Pacer International Q2 net income soars 200% to US$4.2M as revenues drop 3.6% to US$386.3M; results attributed to capacity allocation decision processes, cost controls

DUBLIN, Ohio , July 28, 2011 (press release) – Pacer International, Inc. (Nasdaq:PACR - News), the asset-light North American freight transportation and logistics services provider, today reported financial results for the three and six month periods ended June 30, 2011.

SECOND QUARTER RESULTS

    * Revenues were $386.3 million. Excluding revenues from the transitioned east-west big box business during 2010, intermodal revenues improved by $27.2 million or 9.8%;
    * Gross margin percentage improved to 12.0% in the 2011 period compared to 11.2% in the 2010 period;
    * Selling, general and administrative expenses decreased $3.2 million or 8%;
    * Income from operations increased $4.3 million or 134% to $7.5 million;
    * Operating margin percentage improved to 1.9% in the 2011 period compared to 0.8% in the 2010 period;
    * Net income increased by $2.8 million to $4.2 million; and
    * Earnings per share increased by $0.08 to earnings per share of $0.12 in 2011.
 

(In millions, except for per share data)
                   
        2011         2010
        Q1       Q2         Q2
Revenue       $ 358.4       $ 386.3         $ 401.0
Gross margin       $ 42.1       $ 46.3         $ 44.8
Gross margin %         11.7%         12.0%           11.2%
SG&A       $ 36.5       $ 37.0         $ 40.2
Income from operations         3.9         7.5           3.2
Operating margin %         1.1%         1.9%           0.8%
Net income         2.0         4.2           1.4
Earnings per share       $ 0.06       $ 0.12         $ 0.04

 

 “We continued on the track of improved sustainable profitability as our earnings per share increased to $0.12 for the quarter and to $0.18 year-to-date. Our continued focus on growth and leveraging our SG&A has resulted in our positive financial results to date,” said John J. Hafferty, CFO of Pacer.

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. Significant items affecting comparability between periods are adjusted revenues for 2010, which exclude the revenues from the transitioned east-west big box business from intermodal marketing companies (IMCs).

YEAR-TO-DATE RESULTS

    * Revenues were $744.7 million. Excluding revenues from the transitioned east-west big box business during 2010, intermodal revenues improved by $52.7 million or 9.9%;
    * Gross margin percentage increased to 11.9% in the 2011 period compared to 11.2% in the 2010 period;
    * Selling, general and administrative expenses decreased $5.5 million or 7%;
    * Income from operations increased by $7.6 million or tripled to $11.4 million;
    * Operating margin percentage improved to 1.5% in the 2011 period compared to 0.5% in the 2010 period;
    * Net income increased $5.3 million to $6.2 million; and
    * Earnings per share increased by $0.15 to earnings per share of $0.18 in 2011.

 

        2011         2010
        Year-to-Date         Year-to-Date
Revenue       $ 744.7         $ 764.7
Gross margin       $ 88.4         $ 85.6
Gross margin %         11.9%           11.2%
SG&A       $ 73.5         $ 79.0
Income from operations         11.4           3.8
Operating margin %         1.5%           0.5%
Net income         6.2           0.9
Earnings per share       $ 0.18         $ 0.03

 

 “The significant improvement in operating income is a nice reflection of the strides we have made in three areas including delivery of excellent service, capacity allocation decision processes, and cost controls,” said Daniel W. Avramovich, chairman and CEO of Pacer. “We also would like to recognize the hard work and dedication of our employees for their focus on serving our customers and our Company. The fruits of their efforts are resident within our improved operating results.”


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.

 

Pacer International, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in millions, except share and per share data)

         
    Three Months Ended   Six Months Ended
    June 30, 2011   June 30, 2010   June 30, 2011   June 30, 2010
                 
                 
Revenues   $ 386.3     $ 401.0     $ 744.7     $ 764.7  
                 
Operating Expenses:                
Cost of purchased transportation and services     315.5       332.0       607.8       631.6  
Direct operating expense (excluding depreciation)     24.5       24.2       48.5       47.5  
Selling, general and administrative expenses
    37.0       40.2       73.5       79.0  
Depreciation and amortization     1.8       1.4       3.5       2.8  
Total operating expenses     378.8       397.8       733.3       760.9  
                 
Income from operations     7.5       3.2       11.4       3.8  
                 
Interest expense, net     (0.7 )     (1.2 )     (1.3 )     (2.5 )
                 
Income before income taxes     6.8       2.0       10.1       1.3  
                 
Income tax expense     2.6       0.6       3.9       0.4  
                 
Net income   $ 4.2     $ 1.4     $ 6.2     $ 0.9  
                 
                 
Earnings per share:                
                 
Basic:                
Earnings per share   $ 0.12     $ 0.04     $ 0.18     $ 0.03  
                 
Diluted:                
Earnings per share   $ 0.12     $ 0.04     $ 0.18     $ 0.03  

 

 


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