Roadrunner Transportation Systems Reports 2012 Third Quarter Results and Announces Fourth Quarter 2012 Guidance Business Wire CUDAHY, Wis. -- October 31, 2012 Roadrunner Transportation Systems, Inc. (NYSE: RRTS), a leading asset-light transportation and logistics service provider, today reported financial results for the three and nine months ended September30, 2012. Roadrunner's summary financial results for the three and nine months ended September30 are highlighted below. Third quarter diluted income per share available to common stockholders increased 34.8% over the prior year to $0.31. Excluding acquisition transaction expenses of $0.5 million related to the third quarter acquisitions of R&M Transportation (R&M), Sortino Transportation (Sortino) and Expedited Freight Systems, Inc. (EFS), diluted income per share would have been $0.32. Three Months Ended Nine Months Ended (In thousands, except September 30, September 30, per share data) 2012 2011 2012 2011 Total revenues $ 279,165 $ 226,193 $ 778,284 $ 605,622 Net revenues (total revenues less purchased $ 83,123 $ 60,672 $ 229,337 $ 153,336 transportation costs) Depreciation and 2,424 1,499 6,509 3,381 amortization Other operating expenses 62,214 45,761 170,922 116,157 Acquisition transaction 480 618 688 938 expenses Operating income $ 18,005 $ 12,794 $ 51,218 $ 32,860 Net income available to 9,872 7,175 28,003 19,006 common stockholders Weighted average diluted 32,260 31,758 32,220 31,576 shares outstanding Diluted income per share available to common $ 0.31 $ 0.23 $ 0.87 $ 0.60 stockholders 2012 Third Quarter Results In discussing the company's third quarter performance, Mark DiBlasi, President and CEO of Roadrunner, said, “Strong performance across all of our business segments generated third quarter revenue growth of 23.4% and net revenue growth of 37.0%. Due to sales and operational initiatives, our operating income growth of 40.7% outpaced revenue. Our operating ratio improved 70 basis points to 93.6% from 94.3% in the third quarter of 2011 despite the inclusion of third quarter acquisition transaction expenses and an abnormal $1.7 million sequential increase in the LTL and TL third quarter insurance costs from the second quarter of 2012, which impacted diluted earnings per share by $0.04. “Our LTL operating ratio improved to 92.4% in the third quarter from 94.8% in the third quarter of 2011. Our continued initiatives to expand into new geographic regions, build density, improve pricing and enhance productivity, as well as the addition of EFS, resulted in a net revenue margin improvement from 23.4% in the third quarter of 2011 to 27.7% in the third quarter of 2012. While incurring integration costs associated with the consolidation of certain EFS operations on a non-recurring basis, we were still able to show substantial improvement over last year in our LTL operating ratio. “TL revenues grew by $44.9 million, or 56.6%, from the prior year. Incremental revenues from our 2011 and 2012 acquisitions accounted for $31.9 million of the increase, with the balance of $13.0 million representing organic growth of 16.4%. The positive impact of the acquisitions and operating leverage associated with our revenue growth led to a 29.6% increase in our TL operating income. Our TL operating ratio of 94.1% was impacted by an abnormal $1.3 million sequential increase in third quarter insurance costs from the second quarter of 2012. Excluding the increased TL insurance costs, the TL operating ratio would have been 93.1%. “TMS revenue grew $2.2 million, or 10.4%, from the prior year. Organic growth and pricing accounted for $0.6 million of the increase, with the balance related to our late February 2012 acquisition of Capital Transportation Logistics. The operating leverage associated with this growth led to a 14.7% increase in TMS operating income. Our TMS operating ratio improved to 88.5% from 89.0% in the third quarter of 2011.” 2012 Fourth Quarter Guidance In commenting on guidance for the fourth quarter of 2012, Peter Armbruster, CFO of Roadrunner, said, “We anticipate our revenues for the fourth quarter to be in the range of $275 million to $290 million, representing an increase of 16% to 22% from the fourth quarter of 2011. Further, we expect diluted income per share available to common stockholders to be between $0.27 and $0.31, compared to diluted income per share available to common stockholders of $0.22 in the prior year quarter. Our guidance range considers the uncertain economic conditions and the potential effects of the severe weather situation on the East Coast.” 2012 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 4.9% to $132.5 million for the third quarter of 2012 from $126.2 million for the third quarter of 2011. On a per day basis, for the third quarter of 2012, LTL revenues improved 6.6% and LTL tonnage improved 8.3% over the third quarter of 2011. LTL revenue per hundredweight, excluding EFS shipments, was up 4.1% including fuel and 4.3% excluding fuel in the third quarter of 2012. LTL net revenues for the third quarter of 2012 were $36.7 million, or 27.7% of LTL revenues, compared to $29.6 million, or 23.4% of LTL revenues, for the third quarter of 2011. LTL operating income was $10.0 million, or 7.6% of LTL revenues, for the third quarter of 2012 compared to $6.5 million, or 5.2% of LTL revenues, for the third quarter of 2011. Summary LTL operating statistics for the three and nine months ended September30 are shown below. Three Months Ended September 30, Nine Months Ended September 30, % % Change Change 2012 2011 % Per 2012 2011 % Per Change Day Change Day Operating 92.4 94.8 92.4 94.5 ratio Tonnage (in thousands of 359.4 337.2 6.6 % 8.3 % 1,013.7 949.5 6.8 % 7.3 % tons) Shipments (in 547.6 512.5 6.8 % 8.5 % 1,550.1 1,434.5 8.1 % 8.6 % thousands) Revenue per hundredweight $ 18.26 $ 18.34 (0.4 %) $ 18.65 $ 18.10 3.0 % (incl. fuel) Revenue per hundredweight $ 14.97 $ 15.01 (0.3 %) $ 15.25 $ 14.87 2.6 % (excl. fuel) Weight per shipment 1,313 1,316 (0.2 %) 1,308 1,324 (1.2 %) (lbs.) Linehaul cost per mile $ 1.24 $ 1.25 (0.8 %) $ 1.24 $ 1.24 0.0 % (excl. fuel) Operating 63 64 191 192 Days Note: Other than operating ratio, the statistics above do not include (i) adjustments for undelivered freight required for financial statement purposes in accordance with Roadrunner's revenue recognition policy; and (ii) non-LTL related business captured within the LTL segment. Operating statistics include EFS beginning as of the date of acquisition, August 10, 2012. TL segment revenues increased 56.6% to $124.2 million for the third quarter of 2012 from $79.3 million for the third quarter of 2011. The improvement was primarily due to increases in market pricing and load growth, increased utilization of Roadrunner's TL brokerage agent network, and the acquisitions of Prime Logistics, D&E Transport, CTW Transport, R&M and Sortino. For the third quarter, Prime Logistics, D&E Transport, CTW Transport, R&M and Sortino collectively contributed incremental revenues of $31.9 million to the TL segment. Overall, TL net revenues for the third quarter of 2012 were $39.6 million, or 31.9% of TL revenues, compared to $25.6 million, or 32.3% of TL revenues, for the third quarter of 2011. TL operating income was $7.3 million, or 5.9% of TL revenues, for the third quarter of 2012 compared to $5.6 million, or 7.1% of TL revenues, for the third quarter of 2011. TMS segment revenues for the third quarter of 2012 increased 10.4% to $24.0 million from $21.7 million for the third quarter of 2011. TMS net revenues for the third quarter of 2012 were $6.8 million, or 28.4% of TMS revenues, compared to $5.4 million, or 25.1% of TMS revenues, for the third quarter of 2011. TMS revenue growth during the quarter was primarily attributable to new and existing customer growth and the acquisition of Capital Transportation Logistics. For the third quarter, Capital Transportation Logistics contributed revenue of $1.6 million to the TMS segment. TMS operating income was $2.7 million, or 11.5% of TMS revenues, for the third quarter of 2012, compared to $2.4 million, or 11.0% of TMS revenues, for the third quarter of 2011. Conference Call A conference call is scheduled for Wednesday, October31, 2012 at 4:30 p.m. Eastern Time. To access the conference call, please dial 866-277-1181 (U.S.) or 617-597-5358 (International) approximately 10 minutes prior to the start of the call. Callers will be prompted for passcode 68866964. The conference call will also be available via live webcast under the Investor Relations section of Roadrunner's website, www.rrts.com. If you are unable to listen to the live call, a replay will be available through November7, 2012, and can be accessed by dialing 888-286-8010 (U.S.) or 617-801-6888 (International). Callers will be prompted for passcode 83237201. An archived version of the webcast will also be available under the Investor Relations section of Roadrunner's website, www.rrts.com. About Roadrunner Transportation Systems, Inc. Roadrunner is a leading asset-light transportation and logistics service 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, including statements regarding Roadrunner's performance, Roadrunner's sales and operational initiatives, Roadrunner's initiatives to expand into new geographic regions, build density, improve pricing and enhance productivity, Roadrunner's acquisitions, and Roadrunner's expected revenues and diluted earnings per share available to common stockholders for the fourth quarter of 2012. These statements reflect Roadrunner's current expectations, and Roadrunner 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 Roadrunner'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, Roadrunner'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, insurance in excess of prior experience levels, and other "Risk Factors" set forth in Roadrunner'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, 2012 2011 2012 2011 Revenues $ 279,165 $ 226,193 $ 778,284 $ 605,622 Operating expenses: Purchased transportation 196,042 165,521 548,947 452,286 costs Personnel and related 30,331 23,598 86,027 61,656 benefits Other operating expenses 31,883 22,163 84,895 54,501 Depreciation and 2,424 1,499 6,509 3,381 amortization Acquisition transaction 480 618 688 938 expenses Total operating expenses 261,160 213,399 727,066 572,762 Operating income 18,005 12,794 51,218 32,860 Interest expense: Interest on long-term 1,943 1,172 5,812 2,056 debt Dividends on preferred stock subject to — 50 49 150 mandatory redemption Total interest expense 1,943 1,222 5,861 2,206 Income before provision 16,062 11,572 45,357 30,654 for income taxes Provision for income 6,190 4,397 17,354 11,648 taxes Net income available to $ 9,872 $ 7,175 $ 28,003 $ 19,006 common stockholders Earnings per share available to common stockholders: Basic $ 0.32 $ 0.23 $ 0.91 $ 0.63 Diluted $ 0.31 $ 0.23 $ 0.87 $ 0.60 Weighted average common stock outstanding: Basic 30,859 30,562 30,808 30,340 Diluted 32,260 31,758 32,220 31,576 ROADRUNNER TRANSPORTATION SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) September 30, December 31, 2012 2011 ASSETS Current assets: Cash and cash equivalents $ 2,322 $ 3,315 Accounts receivable, net of allowances of 131,520 102,358 $1,400 and $1,461, respectively Deferred income taxes 4,998 9,497 Prepaid expenses and other current assets 22,133 16,400 Total current assets 160,973 131,570 Property and equipment, net of accumulated depreciation of $17,864 and $13,303, 47,829 28,447 respectively Other assets: Goodwill 415,954 364,687 Intangible assets, net 13,080 10,381 Other noncurrent assets 12,710 8,633 Total other assets 441,744 383,701 Total assets $ 650,546 $ 543,718 LIABILITIES AND STOCKHOLDERS’ INVESTMENT Current liabilities: Current maturities of long-term debt $ 17,000 $ 14,000 Accounts payable 58,046 50,245 Accrued expenses and other liabilities 31,591 19,480 Preferred stock subject to mandatory redemption — 5,000 Total current liabilities 106,637 88,725 Long-term debt, net of current maturities 176,145 122,500 Other long-term liabilities 42,492 36,540 Total liabilities 325,274 247,765 Stockholders’ investment: Common stock $.01 par value; 100,000 shares authorized; 30,956 and 30,707 shares issued and 310 307 outstanding Additional paid-in capital 267,788 266,475 Retained earnings 57,174 29,171 Total stockholders’ investment 325,272 295,953 Total liabilities and stockholders’ investment $ 650,546 $ 543,718 Contact: Roadrunner Transportation Systems, Inc. Peter Armbruster Chief Financial Officer 414-615-1648 or Vollrath Associates, Inc. Marilyn Vollrath 414-221-0210 firstname.lastname@example.org
Roadrunner Transportation Systems Reports 2012 Third Quarter Results and Announces Fourth Quarter 2012 Guidance
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