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8-K - FORM 8-K - Roadrunner Transportation Systems, Inc.c24108e8vk.htm
Exhibit 99.1
(ROADRUNNER LOGO)
FOR IMMEDIATE RELEASE
ROADRUNNER TRANSPORTATION SYSTEMS REPORTS
2011 THIRD QUARTER RESULTS
Cudahy, WI — November 2, 2011 — Roadrunner Transportation Systems, Inc. (NYSE: RRTS), a leading asset-light transportation and logistics services provider, today reported financial results for the three and nine months ended September 30, 2011.
Roadrunner’s summary financial results for the three and nine months ended September 30 are highlighted below. Third quarter diluted income per share available to common stockholders increased 64.3% over the prior year. Excluding acquisition transaction expenses of $0.6 million related to the August 2011 acquisition of Prime Logistics Corporation (“Prime”), diluted income per share would have been $0.24.
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
(In thousands, except per share data)   2011     2010     2011     2010 (1)  
 
                               
Total revenues
  $ 226,193     $ 163,690     $ 605,622     $ 466,222  
 
                       
 
                               
Net revenues (total revenues less purchased transportation costs)
  $ 60,672     $ 35,061     $ 153,336     $ 102,490  
Depreciation and amortization
    1,499       747       3,381       2,364  
Other operating expenses
    45,761       26,328       116,157       75,137  
Acquisition transaction expenses
    618       57       938       389  
IPO related expenses
                          1,500  
 
                       
Operating income
  $ 12,794     $ 7,929     $ 32,860     $ 23,100  
 
                       
 
                               
Net income (loss) available to common stockholders
  $ 7,175     $ 4,384     $ 19,006     $ (1,051 )
Weighted average diluted shares outstanding
    31,758       31,089       31,576       24,316  
Diluted income (loss) per share available to common stockholders
  $ 0.23     $ 0.14     $ 0.60     $ (0.04 )
     
(1)  
Results for the nine months ended September 30, 2010 include a one-time loss on early extinguishment of debt of $15.9 million and $1.5 million of expenses related to our initial public offering in May 2010.

 

 


 

2011 Third Quarter Results
In discussing third quarter performance, Mark DiBlasi, President and CEO of Roadrunner, said,
“Revenues increased 38.2% and net revenues expanded 73.1% from the prior year, resulting primarily from new customer growth, pricing initiatives, fuel increases, and the inclusion of the acquisitions of Morgan Southern and Prime. Our operating income growth of 61.4% outpaced revenue growth despite the effects of higher fuel prices on revenues and operating costs. Record third quarter revenue and operating income was achieved in all three operating segments.
“LTL revenues increased $19.0 million, or 17.7%, from the prior year as a result of new customer growth and expansion into new markets. This new customer growth and market expansion during the third quarter also drove a tonnage increase of 6.0% over the prior year. Tonnage growth was flat during July as a result of sluggish freight demand, but rebounded during August and September with increases in excess of 8.0%. Revenue per hundredweight increased 10.6% over the prior year, including 6.4% related to fuel. During the third quarter our LTL operating expenses increased $2.6 million over prior year primarily due to: (i) higher insurance costs, (ii) increased dock labor costs due to increased tonnage and (iii) expanded infrastructure costs to support our new business initiatives. Our LTL operating ratio improved to 94.8% in the third quarter from 95.2% in the prior year quarter but our third quarter operating ratio rose slightly from 94.4% in the second quarter of 2011. While our initiatives to penetrate new customers and expand into new geographic regions impacted our operating ratio in the quarter primarily as a result of building density in specific lanes, we expect these initiatives to improve our operating ratio and drive positive tonnage growth in future quarters.
“TL revenues grew by $40.2 million, or 102.9%, from the prior year. Revenues from Morgan Southern (acquired in early February), Bruenger Trucking (acquired at the end of May) and Prime (acquired at the end of August) accounted for $33.5 million of the increase, with the balance of $6.7 million representing organic growth of 17.1%. The impact of the acquisitions and operating leverage associated with our revenue growth led to nearly a three-fold increase in our TL operating income and an improvement in our TL operating ratio to 92.9% from 96.0% in the third quarter of 2010.
“For our TMS business, continued organic growth during the quarter generated a $3.7 million, or 20.6%, increase in revenues and a 33.6% increase in operating income from the prior year. This growth drove improvement in our TMS operating ratio to 89.0% from 90.0% in the prior year.”
2011 Third Quarter Segment Information
Roadrunner has three operating segments: less-than-truckload (LTL), truckload and logistics (TL) and transportation management solutions (TMS). The following highlights exclude intercompany eliminations and corporate expenses.
LTL revenues including fuel increased 17.7% to $126.2 million for the third quarter of 2011 from $107.2 million for the third quarter of 2010. LTL net revenues for the third quarter of 2011 were $29.6 million, or 23.4% of LTL revenues, compared to $25.6 million, or 23.9% of LTL revenues, for the third quarter of 2010. The decline in net revenue margin was a result of rising fuel prices and the impact of market expansion initiatives. LTL operating income was $6.5 million, or 5.2% of LTL revenues, for the third quarter of 2011 compared to $5.2 million, or 4.8% of revenues, for the third quarter of 2010.

 

 


 

Summary LTL operating statistics for the three and nine months ended September 30 are shown below.
                                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
                    %                     %  
    2011     2010     Change     2011     2010     Change  
 
                                               
Operating ratio
    94.8 %     95.2 %     (0.4 %)     94.5 %     94.3 %     0.3 %
Tonnage (in thousands of tons)
    337.2       318.1       6.0 %     949.5       917.6       3.5 %
Shipments (in thousands)
    512.5       481.9       6.3 %     1,434.5       1,373.8       4.4 %
Revenue per hundredweight (incl. fuel)
  $ 18.34     $ 16.58       10.6 %   $ 18.10     $ 16.36       10.6 %
Revenue per hundredweight (excl. fuel)
  $ 15.01     $ 14.41       4.2 %   $ 14.87     $ 14.18       4.9 %
Weight per shipment (lbs.)
    1,316       1,320       (0.3 %)     1,324       1,336       (0.9 %)
Linehaul cost per mile (excl. fuel)
  $ 1.25     $ 1.26       (0.8 %)   $ 1.24     $ 1.21       2.5 %
Note: Other than operating ratio, the statistics above do not include (i) adjustments for undelivered freight required for financial statement purposes in accordance with RRTS’ revenue recognition policy; and (ii) non-LTL related business captured within the LTL segment.
For the TL segment, revenues increased 102.9% to $79.3 million for the third quarter of 2011 from $39.1 million for the third quarter of 2010. The improvement was primarily due to increases in market pricing and load growth, the expansion of the company’s TL brokerage agent network, and the acquisitions of Morgan Southern, Bruenger Trucking and Prime. For the third quarter, Morgan Southern, Bruenger Trucking and Prime collectively contributed revenues of $33.5 million to the TL segment. Overall, TL net revenues for the third quarter of 2011 were $25.6 million, or 32.3% of TL revenues, compared to $4.5 million, or 11.6% of TL revenues, for the third quarter of 2010. TL operating income was $5.6 million, or 7.1% of TL revenues, for the third quarter of 2011 compared to $1.6 million, or 4.0% of revenues, for the third quarter of 2010.
For the TMS segment, revenues for the third quarter of 2011 increased 20.6% to $21.70 million from $18.0 million for the third quarter of 2010. TMS net revenues for the third quarter of 2011 were $5.4 million, or 25.1% of TMS revenues, compared to $5.0 million, or 27.6% of TMS revenues, for the third quarter of 2010. The improvement in TMS revenue growth during the quarter was primarily attributable to new and existing customer growth. The decline in net revenue margin was a result of rising fuel prices and increased carrier costs. TMS operating income was $2.4 million, or 11.0% of TMS revenues, for the third quarter of 2011, compared to $1.8 million, or 10.0% of TMS revenues, for the third quarter of 2010.
Conference Call
A conference call is scheduled for Wednesday, November 2, 2011 at 4:30 p.m. Eastern Time. To access the conference call, please dial 866-783-2140 (U.S.) or 857-350-1599 (International) approximately 10 minutes prior to the start of the call. Callers will be prompted for passcode 26717647. The conference call will also be available via live webcast under the Investor Relations section of the Company’s website, www.rrts.com.
If you are unable to listen to the live call, a replay will be available through November 9, 2011, and can be accessed by dialing 888-286-8010 (U.S.) or 617-801-6888 (International). Callers will be prompted for passcode 25619192. An archived version of the webcast will also be available under the Investor Relations section of the Company’s website, www.rrts.com.

 

 


 

About Roadrunner Transportation Systems, Inc.
Roadrunner is a leading asset-light transportation and logistics services provider offering a full suite of solutions, including customized and expedited less-than-truckload, truckload and logistics, transportation management solutions, intermodal solutions, and domestic and international air. For more information, please visit RRTS’ website, www.rrts.com.
Safe Harbor Statement
This release contains forward-looking statements that relate to future events or performance. These statements reflect the company’s 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 company’s 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 company’s 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 company’s most recent SEC filings.
(Tables Follow)

 

 


 

ROADRUNNER TRANSPORTATION SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2011     2010     2011     2010  
 
Revenues
  $ 226,193     $ 163,690     $ 605,622     $ 466,222  
Operating expenses:
                               
Purchased transportation costs
    165,521       128,629       452,286       363,732  
Personnel and related benefits
    23,598       15,826       61,656       45,514  
Other operating expenses
    22,163       10,502       54,501       29,623  
Depreciation and amortization
    1,499       747       3,381       2,364  
Acquisition transaction expenses
    618       57       938       389  
IPO related expenses
                      1,500  
 
                       
Total operating expenses
    213,399       155,761       572,762       443,122  
 
                       
 
                               
Operating income
    12,794       7,929       32,860       23,100  
 
                               
Interest expense:
                               
Interest on long-term debt
    1,172       504       2,056       7,752  
Dividends on preferred stock subject to mandatory redemption
    50       50       150       150  
 
                       
Total interest expense
    1,222       554       2,206       7,902  
 
                       
 
                               
Loss on early extinguishment of debt
                      15,916  
 
                       
 
                               
Income (loss) before (benefit) provision for income taxes
    11,572       7,375       30,654       (718 )
 
                               
Provision (benefit) for income taxes
    4,397       2,991       11,648       (432 )
 
                       
 
                               
Net income (loss)
    7,175       4,384       19,006       (286 )
 
                               
Accretion of Series B preferred stock
                      765  
 
                       
 
                               
Net income (loss) available to common stockholders
  $ 7,175     $ 4,384     $ 19,006     $ (1,051 )
 
                       
 
                               
Earnings (loss) per share available to common stockholders:
                               
Basic
  $ 0.23     $ 0.15     $ 0.63     $ (0.04 )
 
                       
Diluted
  $ 0.23     $ 0.14     $ 0.60     $ (0.04 )
 
                       
 
                               
Weighted average common stock outstanding:
                               
Basic
    30,562       30,052       30,340       24,316  
 
                       
Diluted
    31,758       31,089       31,576       24,316  
 
                       

 

 


 

ROADRUNNER TRANSPORTATION SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share amounts)
                 
    September 30,     December 31,  
    2011     2010  
ASSETS
               
CURRENT ASSETS:
               
Cash and cash equivalents
  $ 2,347     $ 996  
Accounts receivable, net
    107,581       73,222  
Deferred income taxes
    4,038       6,367  
Prepaid expenses and other current assets
    13,375       10,414  
 
           
Total current assets
    127,341       90,999  
 
           
 
               
PROPERTY AND EQUIPMENT, NET
    24,265       6,894  
 
               
OTHER ASSETS:
               
Goodwill
    368,698       246,888  
Other noncurrent assets
    12,110       3,516  
 
           
Total other assets
    380,808       250,404  
 
           
 
               
TOTAL ASSETS
  $ 532,414     $ 348,297  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
               
CURRENT LIABILITIES:
               
Current maturities of long-term debt
  $ 14,000     $  
Accounts payable
    52,220       37,241  
Accrued expenses and other liabilities
    23,997       11,375  
 
           
Total current liabilities
    90,217       48,616  
 
               
LONG-TERM DEBT, net of current maturities
    131,636       20,500  
OTHER LONG-TERM LIABILITIES
    16,628       8,492  
PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION
    5,000       5,000  
 
           
Total liabilities
    243,481       82,608  
 
           
 
               
STOCKHOLDERS’ INVESTMENT:
               
Common stock $.01 par value; 100,000 shares authorized; 30,705 and 30,147 shares issued and outstanding
    301       301  
Additional paid-in capital
    266,326       262,088  
Retained earnings
    22,306       3,300  
 
           
Total stockholders’ investment
    288,933       265,689  
 
           
 
               
TOTAL LIABILITIES AND STOCKHOLDERS’ INVESTMENT
  $ 532,414     $ 348,297  
 
           
Contact
Roadrunner Transportation Systems, Inc.
Peter Armbruster
Chief Financial Officer
414-615-1648
Vollrath Associates, Inc.
Marilyn Vollrath
414-221-0210
ir@rrts.com