Roadrunner Transportation Systems Reports 2013 Third Quarter Results and Announces Fourth Quarter 2013 Guidance Business Wire CUDAHY, Wis. -- October 30, 2013 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, 2013. Roadrunner's summary financial results for the three and nine months ended September30 are highlighted below. Third quarter 2013 net income available to common stockholders increased 34.0% over the prior year quarter to $13.2 million. Third quarter diluted income per share available to common stockholders increased 12.9% over the prior year to $0.35. Excluding acquisition transaction expenses of $0.6 million related to the third quarter acquisitions of Marisol International, TA Drayage, G.W. Palmer Logistics, and Yes Trans, Inc., third quarter diluted income per share available to common stockholders was $0.36. Roadrunner's December 2012 and August 2013 stock offerings increased the weighted averaged diluted shares outstanding for the three months ended September 30, 2013 by 4.6 million shares and impacted diluted income per share by $0.05 from the prior year quarter. Three Months Ended Nine Months Ended (In thousands, except per share September 30, September 30, data) 2013 2012 2013 2012 Total revenues $ 363,156 $ 279,165 $ 994,444 $ 778,284 Net revenues (total revenues less purchased $ 109,998 $ 83,123 $ 307,022 $ 229,337 transportation costs) Depreciation and 4,029 2,424 11,230 6,509 amortization Other operating 81,749 62,214 227,747 170,922 expenses Acquisition 561 480 851 688 transaction expenses Operating income $ 23,659 $ 18,005 $ 67,194 $ 51,218 Net income available to common 13,230 9,872 37,782 28,003 stockholders Weighted average diluted shares 38,191 32,260 37,469 32,220 outstanding Diluted income per share available to $ 0.35 $ 0.31 $ 1.01 $ 0.87 common stockholders 2013 Third Quarter Results In discussing the company's third quarter performance, Mark DiBlasi, President and CEO of Roadrunner, said, “The combination of strong organic and acquisition-related revenue growth led to a 30.1% increase in third quarter revenues and a 32.3% increase in net revenues over the third quarter of 2012. For the 2013 third quarter, our operating income growth of 31.4% continued to outpace our revenue growth. Our operating ratio improved 10 basis points to 93.5% from 93.6% in the third quarter of 2012. “LTL revenues grew by $11.7 million, or 8.9%, from the prior year third quarter. Incremental revenues from our 2012 acquisition accounted for $3.1 million of the increase, with the remaining $8.6 million representing organic growth of 6.5%. Our organic growth during this year's third quarter was impacted by sluggish economic conditions in which many customers experienced a decline in shipments compared to last year's quarter. Our LTL operating ratio remained the same quarter-over-quarter at 92.4%. During the quarter, our LTL segment experienced $1.8 million of additional sequential costs related to an abnormal increase of insurance costs, temporary costs incurred to assist our recently opened service centers, and increased employee costs due to one more payroll day. The $1.8 million of increased costs were partially offset by a $1.7 million contingent purchase price adjustment. The addition of Expedited Freight Systems (EFS) in August 2012 and the implementation of certain performance initiatives resulted in a net revenue margin improvement from 27.7% in the third quarter of 2012 to 28.5% in the third quarter of 2013. “TL revenues grew by $45.9 million, or 36.9%, from the prior year third quarter. Incremental revenues from our 2012 and 2013 acquisitions accounted for $32.3 million of the increase, with the remaining $13.6 million representing organic growth of 11.0% from our existing business. Our TL operating ratio improved to 93.6% in the third quarter of 2013 from 94.1% in the third quarter of 2012. TL revenues and operating costs in this year's third quarter were also negatively affected by sluggish economic conditions, increased costs associated with hours of service rules and a flat pricing environment. During the quarter, our TL segment also experienced $1.3 million of additional sequential costs related to an abnormal increase in insurance costs, lost productivity in drayage and warehousing due to port strikes and customer order system changes, and increased employee costs due to one more payroll day. Offsetting these increased costs was a $1.6 million contingent purchase price adjustment related to two acquisitions, whose revised forecasted performance yields lower future earn-out payments. The positive impact of the acquisitions and operating leverage associated with our revenue growth led to a 48.1% increase in our TL operating income quarter-over-quarter. “TMS revenue grew $27.0 million, or 112.6%, in the third quarter of 2013 from the prior year quarter, primarily due to our 2013 acquisitions of Adrian Carriers and Marisol International. This growth led to a 68.8% increase in TMS operating income quarter-over-quarter." 2013 Fourth Quarter Guidance In commenting on guidance for the fourth quarter of 2013, Peter Armbruster, CFO of Roadrunner, said, “We anticipate our revenues for the fourth quarter to be in the range of $345 million to $370 million, representing an increase of 17% to 25% from the fourth quarter of 2012. We expect diluted income per share available to common stockholders to be between $0.31 and $0.35, compared to diluted income per share available to common stockholders of $0.29 in the prior year quarter. Our diluted per share guidance represents an increase of 7% to 21% from the fourth quarter of 2012 diluted income per share of $0.29 and reflects our December 2012 and August 2013 stock offerings, which will increase the weighted average diluted shares outstanding in the three months ending December 31, 2013 by approximately 2.8 million shares and will impact diluted income per share by $0.03 from the prior year period." 2013 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 8.9% to $144.2 million for the third quarter of 2013 from $132.5 million for the third quarter of 2012. LTL net revenues for the third quarter of 2013 were $41.1 million, or 28.5% of LTL revenues, compared to $36.7 million, or 27.7% of LTL revenues, for the third quarter of 2012. LTL operating income was $10.9 million, or 7.6% of LTL revenues, for the third quarter of 2013 compared to $10.0 million, or 7.6% of LTL revenues, for the third quarter of 2012. Summary LTL operating statistics for the three and nine months ended September30 are shown below. Three Months Ended September Nine Months Ended September 30, 30, 2013 2012 % 2013 2012 % Change Change Operating 92.4 92.4 92.5 92.4 ratio Tonnage (in thousands of 406.3 359.4 13.0 % 1,180.6 1,013.7 16.5 % tons) Shipments (in 628.5 547.6 14.8 % 1,828.7 1,550.1 18.0 % thousands) Revenue per hundredweight $ 17.93 $ 18.26 (1.8 %) $ 17.91 $ 18.65 (4.0 )% (incl. fuel) Revenue per hundredweight $ 14.73 $ 14.97 (1.6 %) $ 14.68 $ 15.25 (3.7 )% (excl. fuel) Weight per shipment 1,293 1,313 (1.5 %) 1,291 1,308 (1.3 %) (lbs.) Linehaul cost per mile $ 1.23 $ 1.24 (0.8 %) $ 1.23 $ 1.24 (0.8 )% (excl. fuel) 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 revenues increased 36.9% to $170.1 million for the third quarter of 2013 from $124.2 million for the third quarter of 2012. The improvement was primarily due to increased load growth, increased utilization of Roadrunner's TL brokerage agent network, and the acquisitions of R&M/Sortino, Central Cal, A&A, DCT, Wando Trucking, TA Drayage, G.W. Palmer Logistics, and Yes Trans, Inc. For the third quarter, these acquisitions collectively contributed incremental TL revenues of $41.4 million. Overall, TL net revenues for the third quarter of 2013 were $54.6 million, or 32.1% of TL revenues, compared to $39.6 million, or 31.9% of TL revenues, for the third quarter of 2012. TL operating income was $10.8 million, or 6.4% of TL revenues, for the third quarter of 2013 compared to $7.3 million, or 5.9% of TL revenues, for the third quarter of 2012. TMS revenues for the third quarter of 2013 increased 112.6% to $50.9 million from $24.0 million for the third quarter of 2012. The improvement in revenue was primarily due to the Adrian Carriers and Marisol International acquisitions. TMS net revenues for the third quarter of 2013 were $14.3 million, or 28.2% of TMS revenues, compared to $6.8 million, or 28.4% of TMS revenues, for the third quarter of 2012. TMS operating income was $4.6 million, or 9.1% of TMS revenues, for the third quarter of 2013, compared to $2.7 million, or 11.5% of TMS revenues, for the third quarter of 2012. Conference Call A conference call is scheduled for Wednesday, October30, 2013 at 4:30 p.m. Eastern Time. To access the conference call, please dial 877-703-6106 (U.S.) or 857-244-7305 (International) approximately 10 minutes prior to the start of the call. Callers will be prompted for passcode 41669066. 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 November6, 2013, and can be accessed by dialing 888-286-8010 (U.S.) or 617-801-6888 (International). Callers will be prompted for passcode 40018570. 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 (“LTL”), truckload logistics (“TL”), transportation management solutions (“TMS”), intermodal solutions, freight consolidation, inventory management, expedited services, international freight forwarding, customs brokerage, and comprehensive global supply chain solutions. For more information, please visit Roadrunner’s 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 organic and acquisition related growth; the impact of Roadrunner's December 2012 and August 2013 stock offerings; the impact of Roadrunner's acquisitions; and Roadrunner's expected revenues, diluted income per share available to common stockholders, net income available to common stockholders, and weighted average diluted shares outstanding for the fourth quarter of 2013. 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, 2013 2012 2013 2012 Revenues $ 363,156 $ 279,165 $ 994,444 $ 778,284 Operating expenses: Purchased 253,158 196,042 687,422 548,947 transportation costs Personnel and 39,816 30,331 111,342 86,027 related benefits Other operating 41,933 31,883 116,405 84,895 expenses Depreciation and 4,029 2,424 11,230 6,509 amortization Acquisition 561 480 851 688 transaction expenses Total operating 339,497 261,160 927,250 727,066 expenses Operating income 23,659 18,005 67,194 51,218 Interest expense: Interest on 2,078 1,943 5,563 5,812 long-term debt Dividends on preferred stock — — — 49 subject to mandatory redemption Total interest 2,078 1,943 5,563 5,861 expense Income before provision for income 21,581 16,062 61,631 45,357 taxes Provision for income 8,351 6,190 23,849 17,354 taxes Net income available to common $ 13,230 $ 9,872 $ 37,782 $ 28,003 stockholders Earnings per share available to common stockholders: Basic $ 0.36 $ 0.32 $ 1.06 $ 0.91 Diluted $ 0.35 $ 0.31 $ 1.01 $ 0.87 Weighted average common stock outstanding: Basic 36,407 30,859 35,666 30,808 Diluted 38,191 32,260 37,469 32,220 ROADRUNNER TRANSPORTATION SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) September 30, December 31, 2013 2012 ASSETS Current assets: Cash and cash equivalents $ 8,757 $ 11,908 Accounts receivable, net of allowances of 170,792 122,947 $2,403 and $1,476, respectively Deferred income taxes 2,774 3,800 Prepaid expenses and other current assets 23,525 26,461 Total current assets 205,848 165,116 Property and equipment, net of accumulated depreciation of $29,141 and $20,108, 96,234 68,576 respectively Other assets: Goodwill 515,862 442,143 Intangible assets, net 24,607 12,710 Other noncurrent assets 11,690 12,263 Total other assets 552,159 467,116 Total assets $ 854,241 $ 700,808 LIABILITIES AND STOCKHOLDERS’ INVESTMENT Current liabilities: Current maturities of long-term debt $ 9,844 $ 17,000 Accounts payable 68,184 54,887 Accrued expenses and other liabilities 29,908 29,132 Total current liabilities 107,936 101,019 Long-term debt, net of current maturities 195,969 144,500 Other long-term liabilities 62,591 63,210 Total liabilities 366,496 308,729 Stockholders’ investment: Common stock $.01 par value; 100,000 shares authorized; 37,480 and 34,371 shares issued 375 344 and outstanding Additional paid-in capital 382,887 325,034 Retained earnings 104,483 66,701 Total stockholders’ investment 487,745 392,079 Total liabilities and stockholders’ $ 854,241 $ 700,808 investment Contact: Roadrunner Transportation Systems, Inc. Peter Armbruster, 414-615-1648 Chief Financial Officer or Vollrath Associates, Inc. Marilyn Vollrath, 414-221-0210 firstname.lastname@example.org
Roadrunner Transportation Systems Reports 2013 Third Quarter Results and Announces Fourth Quarter 2013 Guidance
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