Pacer International Reports Fourth Quarter Results

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Pacer International Reports Fourth Quarter Results

DUBLIN, Ohio--(BUSINESS WIRE)-- Pacer International, Inc. (NAS: PACR) , the asset-light North American freight transportation and logistics services provider, today reported financial results for the three-month period and the year ended December 31, 2012.

FOURTH QUARTER RESULTS

  • Income from operations increased 9.0%, excluding the impact of realignment expense of $0.8 million and $0.3 million in 2012 and 2011, respectively. Intermodal income from operations increased $2.3 million and logistics income from operations decreased $1.4 million;
  • Earnings per share improved by $0.03 to $0.06 in 2012. Excluding the effect of the 2012 realignment expense of $0.02 per share, earnings per share was $0.08 in 2012;
  • Intermodal revenues improved by $7.2 million or 2.5% while logistics revenues declined by 16.1% to $57.3 million. Total revenues decreased by 1.7% to $351.9 million;
  • Intermodal gross margin improved by $2.7 million and logistics gross margin declined by $2.5 million. Total gross margin percentage increased by 20 basis points;
  • Net income increased $1.1 million to $2.2 million;
  • Cash provided by operating activities increased by $2.9 million or 40.8%, from $7.1 million in the fourth quarter of 2011 to $10.0 million in the fourth quarter of 2012.

(In millions, except for per share data)

     2012   2011
Q1   Q2   Q3   Q4Q4
Revenue$345.9$368.3$348.9$351.9$358.0
Gross margin$31.9$32.4$31.7$35.9$35.7
Gross margin %9.2%8.8%9.1%10.2%10.0%
SG&A$31.9$29.9$29.6$32.0$31.5
Income from operations2.52.34.14.2
Net income (loss)(0.3)1.31.12.21.1
Earnings (loss) per share$(0.01)$0.04$0.03$0.06$0.03
 
 

"The quarter was much improved from the previous three as we were focused on improving under-performing traffic corridors and reducing controllable costs to help offset rising external purchased transportation costs. We are also excited about the new opportunities created by our new cross border auto agreement with the Union Pacific. We will pursue automotive parts shipments as a retail provider of door-to-door intermodal services and continue the development of our east-west intermodal business to grow our intermodal segment," said Daniel W. Avramovich, Chairman and Chief Executive Officer.

"We recently implemented a realignment within our intermodal business. The new alignment will increase organizational focus on our retail intermodal and related services, enhance the service we provide to our customers and allow us to focus on delivering consistent and improved financial results," said Paul Svindland, Chief Operating Officer.

"It was a good quarter as both our consolidated net income and gross margin improved year over year. We believe the actions we have taken to combat competitive pricing environments and rising rail costs have positioned us well going forward. We also believe the talented people joining our logistics segment and the new business licenses obtained in China will help us continue to improve our future performance," said John J. Hafferty, Chief Financial Officer.

ANNUAL RESULTS

  • Income from operations decreased $18.1 million. Income from operations in the intermodal segment, excluding from 2011 results the gain on sale of railcar assets of $4.7 million and the $7.3 million impact of the previously announced reduction in volume from an ocean carrier customer, increased year over year by $1.8 million. Total intermodal income from operations decreased $10.2 million and logistics income from operations decreased $8.2 million;
  • Earnings per share decreased from $0.40 in the 2011 period to $0.12 in the 2012 period;
  • Selling, general and administrative expenses decreased by $8.4 million year over year;
  • Intermodal revenues improved by $4.3 million or 0.4%. Excluding the impact from the reduction in volume from an ocean carrier customer of $76.5 million in 2011, intermodal revenues increased by 7.4% to $1,179.6 million. Logistics revenues declined by 21.5% to $238.3 million. Overall, revenues decreased by 4.3% to $1,415.0 million;
  • Intermodal gross margin declined by $10.4 million. Excluding the impact from the reduction in volume from the ocean carrier customer, intermodal gross margin decreased by $3.1 million. Logistics gross margin declined by $11.7 million;
  • Net income decreased $9.6 million to $4.3 million.

(In millions, except for per share data)

         2012    2011
Revenue$1,415.0$1,478.5
Gross margin$131.9$154.0
Gross margin %9.3%10.4%
SG&A$123.4$131.8
Income from operations8.927.0
Net income4.313.9
Earnings per share$0.12$0.40
 
 

A tabular reconciliation detailing the adjustments made to arrive at the adjusted financial results set forth above and elsewhere in this press release from financial results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP") is contained in the reconciliation schedules attached to this press release.

Certain reclassifications have been made to the 2011 operating expenses in order to conform to the 2012 presentation. The reclassifications had no impact on previously reported income. A tabular reconciliation detailing the reclassification amounts for 2011 is contained in the schedules attached to this press release.

2013 GUIDANCE

We are reconfirming our 2013 guidance and we expect earnings per share in 2013 to range between $0.25 and $0.35.

CONFERENCE CALL TODAY Pacer International will hold a conference call for investors, analysts, business and trade media, and other interested parties at 8:30 a.m. EST, today (Thursday, February 7, 2013). To participate, please call five minutes early by dialing (800) 230-1074 (in USA) and ask for "Pacer International Fourth Quarter Earnings Call." International callers can dial (612) 234-9960.

An audio-only, simultaneous Webcast of the live conference call can be accessed through the Investors link on the company's website at www.pacer.com. For persons unable to participate in either the conference call or the Webcast, a digitized replay will be available from February 7, 2013 at 11:00 a.m. EST to March 7, 2013 at 11:59 p.m. EST. For the replay, dial (800) 475-6701(USA) or (320) 365-3844 (international), using access code 278889. During such period, the replay also can be accessed through the Investors link on the company's website at www.pacer.com

ABOUT PACER INTERNATIONAL(www.pacer.com)

Pacer International, a leading asset-light North American freight transportation and logistics services provider, offers a broad array of services to facilitate the movement of freight from origin to destination through its intermodal and logistics operating segments. The intermodal segment offers container capacity, integrated local transportation services, and door-to-door intermodal shipment management. The logistics segment provides truck brokerage, warehousing and distribution, international freight forwarding, and supply-chain management services. For more information on Pacer International visit www.pacer.com.

USE OF NON-GAAP FINANCIAL MEASURES: This press release contains "non-GAAP financial measures" as defined by the Securities and Exchange Commission. These non-GAAP measures are (1) adjusted intermodal revenues, adjusted intermodal gross margin and adjusted intermodal operating income, each of which excludes from annual 2011 results the impact of the previously announced volume reduction of the ocean carrier customer that transitioned its western business directly to the railroad and (2) adjusted income from operations and adjusted earnings per share for the fourth quarters of 2011 and 2012, each of which excludes the impact of realignment expense. Adjusted intermodal operating income also excludes the impact of the gain on sale of railcar assets which occurred in the third quarter of 2011. Non-GAAP measures are used by management and the Board of Directors in their analysis of the company's ongoing core operating performance. Management believes that the non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the company's core businesses and allows investors to more easily compare operating results from period to period. A tabular reconciliation of the differences between the non-GAAP financial information discussed in this release and the most directly comparable financial information calculated and presented in accordance with GAAP is contained in the financial summary statements attached to this press release.

CERTAIN FORWARD-LOOKING STATEMENTS—This press release contains or may contain forward-looking statements, including earnings per share guidance for fiscal year 2013, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on the company's current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions. Among the important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements are general economic and business conditions including the current U.S. and global economic environment and the timing and strength of economic recovery in the U.S. and internationally; industry trends, including changes in the costs of services from rail, motor, ocean and air transportation providers; and other risks discussed in the company's Form 10-K and other filings with the Securities and Exchange Commission, which are incorporated herein by reference. Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described herein as anticipated, believed, expected or intended. Except as otherwise required by federal securities laws, the company does not undertake any obligation to update such forward-looking statements whether as a result of new information, future events or otherwise.

          
 

Pacer International, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in millions)

 
December 31, 2012December 31, 2011
Assets
Current assets
Cash and cash equivalents$20.2$24.0
Accounts receivable, net132.7133.5
Prepaid expenses and other9.412.3
Deferred income taxes2.4 4.0 
Total current assets164.7 173.8 
Property and equipment
Property and equipment, cost108.899.8
Accumulated depreciation(62.0)(56.1)
Property and equipment, net46.8 43.7 
Other assets
Deferred income taxes12.614.1
Other assets9.9 11.7 
Total other assets22.5 25.8 
Total assets$234.0 $243.3 
Liabilities & Equity
Current liabilities
Accounts payable and other accrued liabilities$112.5$127.1
Long-term liabilities
Other1.3 0.9 
Total liabilities113.8 128.0 
Stockholders' equity
Common stock0.40.4
Additional paid-in capital305.7304.7
Accumulated deficit(185.9)(190.2)
Accumulated other comprehensive income 0.4 
Total stockholders' equity120.2 115.3 
Total liabilities and stockholders' equity$234.0 $243.3 
 
 
           
 

Pacer International, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in millions, except share and per share data)

 
Three Months EndedYear Ended
December 31, 2012    December 31, 2011December 31, 2012    December 31, 2011
Revenues$351.9$358.0$1,415.0$1,478.5
Operating expenses:
Cost of purchased transportation and services290.8296.61,181.51,218.7
Direct operating expenses25.225.7101.6105.8
Selling, general and administrative expenses32.031.5123.4131.8
Other income(0.2) (0.4)(4.8)
Total operating expenses347.8 353.8 1,406.1 1,451.5 
Income from operations4.14.28.927.0
Interest expense(0.3)(0.5)(1.4)(2.3)
Income before income taxes3.83.77.524.7
Income tax expense(1.6)(2.6)(3.2)(10.8)
Net income$2.2 $1.1 $4.3 $13.9 
Earnings per share: Read Full Story

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