Roadrunner Transportation Systems Reports 2012 Third Quarter Results and Announces Fourth Quarter 2012 Guidance

  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
ir@rrts.com
 
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