Roadrunner Transportation Q3 net income up 64% to US$7.2M as revenues rise 38% to US$226.2M mostly on new customer growth, pricing initiatives, fuel increases and inclusion of acquisitions of Morgan Southern, Prime

CUDAHY, Wisconsin , November 3, 2011 (press release) – Roadrunner Transportation Systems, Inc. (NYSE: RRTS - News), a leading asset-light transportation and logistics services provider, today reported financial results for the three and nine months ended September 30, 2011.

Roadrunner's summary financial results for the three and nine months ended September 30 are highlighted below. Third quarter diluted income per share available to common stockholders increased 64.3% over the prior year. Excluding acquisition transaction expenses of $0.6 million related to the August 2011 acquisition of Prime Logistics Corporation ("Prime"), diluted income per share would have been $0.24.

2011 Third Quarter Results

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

"Revenues increased 38.2% and net revenues expanded 73.1% 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. Our operating income growth of 61.4% outpaced revenue growth despite the effects of higher fuel prices on revenues and operating costs. Record third quarter revenue and operating income was achieved in all three operating segments.

"LTL revenues increased $19.0 million, or 17.7%, 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 third quarter also drove a tonnage increase of 6.0% over the prior year. Tonnage growth was flat during July as a result of sluggish freight demand, but rebounded during August and September with increases in excess of 8.0%. Revenue per hundredweight increased 10.6% over the prior year, including 6.4% related to fuel. During the third 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 94.8% in the third quarter from 95.2% in the prior year quarter but our third quarter operating ratio rose slightly from 94.4% in the second quarter of 2011. While our initiatives to penetrate new customers and expand into new geographic regions impacted our operating ratio in the quarter primarily as a result of building density in specific lanes, we expect these initiatives to improve our operating ratio and drive positive tonnage growth in future quarters.

"TL revenues grew by $40.2 million, or 102.9%, from the prior year. Revenues from Morgan Southern (acquired in early February), Bruenger Trucking (acquired at the end of May) and Prime (acquired at the end of August) accounted for $33.5 million of the increase, with the balance of $6.7 million representing organic growth of 17.1%. The impact of the acquisitions and operating leverage associated with our revenue growth led to nearly a three-fold increase in our TL operating income and an improvement in our TL operating ratio to 92.9% from 96.0% in the third quarter of 2010.

"For our TMS business, continued organic growth during the quarter generated a $3.7 million, or 20.6%, increase in revenues and a 33.6% increase in operating income from the prior year. This growth drove improvement in our TMS operating ratio to 89.0% from 90.0% in the prior year."

2011 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 17.7% to $126.2 million for the third quarter of 2011 from $107.2 million for the third quarter of 2010. LTL net revenues for the third quarter of 2011 were $29.6 million, or 23.4% of LTL revenues, compared to $25.6 million, or 23.9% of LTL revenues, for the third quarter of 2010. The decline in net revenue margin was a result of rising fuel prices and the impact of market expansion initiatives. LTL operating income was $6.5 million, or 5.2% of LTL revenues, for the third quarter of 2011 compared to $5.2 million, or 4.8% of revenues, for the third quarter of 2010.

Summary LTL operating statistics for the three and nine months ended September 30 are shown below.

For the TL segment, revenues increased 102.9% to $79.3 million for the third quarter of 2011 from $39.1 million for the third 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. For the third quarter, Morgan Southern, Bruenger Trucking and Prime collectively contributed revenues of $33.5 million to the TL segment. Overall, TL net revenues for the third quarter of 2011 were $25.6 million, or 32.3% of TL revenues, compared to $4.5 million, or 11.6% of TL revenues, for the third quarter of 2010. TL operating income was $5.6 million, or 7.1% of TL revenues, for the third quarter of 2011 compared to $1.6 million, or 4.0% of revenues, for the third quarter of 2010.

For the TMS segment, revenues for the third quarter of 2011 increased 20.6% to $21.70 million from $18.0 million for the third quarter of 2010. TMS net revenues for the third quarter of 2011 were $5.4 million, or 25.1% of TMS revenues, compared to $5.0 million, or 27.6% of TMS revenues, for the third quarter of 2010. The improvement in TMS revenue growth during the quarter was primarily attributable to new and existing customer growth. The decline in net revenue margin was a result of rising fuel prices and increased carrier costs. TMS operating income was $2.4 million, or 11.0% of TMS revenues, for the third quarter of 2011, compared to $1.8 million, or 10.0% of TMS revenues, for the third quarter of 2010.

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. (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,
                                 --------------------- --------------------
                                    2011       2010       2011       2010
                                 ---------- ---------- ---------- ---------

Revenues                         $  226,193 $  163,690 $  605,622 $ 466,222
Operating expenses:
   Purchased transportation
    costs                           165,521    128,629    452,286   363,732
   Personnel and related
    benefits                         23,598     15,826     61,656    45,514
   Other operating expenses          22,163     10,502     54,501    29,623
   Depreciation and amortization      1,499        747      3,381     2,364
   Acquisition transaction
    expenses                            618         57        938       389
   IPO related expenses                   -          -          -     1,500
                                 ---------- ---------- ---------- ---------
      Total operating expenses      213,399    155,761    572,762   443,122
                                 ---------- ---------- ---------- ---------

Operating income                     12,794      7,929     32,860    23,100

Interest expense:
   Interest on long-term debt         1,172        504      2,056     7,752
   Dividends on preferred stock
    subject to mandatory
    redemption                           50         50        150       150
                                 ---------- ---------- ---------- ---------
      Total interest expense          1,222        554      2,206     7,902
                                 ---------- ---------- ---------- ---------

Loss on early extinguishment of
 debt                                     -          -          -    15,916
                                 ---------- ---------- ---------- ---------

   Income (loss) before
    (benefit) provision for
    income taxes                     11,572      7,375     30,654      (718)

Provision (benefit) for income
 taxes                                4,397      2,991     11,648      (432)
                                 ---------- ---------- ---------- ---------

Net income (loss)                     7,175      4,384     19,006      (286)

Accretion of Series B preferred
 stock                                    -          -          -       765
                                 ---------- ---------- ---------- ---------

   Net income (loss) available
    to common stockholders       $    7,175 $    4,384 $   19,006 $  (1,051)
                                 ========== ========== ========== =========

Earnings (loss) per share
 available to common
 stockholders:
   Basic                         $     0.23 $     0.15 $     0.63 $   (0.04)
                                 ========== ========== ========== =========
   Diluted                       $     0.23 $     0.14 $     0.60 $   (0.04)
                                 ========== ========== ========== =========

Weighted average common stock
 outstanding:
   Basic                             30,562     30,052     30,340    24,316
                                 ========== ========== ========== =========
   Diluted                           31,758     31,089     31,576    24,316
                                 ========== ========== ========== =========

See notes to unaudited condensed consolidated financial statements.



* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.