Roadrunner Transportation Systems Reports 2013 Fourth Quarter and Year-End Results and Announces First Quarter 2014 Guidance

  Roadrunner Transportation Systems Reports 2013 Fourth Quarter and Year-End
  Results and Announces First Quarter 2014 Guidance

Business Wire

CUDAHY, Wis. -- February 5, 2014

Roadrunner Transportation Systems, Inc. (NYSE: RRTS), a leading asset-light
transportation and logistics service provider, today reported financial
results for the three and twelve months ended December31, 2013.

Roadrunner's summary financial results for the three and twelve months ended
December31 are highlighted below. Fourth quarter 2013 net income available to
common stockholders increased 17.7% over the prior year quarter to $11.2
million. Fourth quarter diluted income per share available to common
stockholders was $0.29, equal to the prior year.

Roadrunner's December 2012 and August 2013 stock offerings increased the
weighted averaged diluted shares outstanding for the three months ended
December31, 2013 by 4.6 million shares and impacted diluted income per share
by $0.04 from the prior year quarter.

                                              
                     Three Months Ended            Year Ended
(In thousands,
except per share     December 31,                  December 31,
data)
                     2013         2012            2013           2012
Total revenues       $ 366,967    $ 295,069      $ 1,361,410    $ 1,073,354
Net revenues
(total revenues
less purchased       $ 110,113     $ 90,558        $ 417,135       $ 319,895
transportation
costs)
Depreciation and     5,081         2,990           16,311          9,499
amortization
Other operating      86,863        69,751          314,610         240,673
expenses
Acquisition
transaction          —            85             851            773
expenses
Operating income     $ 18,169     $ 17,732       $ 85,363       $ 68,950
Net income
available to         11,214        9,527           48,996          37,530
common
stockholders
Weighted average
diluted shares       39,152        33,101          37,913          32,425
outstanding
Diluted income
per share
available to         $ 0.29        $ 0.29          $ 1.29          $ 1.16
common
stockholders
                                                                     

2013 Fourth Quarter Results

In discussing the company's fourth quarter performance, Mark DiBlasi,
President and CEO of Roadrunner, said,

“Although strong organic and acquisition-related revenue growth led to a 24.4%
increase in 2013 fourth quarter revenues and a 21.6% increase in 2013 fourth
quarter net revenues over the fourth quarter of 2012, our lower than expected
diluted income per share in the fourth quarter of 2013 resulted primarily from
the following major factors that affected all of our segments. We experienced
unfavorable claims developments during the fourth quarter of 2013, primarily
related to increased accidents involving claims, accelerating costs on settled
claims and, correspondingly, increased reserves on new claims. This resulted
in insurance and claims expense that was approximately $3.8 million greater
than the prior year quarter, causing a $0.06 impact on diluted income per
share. Although our recently opened LTL terminals continued to perform well
during the fourth quarter of 2013 and contributed to most of our LTL revenue
growth during the quarter, these terminals have a lower freight density and
net revenue margin as compared with our legacy terminals. Additional costs
incurred in our LTL segment due to lower freight density negatively impacted
our fourth quarter diluted income per share by approximately $0.02. Final
valuations of definite-lived intangible assets related to our 2013
acquisitions of Marisol International and Adrian Carriers increased
amortization expense by approximately $0.5 million, which negatively impacted
our 2013 fourth quarter diluted income per share by $0.01. Our freight
consolidation business had startup costs related to a significant new customer
award that continued beyond the normal startup period and additional costs
incurred due to a third party customer order system issue. The additional
costs within our freight consolidation business negatively impacted our fourth
quarter diluted income per share by $0.01. Lastly, external factors such as
the severe weather experienced throughout the United States during the month
of December and compliance with new hours of service rules impacted revenue
growth and operational efficiencies across all of our segments, which
negatively impacted our 2013 fourth quarter diluted income per share by $0.02.
During the fourth quarter of 2013, the above noted factors were partially
offset by net contingent earnout adjustments of $2.6 million related to prior
acquisitions and a reduction in our effective tax rate from 38.8% for the
fourth quarter of 2012 to 29.2% for the fourth quarter 2013 due to a permanent
tax benefit related to contingent earnout adjustments.

“LTL revenues grew by $5.7 million, or 4.4%, during the fourth quarter of 2013
from the prior year fourth quarter. Our LTL revenue growth over the prior year
quarter was almost entirely attributable to our recently opened terminals. The
revenue growth throughout our entire LTL network was negatively impacted by
the severe weather experienced throughout the United States during the month
of December. Our net revenue margin decreased from 28.1% in the fourth quarter
of 2012 to 27.7% in the fourth quarter of 2013. This decline resulted
primarily from the lower net revenue margin at our recently opened LTL
terminals and load inefficiencies due to the December weather impacts noted
above. We also incurred $2.3 million of additional expense in our LTL segment
related to increased insurance claims and redundant dock costs related to new
terminal freight. Until our recently opened LTL terminals can build sufficient
density to send loads direct to the final destination, the new terminal loads
will be combined with our legacy terminal loads resulting in double handling
and redundant dock costs. These issues resulted in our LTL operating ratio
deteriorating from 94.9% in the fourth quarter of 2012 to a 96.1% in the
fourth quarter of 2013. We expect our organizational restructuring announced
in late December and our continued efforts to upgrade our sales and
safety/risk management personnel will drive LTL performance improvements from
the fourth quarter 2013 level.

“TL revenues grew by $36.7 million, or 25.6%, during the fourth quarter of
2013 from the prior year fourth quarter. Incremental revenues from our 2013
acquisitions accounted for $23.1 million of the increase, with the remaining
$13.7 million representing 9.5% organic growth. Our fourth quarter revenues
and operating costs in our TL segment were negatively affected by severe
weather experienced throughout the United States during the month of December,
sluggish economic conditions, increased costs associated with hours of service
rules and a flat pricing environment. During the quarter, we also incurred
$2.4 million of additional expense in our TL segment related to increased
insurance claims, continuing startup costs related to a significant new
business award, and a third party customer order system issue. These increased
expenses were offset by a $1.5 million net contingent purchase price
adjustment related to prior TL acquisitions, whose revised forecasted
performance yields lower future earn-out payments. Our TL operating ratio
deteriorated from 92.8% in the fourth quarter of 2012 to 93.6% in the fourth
quarter of 2013 primarily due to the issues outlined above, as well as the
addition of key management personnel to execute our growth strategy, and a
greater percentage of our TL revenue growth in truckload services and drayage,
which have lower operating margins than our warehousing business. However, the
positive impact of our recent TL acquisitions and organic revenue growth led
to a 12.3% increase in TL operating income quarter-over-quarter.

“TMS revenue grew by $30.9 million, or 130.0% during the fourth quarter of
2013 from the prior year fourth quarter, primarily as a result of our 2013 TMS
acquisitions of Adrian Carriers and Marisol International. This growth led to
a 35.9% increase in TMS operating income quarter-over-quarter. Final
valuations of definite-lived intangible assets related to our acquisitions of
Marisol International and Adrian Carriers resulted in increased amortization
expense of approximately $0.5 million sequentially from the third quarter 2013
to the fourth quarter 2013.

"Our consolidated revenue increased 26.8% to $1,361.4 million in fiscal 2013
from $1,073.4 million in fiscal 2012. This revenue growth was a combination of
both organic- and acquisition related growth. Our consolidated operating
income increased 23.8% to $85.4 million in fiscal 2013 from $69.0 million in
fiscal 2012. Our consolidated net income available to common stockholders
increased 30.6% to $49.0 million in fiscal 2013 from $37.5 million in fiscal
2012. Our diluted income per share available to common stockholders increased
11.2% to $1.29 in fiscal 2013 from $1.16 in fiscal 2012. Our December 2012 and
August 2013 stock offerings increased the weighted average diluted shares
outstanding for the year ended December31, 2013 by 4.3 million shares and
impacted diluted income per share by $0.16 from the prior year."

2014 First Quarter Guidance

Commenting on guidance for the first quarter of 2014, Peter Armbruster, CFO of
Roadrunner, said, “We anticipate our revenues for the first quarter to be in
the range of $350 million to $375 million, representing an increase of 17% to
25% from the first quarter of 2013. We expect diluted income per share
available to common stockholders to be between $0.27 and $0.30, compared to
diluted income per share available to common stockholders of $0.29 in the
prior year quarter. Our diluted per share guidance range reflects
approximately $0.02 for effects of severe weather experienced in January 2014
throughout the United States. In addition, the guidance reflects the expected
headwinds associated with building density in our recently opened LTL
terminals and increased insurance costs. The guidance also reflects our August
2013 stock offering, which will increase the weighted average diluted shares
outstanding in the three months ending March 31, 2014 by approximately 1.5
million shares and will impact diluted income per share by $0.01 from the
prior year period."

2013 Fourth Quarter Segment Information

Roadrunner has three operating segments: less-than-truckload (LTL), truckload
logistics (TL), and transportation management solutions (TMS). The following
highlights exclude intercompany eliminations and corporate expenses.

LTL revenues, including fuel, increased 4.4% to $135.5 million for the fourth
quarter of 2013 from $129.9 million for the fourth quarter of 2012. LTL net
revenues for the fourth quarter of 2013 were $37.5 million, or 27.7% of LTL
revenues, compared with $36.4 million, or 28.1% of LTL revenues, for the
fourth quarter of 2012. LTL operating income was $5.2 million, or 3.9% of LTL
revenues, for the fourth quarter of 2013 compared with $6.6 million, or 5.1%
of LTL revenues, for the fourth quarter of 2012.

Summary LTL operating statistics for the three and twelve months ended
December31, 2013 and 2012 are shown below.

                                             
                  Three Months Ended December     Twelve Months Ended December
                  31,                             31,
                                                  
                  2013     2012     %           2013     2012      %
                                      Change                            Change
Operating         96.1      94.9                  93.4      93.1    
ratio
Tonnage (in
thousands of      373.1     354.3     5.3  %      1,553.7   1,368.0     13.6 %
tons)
Shipments (in     576.1     540.4     6.6  %      2,404.8   2,090.4     15.0 %
thousands)
Revenue per
hundredweight     $ 17.97   $ 17.92   0.3  %      $ 17.93   $ 18.46     (2.9 )%
(incl. fuel)
Revenue per
hundredweight     $ 14.82   $ 14.61   1.4  %      $ 14.72   $ 15.08     (2.4 )%
(excl. fuel)
Weight per
shipment          1,295     1,311     (1.2 %)     1,292     1,309       (1.3 %)
(lbs.)
Linehaul cost
per mile          $ 1.24    $ 1.24    0.0  %      $ 1.24    $ 1.24      0.0  %
(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 25.6% to $180.1 million for the fourth quarter of 2013
from $143.4 million for the fourth 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 Central Cal, A&A, DCT,
Wando Trucking, TA Drayage, G.W. Palmer Logistics, and Yes Trans. For the
fourth quarter of 2013, these acquisitions collectively contributed TL
revenues of $31.6 million. Overall, TL net revenues for the fourth quarter of
2013 were $57.3 million, or 31.8% of TL revenues, compared with $47.2 million,
or 32.9% of TL revenues, for the fourth quarter of 2012. TL operating income
was $11.5 million, or 6.4% of TL revenues, for the fourth quarter of 2013
compared with $10.3 million, or 7.2% of TL revenues, for the fourth quarter of
2012.

TMS revenues for the fourth quarter of 2013 increased 130.0% to $54.7 million
from $23.8 million for the fourth quarter of 2012. The improvement in revenue
was primarily due to the Adrian Carriers and Marisol International
acquisitions. TMS net revenues for the fourth quarter of 2013 were $15.3
million, or 28.0% of TMS revenues, compared with $6.9 million, or 29.1% of TMS
revenues, for the fourth quarter of 2012. TMS operating income was $3.8
million, or 7.0% of TMS revenues, for the fourth quarter of 2013, compared
with $2.8 million, or 11.8% of TMS revenues, for the fourth quarter of 2012.

Conference Call

A conference call is scheduled for Wednesday, February5, 2014 at 4:30 p.m.
Eastern Time. To access the conference call, please dial 877-280-4957 (U.S.)
or 857-244-7314 (International) approximately 10 minutes prior to the start of
the call. Callers will be prompted for passcode 38041669. 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 Wednesday, February12, 2014, and can be accessed by dialing
888-286-8010 (U.S.) or 617-801-6888 (International). Callers will be prompted
for passcode 92333888. 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; Roadrunner’s
expectation that its organizational restructuring and continued efforts to
upgrade its sales and safety/risk management personnel will drive LTL
performance improvements from the fourth quarter 2013 level; the impact of
Roadrunner's acquisitions; 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 first
quarter of 2014; the impact of severe weather experienced in January 2014
throughout the United States; and the expected headwinds associated with
building density in Roadrunner’s recently opened LTL terminals and increased
insurance costs. 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          Year Ended
                     December 31,                  December 31,
                     2013         2012            2013           2012
Revenues             $ 366,967     $ 295,069       $ 1,361,410     $ 1,073,354
Operating
expenses:
Purchased
transportation       256,854       204,511         944,275         753,459
costs
Personnel and        39,816        33,928          151,158         119,955
related benefits
Other operating      47,047        35,823          163,452         120,718
expenses
Depreciation and     5,081         2,990           16,311          9,499
amortization
Acquisition
transaction          —            85             851            773
expenses
Total operating      348,798      277,337        1,276,047      1,004,404
expenses
Operating income     18,169        17,732          85,363          68,950
Interest
expense:
Interest on          2,320         2,169           7,883           7,981
long-term debt
Dividends on
preferred stock
subject to           —            —              —              49
mandatory
redemption
Total interest       2,320        2,169          7,883          8,030
expense
Income before
provision for        15,849        15,563          77,480          60,920
income taxes
Provision for        4,635        6,036          28,484         23,390
income taxes
Net income
available to         $ 11,214     $ 9,527        $ 48,996       $ 37,530
common
stockholders
Earnings per
share available
to common
stockholders:
Basic                $ 0.30       $ 0.30         $ 1.36         $ 1.21
Diluted              $ 0.29       $ 0.29         $ 1.29         $ 1.16
Weighted average
common stock
outstanding:
Basic                37,518       31,732         36,133         31,040
Diluted              39,152       33,101         37,913         32,425
                                                                   

ROADRUNNER TRANSPORTATION SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)

                                               December 31,   December 31,
                                                 2013             2012
ASSETS
Current assets:
Cash and cash equivalents                        $  5,438         $   11,908
Accounts receivable, net of allowances of        171,165          122,947
$2,722 and $1,476, respectively
Deferred income taxes                            848              3,800
Prepaid expenses and other current assets        34,865          26,461
Total current assets                             212,316         165,116
Property and equipment, net of accumulated
depreciation of $30,869 and $20,108,             96,558           68,576
respectively
Other assets:
Goodwill                                         512,157          442,143
Intangible assets, net                           30,363           12,710
Other noncurrent assets                          11,756          12,263
Total other assets                               554,276         467,116
Total assets                                     $  863,150      $   700,808
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
Current maturities of long-term debt             $  10,938        $   17,000
Accounts payable                                 67,141           54,887
Accrued expenses and other liabilities           35,666          29,132
Total current liabilities                        113,745         101,019
Long-term debt, net of current maturities        181,702          144,500
Other long-term liabilities                      67,338          63,210
Total liabilities                                362,785         308,729
Stockholders’ investment:
Common stock $.01 par value; 100,000 shares
authorized; 37,564 and 34,371 shares issued      376              344
and outstanding
Additional paid-in capital                       384,292          325,034
Retained earnings                                115,697         66,701
Total stockholders’ investment                   500,365         392,079
Total liabilities and stockholders’              $  863,150      $   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
ir@rrts.com
 
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