FOR IMMEDIATE RELEASE
ROADRUNNER TRANSPORTATION SYSTEMS REPORTS
2013 THIRD QUARTER RESULTS AND ANNOUNCES
FOURTH QUARTER 2013 GUIDANCE
Cudahy, WI - 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 September 30, 2013.
Roadrunner's summary financial results for the three and nine months ended September 30 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 data) | | September 30, | | September 30, |
| | | 2013 | | 2012 | | 2013 | | 2012 |
| Total revenues | | $ | 363,156 |
| | $ | 279,165 |
| | $ | 994,444 |
| | $ | 778,284 |
|
| Net revenues (total revenues less purchased transportation costs) | | $ | 109,998 |
| | $ | 83,123 |
| | $ | 307,022 |
| | $ | 229,337 |
|
| Depreciation and amortization | | 4,029 |
| | 2,424 |
| | 11,230 |
| | 6,509 |
|
| Other operating expenses | | 81,749 |
| | 62,214 |
| | 227,747 |
| | 170,922 |
|
| Acquisition transaction expenses | | 561 |
| | 480 |
| | 851 |
| | 688 |
|
| Operating income | | $ | 23,659 |
| | $ | 18,005 |
| | $ | 67,194 |
| | $ | 51,218 |
|
| Net income available to common stockholders | | 13,230 |
| | 9,872 |
| | 37,782 |
| | 28,003 |
|
| Weighted average diluted shares outstanding | | 38,191 |
| | 32,260 |
| | 37,469 |
| | 32,220 |
|
| Diluted income per share available to common stockholders | | $ | 0.35 |
| | $ | 0.31 |
| | $ | 1.01 |
| | $ | 0.87 |
|
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 September 30 are shown below.
|
| | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2013 | | 2012 | | % Change | | 2013 | | 2012 | | % Change |
| Operating ratio | 92.4 |
| | 92.4 |
| | | | 92.5 |
| | 92.4 |
| | |
| Tonnage (in thousands of tons) | 406.3 |
| | 359.4 |
| | 13.0 | % | | 1,180.6 |
| | 1,013.7 |
| | 16.5 | % |
| Shipments (in thousands) | 628.5 |
| | 547.6 |
| | 14.8 | % | | 1,828.7 |
| | 1,550.1 |
| | 18.0 | % |
| Revenue per hundredweight (incl. fuel) | $ | 17.93 |
| | $ | 18.26 |
| | (1.8 | %) | | $ | 17.91 |
| | $ | 18.65 |
| | (4.0 | )% |
| Revenue per hundredweight (excl. fuel) | $ | 14.73 |
| | $ | 14.97 |
| | (1.6 | %) | | $ | 14.68 |
| | $ | 15.25 |
| | (3.7 | )% |
| Weight per shipment (lbs.) | 1,293 |
| | 1,313 |
| | (1.5 | %) | | 1,291 |
| | 1,308 |
| | (1.3 | %) |
| Linehaul cost per mile (excl. fuel) | $ | 1.23 |
| | $ | 1.24 |
| | (0.8 | %) | | $ | 1.23 |
| | $ | 1.24 |
| | (0.8 | )% |
| | | | | | | | | | | | |
| 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, October 30, 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 November 6, 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 transportation costs | 253,158 |
| | 196,042 |
| | 687,422 |
| | 548,947 |
|
| Personnel and related benefits | 39,816 |
| | 30,331 |
| | 111,342 |
| | 86,027 |
|
| Other operating expenses | 41,933 |
| | 31,883 |
| | 116,405 |
| | 84,895 |
|
| Depreciation and amortization | 4,029 |
| | 2,424 |
| | 11,230 |
| | 6,509 |
|
| Acquisition transaction expenses | 561 |
| | 480 |
| | 851 |
| | 688 |
|
| Total operating expenses | 339,497 |
| | 261,160 |
| | 927,250 |
| | 727,066 |
|
| Operating income | 23,659 |
| | 18,005 |
| | 67,194 |
| | 51,218 |
|
| Interest expense: | | | | | | | |
| Interest on long-term debt | 2,078 |
| | 1,943 |
| | 5,563 |
| | 5,812 |
|
| Dividends on preferred stock subject to mandatory redemption | — |
| | — |
| | — |
| | 49 |
|
| Total interest expense | 2,078 |
| | 1,943 |
| | 5,563 |
| | 5,861 |
|
| Income before provision for income taxes | 21,581 |
| | 16,062 |
| | 61,631 |
| | 45,357 |
|
| Provision for income taxes | 8,351 |
| | 6,190 |
| | 23,849 |
| | 17,354 |
|
| Net income available to common stockholders | $ | 13,230 |
| | $ | 9,872 |
| | $ | 37,782 |
| | $ | 28,003 |
|
| 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,
2013 | | December 31,
2012 |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | 8,757 |
| | $ | 11,908 |
|
| Accounts receivable, net of allowances of $2,403 and $1,476, respectively | 170,792 |
| | 122,947 |
|
| 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, respectively | 96,234 |
| | 68,576 |
|
| 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 and outstanding | 375 |
| | 344 |
|
| 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’ investment | $ | 854,241 |
| | $ | 700,808 |
|
Contact
Roadrunner Transportation Systems, Inc.
Peter Armbruster
Chief Financial Officer
414-615-1648
Vollrath Associates, Inc.
Marilyn Vollrath
414-221-0210
ir@rrts.com
