Roadrunner Transportation Systems Reports 2012 Fourth Quarter and Year-End Results and Announces Fir

Roadrunner Transportation Systems Reports 2012 Fourth Quarter and Year-End Results and Announces First Quarter 2013 Guidance

CUDAHY, Wis.--(BUSINESS WIRE)-- Roadrunner Transportation Systems, Inc. (NYS: RRTS) , a leading asset-light transportation and logistics service provider, today reported financial results for the three and twelve months ended December 31, 2012.

Roadrunner's summary financial results for the three and twelve months ended December 31 are highlighted below. Fourth quarter 2012 net income available to common stockholders increased 38.8% over the prior year quarter to $9.5 million. Fourth quarter 2012 diluted income per share available to common stockholders increased 31.8% over the prior year quarter to $0.29.

Three Months Ended

Twelve Months Ended

(In thousands, except per share data)

December 31,

December 31,

2012

2011

2012

2011

Total revenues

$

295,069

$

238,005

$

1,073,354

$

843,627

Net revenues (total revenues less purchased transportation costs)

$

90,558

$

69,948

$

319,895

$

223,284

Depreciation and amortization

2,990

1,597

9,499

4,978

Other operating expenses

69,751

54,646

240,673

170,803

Acquisition transaction expenses

85

430

773

1,368

Operating income

$

17,732

$

13,275

$

68,950

$

46,135

Net income available to common stockholders

9,527

6,865

37,530

25,871

Weighted average diluted shares outstanding

33,101

31,765

32,425

31,545

Diluted income per share available to common stockholders

$

0.29

$

0.22

$

1.16

$

0.82


2012 Fourth Quarter and Year-end Results

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

"Strong performance across all of our business segments generated fourth quarter revenue growth of 24.0% and net revenue growth of 29.5%. Due to sales and operational initiatives, our operating income growth of 33.6% outpaced revenue. Our operating ratio improved 40 basis points to 94.0% compared to 94.4% in the fourth quarter of 2011, despite additional costs incurred related to Hurricane Sandy. The impact of additional shares related to our December common stock offering, lost revenue and additional costs incurred related to Hurricane Sandy, and transaction costs related to the fourth quarter acquisitions of Central Cal Transportation (Central Cal), A&A Express (A&A) and Direct Connection Transportation (DCT) negatively impacted our fourth quarter diluted earnings per share by approximately $0.02.

"Our LTL operating ratio improved to 94.9% in the fourth quarter of 2012 from 95.5% in the fourth quarter of 2011. Our continued initiatives to expand into new geographic regions, build density, improve pricing and enhance productivity, as well as the addition of Expedited Freight Systems (EFS) in August 2012, resulted in a net revenue margin improvement from 24.8% in the fourth quarter of 2011 to 28.1% in the fourth quarter of 2012. We are pleased with the improvement in our operating ratio over last year, despite experiencing load inefficiencies due to Hurricane Sandy and incurring integration costs on a non-recurring basis associated with the consolidation of certain EFS operations.

"Our continued performance initiatives, as well as improvement in our insurance claims experience led to our TL operating ratio improving sequentially to 92.8% in the fourth quarter 2012 from 94.1% in the third quarter of 2012. TL revenues grew by $44.7 million, or 45.3%, from the prior year quarter. Incremental revenues from our 2012 acquisitions accounted for $34.3 million of the increase, with the balance of $10.4 million representing organic growth of 10.5%. The positive impact of the acquisitions and operating leverage associated with our revenue growth led to a 33.9% increase in our TL operating income quarter-over-quarter.

"TMS revenue grew $1.8 million, or 8.3%, in the fourth quarter of 2012 from the prior year quarter. Organic growth, pricing and our late February 2012 acquisition of Capital Transportation Logistics accounted for the 8.3% increase. The operating leverage associated with this growth led to a 29.6% increase in TMS operating income quarter-over-quarter. Our TMS operating ratio improved to 88.2% compared to 90.1% in the fourth quarter of 2011.

"Overall, we are extremely pleased with our 2012 performance. In 2012, total company revenue increased 27.2% to $1,073.4 million from $843.6 million in 2011. This revenue growth was a combination of both organic- and acquisition-related growth. Our total company operating income increased 49.5% to $69.0 million in 2012 from $46.1 million in 2011. Our total company operating ratio improved to 93.6% in 2012 from 94.5% in 2011. Finally, our diluted income per share available to common stockholders increased 41.5% to $1.16 in 2012 from $0.82 in 2011."

2013 First Quarter Guidance

In commenting on guidance for the first quarter of 2013, Peter Armbruster, CFO of Roadrunner, said, "We anticipate our revenues for the first quarter to be in the range of $285 million to $310 million, representing an increase of 20% to 31% from the first quarter of 2012. Further, we expect diluted income per share available to common stockholders to be between $0.27 and $0.29, compared to diluted income per share available to common stockholders of $0.25 in the prior year quarter. The impact on diluted income per share from our December 2012 stock offering of 3,925,000 shares will be approximately $0.03 between years. On an adjusted basis, our diluted income per share guidance of $0.27 to $0.29 represents an increase of 23% to 32% from the first quarter of 2012 diluted income per share of $0.22.

2012 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 9.6% to $129.9 million for the fourth quarter of 2012 from $118.5 million for the fourth quarter of 2011. LTL net revenues for the fourth quarter of 2012 were $36.4 million, or 28.1% of LTL revenues, compared to $29.4 million, or 24.8% of LTL revenues, for the fourth quarter of 2011. LTL operating income was $6.6 million, or 5.1% of LTL revenues, for the fourth quarter of 2012 compared to $5.3 million, or 4.5% of LTL revenues, for the fourth quarter of 2011.

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

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2012

2011

% Change

2012

2011

% Change

Operating ratio

94.9

95.5

93.1

94.8

Tonnage (in thousands of tons)

354.3

306.8

15.5

%

1,368.0

1,256.3

8.9

%

Shipments (in thousands)

540.4

471.4

14.6

%

2,090.4

1,905.9

9.7

%

Revenue per hundredweight (incl. fuel)

$

17.92

$

18.81

(4.7

%)

$

18.46

$

18.27

1.0

%

Revenue per hundredweight (excl. fuel)

$

14.61

$

15.42

(5.3

%)

$

15.08

$

15.00

0.5

%

Weight per shipment (lbs.)

1,311

1,302

0.7

%

1,309

1,318

(0.7

%)

Linehaul cost per mile (excl. fuel)

$

1.24

$

1.24

0.0

%

$

1.24

$

1.24

0.0

%

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 45.3% to $143.4 million for the fourth quarter of 2012 from $98.7 million for the fourth quarter of 2011. The improvement was primarily due to increases in market pricing and load growth, increased utilization of Roadrunner's TL brokerage agent network, and the acquisitions of D&E Transport, CTW Transport, R&M/Sortino, Central Cal, A&A and DCT. For the fourth quarter, these acquisitions collectively contributed incremental TL revenues of $34.3 million. Overall, TL net revenues for the fourth quarter of 2012 were $47.2 million, or 32.9% of TL revenues, compared to $34.8 million, or 35.3% of TL revenues, for the fourth quarter of 2011. TL operating income was $10.3 million, or 7.2% of TL revenues, for the fourth quarter of 2012 compared to $7.7 million, or 7.8% of TL revenues, for the fourth quarter of 2011.

TMS revenues for the fourth quarter of 2012 increased 8.3% to $23.8 million from $22.0 million for the fourth quarter of 2011. TMS net revenues for the fourth quarter of 2012 were $6.9 million, or 29.1% of TMS revenues, compared to $5.7 million, or 26.0% of TMS revenues, for the fourth quarter of 2011. TMS revenue growth during the quarter was primarily attributable to new and existing customer growth and the acquisition of Capital Transportation Logistics. TMS operating income was $2.8 million, or 11.8% of TMS revenues, for the fourth quarter of 2012, compared to $2.2 million, or 9.9% of TMS revenues, for the fourth quarter of 2011.

Conference Call

A conference call is scheduled for Wednesday, February 6, 2013 at 4:30 p.m. Eastern Time. To access the conference call, please dial 866-383-8003 (U.S.) or 617-597-5330 (International) approximately 10 minutes prior to the start of the call. Callers will be prompted for passcode 64552489. 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 February 13, 2013, and can be accessed by dialing 888-286-8010 (U.S.) or 617-801-6888 (International). Callers will be prompted for passcode 66287729. 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, truckload and logistics, transportation management solutions, intermodal solutions, and domestic and international air. 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 sales and operational initiatives, Roadrunner's initiatives to expand into new geographic regions, build density, improve pricing and enhance productivity, the impact of Roadrunner's December 2012 stock offering, the impact of Hurricane Sandy, Roadrunner's acquisitions, and Roadrunner's expected revenues and diluted earnings per share available to common stockholders for the first 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

Twelve Months Ended

December 31,

December 31,

2012

2011

2012

2011

Revenues

$

295,069

$

238,005

$

1,073,354

$

843,627

Operating expenses:

Purchased transportation costs

204,511

168,057

753,459

620,343

Personnel and related benefits

33,928

25,522

119,955

87,178

Other operating expenses

35,823

29,124

120,718

83,625

Depreciation and amortization

2,990

1,597

9,499

4,978

Acquisition transaction expenses

85

430

773

1,368

Total operating expenses

277,337

224,730

1,004,404

797,492

Operating income

17,732

13,275

68,950

46,135

Interest expense:

Interest on long-term debt

2,169

2,079

7,981

4,135

Dividends on preferred stock subject to mandatory redemption

50

49

200

Total interest expense

2,169

2,129

8,030

4,335

Income before provision for income taxes

15,563

11,146

60,920

41,800

Provision for income taxes

6,036

4,281

23,390

15,929

Net income available to common stockholders

$

9,527

$

6,865

$

37,530

$

25,871

Earnings per share available to common stockholders:

Basic

$

0.30

$

0.22

$

1.21

$

0.85

Diluted

$

0.29

$

0.22

$

1.16

$

0.82

Weighted average common stock outstanding:

Basic

31,732

30,706

31,040

30,432

Diluted

33,101

31,765

32,425

31,545

ROADRUNNER TRANSPORTATION SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

December 31,

December 31,

2012

2011

ASSETS

Current assets:

Cash and cash equivalents

$

11,908

$

3,315

Accounts receivable, net of allowances of $1,490 and $1,461, respectively

122,947

102,358

Deferred income taxes

3,800

9,497

Prepaid expenses and other current assets

26,461

16,400

Total current assets

165,116

131,570

Property and equipment, net of accumulated depreciation of $20,100 and $13,303, respectively

68,576

28,447

Other assets:

Goodwill

442,143

364,687

Intangible assets, net

12,710

10,381

Other noncurrent assets

12,263

8,633

Total other assets

467,116

383,701

Total assets

$

700,808

$

543,718

LIABILITIES AND STOCKHOLDERS' INVESTMENT

Current liabilities:

Current maturities of long-term debt

$

17,000

$

14,000

Accounts payable

54,887

50,245

Accrued expenses and other liabilities

29,132

19,480

Preferred stock subject to mandatory redemption

5,000

Total current liabilities

101,019

88,725

Long-term debt, net of current maturities

144,500

122,500

Other long-term liabilities

63,210

36,540

Total liabilities

308,729

247,765

Stockholders' investment:

Common stock $.01 par value; 100,000 shares authorized; 34,371 and 30,707 shares issued and outstanding

344

307

Additional paid-in capital

325,034

266,475

Retained earnings

66,701

29,171

Total stockholders' investment

392,079

295,953

Total liabilities and stockholders' investment

$

700,808

$

543,718



Roadrunner Transportation Systems, Inc.
Peter Armbruster, 414-615-1648
Chief Financial Officer
or
Vollrath Associates, Inc.
Marilyn Vollrath, 414-221-0210
ir@rrts.com

KEYWORDS: United States North America Wisconsin

INDUSTRY KEYWORDS:

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