SOURCE: Roadrunner Transportation Systems

Roadrunner Transportation Systems

February 08, 2012 16:05 ET

Roadrunner Transportation Systems Reports 2011 Fourth Quarter and Year-End Results and Announces First Quarter 2012 Guidance

CUDAHY, WI--(Marketwire - Feb 8, 2012) - Roadrunner Transportation Systems, Inc. (NYSE: RRTS), a leading asset-light transportation and logistics services provider, today reported financial results for the three months and year ended December 31, 2011.

Roadrunner's summary financial results for the three months and year ended December 31 are highlighted below. Fourth quarter diluted income per share available to common stockholders increased 83.3% over the prior year to $0.22. Excluding acquisition transaction expenses of $0.4 million related to a non-recurring acquisition earnout, diluted income per share available to common stockholders would have been $0.23.

Three Months Ended Year Ended
December 31, December 31,
(In thousands, except per share data) 2011 2010 2011 2010 (1)
Total revenues $ 238,005 $ 165,796 $ 843,627 $ 632,018
Net revenues (total revenues less purchased transportation costs) $ 69,948 $ 35,483 $ 223,284 $ 137,973
Depreciation and amortization 1,597 750 4,978 3,114
Other operating expenses 54,646 27,884 170,803 103,021
Acquisition transaction expenses 430 180 1,368 569
IPO related expenses - - - 1,500
Operating income $ 13,275 $ 6,669 $ 46,135 $ 29,769
Net income available to common stockholders $ 6,865 $ 3,877 $ 25,871 $ 2,826
Weighted average diluted shares outstanding 31,765 31,066 31,545 26,777
Diluted income per share available to common stockholders $ 0.22 $ 0.12 $ 0.82 $ 0.11

(1) Results for the year ended December 31, 2010 include a one-time loss on early extinguishment of debt of $15.9 million and $1.5 million of expenses related to the company's initial public offering in May 2010.

2011 Fourth Quarter Results

In discussing fourth quarter performance, Mark DiBlasi, President and CEO of Roadrunner, said,

"Revenues increased 43.6% and net revenues expanded 97.1% from the prior year, resulting primarily from new customer growth, pricing initiatives, fuel increases, and the inclusion of the acquisitions of Morgan Southern and Prime Logistics. Our operating income growth of 99.1% outpaced revenue growth, despite the effects of higher fuel prices on revenues and operating costs. Revenues and operating income for the fourth quarter of 2011 represented the best quarter in the history of the company.

"LTL revenues increased $13.5 million, or 12.8%, from the prior year as a result of new customer growth and expansion into new markets. This new customer growth and market expansion during the fourth quarter also drove a per-day tonnage increase of 8.5% over the prior year. Per day tonnage growth over the prior year averaged 7.8% in October and November and increased to 9.9% in December. Revenue per hundredweight increased 7.9% over the prior year, including 5.2% related to fuel. During the fourth quarter, our LTL operating expenses increased $2.6 million over prior year, primarily due to (i) higher insurance costs, (ii) increased dock labor costs due to increased tonnage and (iii) expanded infrastructure costs to support our new business initiatives. Our LTL operating ratio improved to 95.5% in the fourth quarter from 96.0% in the prior year quarter. Our continued initiatives to penetrate new customers, expand into new geographic regions and build density resulted in a net revenue margin improvement from 23.4% in the third quarter of 2011 to 24.8% in the fourth quarter of 2011. We expect these continued initiatives to improve our operating ratio and drive positive tonnage growth in future quarters.

"TL revenues grew by $54.9 million, or 125.2%, from the prior year. Revenues from Morgan Southern (acquired in early February), Bruenger Trucking (acquired at the end of May) and Prime Logistics (acquired at the end of August) accounted for $50.2 million of the increase, with the balance of $4.7 million representing organic growth of 10.6%. The impact of the acquisitions and operating leverage associated with our revenue growth led to a four-fold increase in our TL operating income and an improvement in our TL operating ratio to 92.2% from 95.7% in the fourth quarter of 2010.

"For our TMS business, continued organic growth during the quarter generated a $4.3 million, or 24.3%, increase in revenues and a 75.6% increase in operating income from the prior year. This growth drove improvement in our TMS operating ratio to 90.1% from 93.0% in the prior year."

Also commenting on the quarter, Peter Armbruster, Chief Financial Officer, said, "Strong cash flow from operations during the quarter were used to repay $5.7 million of borrowings under our $100 million revolving line of credit and $3.5 million on our term loan. As of December 31, 2011, no borrowings were outstanding under the company's revolver."

2012 First Quarter Guidance

In commenting on guidance for the first quarter of 2012, Armbruster said, "We anticipate our revenues for the first quarter will be in the range of $225 million to $240 million representing an increase of 32% to 40% from the first quarter of 2011. Further, we expect diluted income per share available to common stockholders to be between $0.22 and $0.24, compared to diluted income per share available to common stockholders of $0.14 in the prior year quarter."

2011 Fourth 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 12.8% to $118.5 million for the fourth quarter of 2011 from $105.1 million for the fourth quarter of 2010. LTL net revenues for the fourth quarter of 2011 were $29.4 million, or 24.8% of LTL revenues, compared to $25.7 million, or 24.4% of LTL revenues, for the fourth quarter of 2010. LTL operating income was $5.3 million, or 4.5% of LTL revenues, for the fourth quarter of 2011 compared to $4.2 million, or 4.0% of revenues, for the fourth quarter of 2010.

Summary LTL operating statistics for the three months and year ended December 31 are shown below.

Three Months Ended December 31, Year Ended December 31,
% %
2011 2010 Change 2011 2010 Change
Operating ratio 95.5% 96.0% 94.8% 94.7%
Tonnage (in thousands of tons) 306.8 287.3 6.8% 1,256.3 1,204.9 4.3%
Shipments (in thousands) 471.4 444.7 6.0% 1,905.9 1,818.5 4.8%
Revenue per hundredweight (incl. fuel) $ 18.81 $ 17.44 7.9% $ 18.27 $ 16.62 9.9%
Revenue per hundredweight (excl. fuel) $ 15.42 $ 15.01 2.7% $ 15.00 $ 14.38 4.3%
Weight per shipment (lbs.) 1,302 1,292 0.7% 1,318 1,325 (0.5% )
Linehaul cost per mile (excl. fuel) $ 1.24 $ 1.24 0.0% $ 1.24 $ 1.22 1.6%
Note: Other than operating ratio, the statistics above do not include (i) adjustments for undelivered freight required for financial statement purposes in accordance with RRTS' revenue recognition policy; and (ii) non-LTL related business captured within the LTL segment.

For the TL segment, revenues increased 125.2% to $98.7 million for the fourth quarter of 2011 from $43.8 million for the fourth quarter of 2010. The improvement was primarily due to increases in market pricing and load growth, the expansion of the company's TL brokerage agent network, and the acquisitions of Morgan Southern, Bruenger Trucking and Prime Logistics. For the fourth quarter, Morgan Southern, Bruenger Trucking and Prime Logistics collectively contributed revenues of $50.2 million to the TL segment. Overall, TL net revenues for the fourth quarter of 2011 were $34.8 million, or 35.3% of TL revenues, compared to $5.3 million, or 12.0% of TL revenues, for the fourth quarter of 2010. TL operating income was $7.7 million, or 7.8% of TL revenues, for the fourth quarter of 2011 compared to $1.9 million, or 4.3% of revenues, for the fourth quarter of 2010.

For the TMS segment, revenues for the fourth quarter of 2011 increased 24.3% to $22.0 million from $17.7 million for the fourth quarter of 2010. TMS net revenues for the fourth quarter of 2011 were $5.7 million, or 26.0% of TMS revenues, compared to $4.6 million, or 25.8% of TMS revenues, for the fourth quarter of 2010. TMS revenue growth during the quarter was primarily attributable to new and existing customer growth. TMS operating income was $2.2 million, or 9.9% of TMS revenues, for the fourth quarter of 2011, compared to $1.2 million, or 7.0% of TMS revenues, for the fourth quarter of 2010.

Conference Call

A conference call is scheduled for Wednesday, February 8, 2012 at 4:30 p.m. Eastern Time. To access the conference call, please dial 866-730-5771 (U.S.) or 857-350-1595 (International) approximately 10 minutes prior to the start of the call. Callers will be prompted for passcode 87140808. The conference call will also be available via live webcast under the Investor Relations section of the Company's website, www.rrts.com.

If you are unable to listen to the live call, a replay will be available through February 15, 2012, and can be accessed by dialing 888-286-8010 (U.S.) or 617-801-6888 (International). Callers will be prompted for passcode 61129555. An archived version of the webcast will also be available under the Investor Relations section of the Company's website, www.rrts.com.

About Roadrunner Transportation Systems, Inc.

Roadrunner is a leading asset-light transportation and logistics services 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. These statements reflect the company's current expectations, and the company 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 the company'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, the company'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 the company'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,
2011 2010 2011 2010
Revenues $ 238,005 $ 165,796 $ 843,627 $ 632,018
Operating expenses:
Purchased transportation costs 168,057 130,313 620,343 494,045
Personnel and related benefits 25,522 16,339 87,178 61,853
Other operating expenses 29,124 11,545 83,625 41,168
Depreciation and amortization 1,597 750 4,978 3,114
Acquisition transaction expenses 430 180 1,368 569
IPO related expenses - - - 1,500
Total operating expenses 224,730 159,127 797,492 602,249
Operating income 13,275 6,669 46,135 29,769
Interest expense:
Interest on long-term debt 2,079 202 4,135 7,954
Dividends on preferred stock subject to mandatory redemption 50 50 200 200
Total interest expense 2,129 252 4,335 8,154
Loss on early extinguishment of debt - - - 15,916
Income before provision for income taxes 11,146 6,417 41,800 5,699
Provision for income taxes 4,281 2,540 15,929 2,108
Net income 6,865 3,877 25,871 3,591
Accretion of Series B preferred stock - - - 765
Net income available to common stockholders $ 6,865 $ 3,877 $ 25,871 $ 2,826
Earnings per share available to common stockholders:
Basic $ 0.22 $ 0.13 $ 0.85 $ 0.11
Diluted $ 0.22 $ 0.12 $ 0.82 $ 0.11
Weighted average common stock outstanding:
Basic 30,706 30,119 30,432 25,779
Diluted 31,765 31,066 31,545 26,777
ROADRUNNER TRANSPORTATION SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share amounts)
December 31, December 31,
2011 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,315 $ 996
Accounts receivable, net 102,358 73,222
Deferred income taxes 9,472 6,367
Prepaid expenses and other current assets 16,400 10,414
Total current assets 131,545 90,999
PROPERTY AND EQUIPMENT, NET 28,447 6,894
OTHER ASSETS:
Goodwill 364,347 246,888
Other noncurrent assets 19,014 3,516
Total other assets 383,361 250,404
TOTAL ASSETS $ 543,353 $ 348,297
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Current maturities of long-term debt $ 14,000 $ -
Accounts payable 50,245 37,241
Accrued expenses and other liabilities 19,480 11,375
Preferred stock subject to mandatory redemption 5,000 -
Total current liabilities 88,725 48,616
LONG-TERM DEBT, net of current maturities 122,500 20,500
OTHER LONG-TERM LIABILITIES 36,175 8,492
PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION - 5,000
Total liabilities 247,400 82,608
STOCKHOLDERS' INVESTMENT:
Common stock $.01 par value; 100,000 shares authorized; 30,705 and 30,147 shares issued and outstanding 301 301
Additional paid-in capital 266,481 262,088
Retained earnings 29,171 3,300
Total stockholders' investment 295,953 265,689
TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 543,353 $ 348,297

Contact Information

  • Contact

    Roadrunner Transportation Systems, Inc.
    Peter Armbruster
    Chief Financial Officer
    414-615-1648

    Vollrath Associates, Inc.
    Marilyn Vollrath
    414-221-0210
    Email Contact