable future, said DiBlasi.
Morgan Southern will continue to operate in its current capacity under the leadership of Ben
Kirkland, its head of operations since 1996. Mr. Kirkland said, This is a very positive event for
Morgan Southern and its customers. Roadrunner is committed to ensuring maximum customer
satisfaction through continuity of Morgan Southerns personnel and expansion of its service
capabilities. We look forward to partnering with Roadrunner to execute a shared strategy for
profitable growth.
Peter Armbruster, CFO of Roadrunner, said, During calendar year 2010, Morgan Southern generated
approximately $57 million in revenues and approximately $4 million of earnings before interest,
taxes, depreciation, and amortization. We expect the Morgan Southern acquisition to be accretive to
our net earnings in 2011 and beyond.
Conference Call
A conference call is scheduled for Tuesday, February 8, 2011 at 4:30 p.m. Eastern Time. To access
the conference call, please dial 866-831-6247 (U.S.) or 617-213-8856 (International) approximately
10 minutes prior to the start of the call. Callers will be prompted for passcode 77505464. The
conference call will also be available via live webcast under the Investor Relations section of the
Companys website, www.rrts.com.
If you are unable to listen to the live call, a replay will be available through February 15, 2011,
and can be accessed by dialing 888-286-8010 (U.S.) or 617-801-6888 (International). Callers will be
prompted for passcode 29454873. An archived version of the webcast will also be available under the
Investor Relations section of the Companys website, www.rrts.com.
About Roadrunner Transportation Systems, Inc.
Roadrunner is a leading non-asset based transportation and logistics services provider offering a
full suite of solutions, including customized and expedited less-than-truckload, truckload,
transportation management solutions and intermodal solutions, and domestic and international air.
For more information, please visit: www.rrts.com.
Safe Harbor Statement
This release contains forward-looking statements that relate to future events or performance. These
statements reflect the companys current expectations, and the company does not undertake to update
or revise these forward-looking statements, even if experience or future changes make it clear that
any projected results expressed or implied in this or other company statements will not be
realized. Furthermore, readers are cautioned that these statements involve risks and uncertainties,
many of which are beyond the companys control, which could cause actual results to differ
materially from the forward-looking statements. These risks and uncertainties include, but are not
limited to, risks related to the integration of acquired companies, competition in the
transportation industry, the impact of the current economic environment, the companys dependence
upon purchased power, the unpredictability of and potential fluctuation in the price and
availability of fuel, the effects of governmental and environmental regulations, and other Risk
Factors set forth in the companys most recent SEC filings.
(Tables Follow)
ROADRUNNER TRANSPORTATION SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues |
$ | 165,796 | $ | 127,932 | $ | 632,018 | $ | 483,322 | ||||||||
Operating expenses: |
||||||||||||||||
Purchased transportation costs |
130,313 | 100,390 | 494,045 | 378,858 | ||||||||||||
Personnel and related benefits |
16,339 | 13,726 | 61,853 | 52,621 | ||||||||||||
Other operating expenses |
11,545 | 9,689 | 41,168 | 33,988 | ||||||||||||
Depreciation and amortization |
750 | 804 | 3,114 | 2,967 | ||||||||||||
Acquisition transaction expenses |
180 | 628 | 569 | 1,148 | ||||||||||||
IPO related expenses |
| | 1,500 | | ||||||||||||
Total operating expenses |
159,127 | 125,237 | 602,249 | 469,582 | ||||||||||||
Operating income |
6,669 | 2,695 | 29,769 | 13,740 | ||||||||||||
Interest expense: |
||||||||||||||||
Interest on long-term debt |
202 | 3,882 | 7,954 | 13,226 | ||||||||||||
Dividends on preferred stock subject to mandatory redemption |
50 | 50 | 200 | 200 | ||||||||||||
Total interest expense |
252 | 3,932 | 8,154 | 13,426 | ||||||||||||
Loss on early extinguishment of debt |
| | 15,916 | | ||||||||||||
Income (loss) before provision (benefit) for income taxes |
6,417 | (1,237 | ) | 5,699 | 314 | |||||||||||
Provision (benefit) for income taxes |
2,540 | (475 | ) | 2,108 | 337 | |||||||||||
Net income (loss) |
3,877 | (762 | ) | 3,591 | (23 | ) | ||||||||||
Accretion of Series B preferred stock |
| 508 | 765 | 1,950 | ||||||||||||
Net income (loss) available to common stockholders |
$ | 3,877 | $ | (1,270 | ) | $ | 2,826 | $ | (1,973 | ) | ||||||
Earnings (loss) per share available to common stockholders: |
||||||||||||||||
Basic |
$ | 0.13 | $ | (0.07 | ) | $ | 0.11 | $ | (0.11 | ) | ||||||
Diluted |
$ | 0.12 | $ | (0.07 | ) | $ | 0.11 | $ | (0.11 | ) | ||||||
Weighted average common stock outstanding: |
||||||||||||||||
Basic |
30,119 | 18,107 | 25,779 | 17,656 | ||||||||||||
Diluted |
31,066 | 18,107 | 26,777 | 17,656 | ||||||||||||
ROADRUNNER TRANSPORTATION SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share amounts)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share amounts)
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
ASSETS |
||||||||
CURRENT ASSETS: |
||||||||
Cash and cash equivalents |
$ | 996 | $ | 2,176 | ||||
Accounts receivable, net |
73,222 | 57,887 | ||||||
Deferred income taxes |
6,367 | 1,578 | ||||||
Prepaid expenses and other current assets |
10,414 | 8,501 | ||||||
Total current assets |
90,999 | 70,142 | ||||||
PROPERTY AND EQUIPMENT, NET |
6,894 | 7,518 | ||||||
OTHER ASSETS: |
||||||||
Goodwill |
246,888 | 244,671 | ||||||
Other noncurrent assets |
3,516 | 10,950 | ||||||
Total other assets |
250,404 | 255,621 | ||||||
TOTAL ASSETS |
$ | 348,297 | $ | 333,281 | ||||
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS INVESTMENT |
||||||||
CURRENT LIABILITIES: |
||||||||
Current maturities of long-term debt |
$ | | $ | 8,768 | ||||
Accounts payable |
37,241 | 31,184 | ||||||
Accrued expenses and other liabilities |
11,375 | 12,152 | ||||||
Total current liabilities |
48,616 | 52,104 | ||||||
LONG-TERM DEBT, net of current maturities |
20,500 | 130,167 | ||||||
OTHER LONG-TERM LIABILITIES |
8,492 | 4,627 | ||||||
PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION |
5,000 | 5,000 | ||||||
Total liabilities |
82,608 | 191,898 | ||||||
REDEEMABLE COMMON STOCK |
||||||||
Redeemable common stock $.01 par value; 259,800 shares issued and outstanding |
| 1,740 | ||||||
STOCKHOLDERS INVESTMENT: |
||||||||
Common stock $.01 par value; 100,000,000 shares authorized;
30,146,805 and 20,024,310 shares issued and outstanding |
301 | 200 | ||||||
Additional paid-in capital |
262,088 | 139,734 | ||||||
Retained earnings (deficit) |
3,300 | (291 | ) | |||||
Total stockholders investment |
265,689 | 139,643 | ||||||
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS INVESTMENT |
$ | 348,297 | $ | 333,281 | ||||
Contact
Roadrunner Transportation Systems, Inc.
Peter Armbruster
Chief Financial Officer
414-615-1648
ir@rrts.com
Peter Armbruster
Chief Financial Officer
414-615-1648
ir@rrts.com
Vollrath Associates, Inc.
Marilyn Vollrath
414-221-0210
Marilyn Vollrath
414-221-0210