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Roadrunner Transportation Systems Reports 2016 First Quarter Results and Revises 2016 Guidance

CUDAHY, Wis., May 04, 2016 (BUSINESS WIRE) -- Roadrunner Transportation Systems, Inc. RRTS, -10.31% a leading asset-light transportation and logistics service provider, today reported financial results for the three months ended March 31, 2016.

Revenues for the quarter ended March 31, 2016 decreased 4.8% to $465.6 million from $489.0 million for the same quarter in 2015. Operating income was $10.6 million, compared to $26.8 million for the prior year quarter.

Diluted earnings per share available to common stockholders was $0.08 for the first quarter of 2016, compared to $0.35 for the first quarter of 2015. Results for the first quarter of 2016 included $0.05 of downsizing costs. For a comparison of diluted earnings per share between the first quarter of 2015 and the first quarter of 2016 see the table in the “2016 First Quarter Results” section below.

Roadrunner's EBITDA, a non-GAAP financial measure, was $20.1 million for the first quarter of 2016, compared to EBITDA of $33.7 million for the first quarter of 2015.

Cash provided by operating activities increased from $12.3 million for the first quarter of 2015 to $25.4 million for the first quarter of 2016.

For more information about EBITDA, see “Non-GAAP Financial Measures” below. A reconciliation of net income to EBITDA is provided below:

Three Months Ended March 31,
2016 2015
(In thousands)
Net income $ 3,065 $ 13,604
Plus: Provision for income taxes 1,933 8,589
Plus: Interest expense 5,608 4,609
Plus: Depreciation 7,382 4,793
Plus: Amortization 2,154 2,084
EBITDA $ 20,142 $ 33,679

2016 First Quarter Results

In discussing the company's performance, Mark DiBlasi, CEO of Roadrunner, said,

“For the quarter ended March 31, 2016, consolidated revenue decreased $23.3 million, primarily due to the decrease in fuel surcharge revenue, which impacted revenue by $19.2 million quarter-over-quarter, and the decline in freight rates and volumes across most end markets, net of new business.

“Our largest decline in operating income came from the Truckload Logistics segment. Margin reductions in our OEM ground and air expedite business due to excess capacity in both modes and the lack of supply chain disruptions resulted in historically low pricing and a decrease in operating income of $4.8 million ($0.07 impact on diluted earnings per share) from the first quarter of 2015 to the first quarter of 2016. In addition, our TL segment also incurred $2.3 million of downsizing costs during the first quarter of 2016 from the reduction and consolidation of certain specific operations due to a major decline in volume from a significant customer.

“Our LTL segment was impacted by continued weak freight demand in the general industrial markets we serve and lower fuel surcharge revenue resulting in a decline in both revenues and operating income between the first quarter of 2015 and the first quarter of 2016. During the quarter, our LTL segment also incurred $0.7 million of downsizing costs from reducing the number of long haul employee drivers and trucks in favor of more cost effective purchase power and independent contractors. While significantly down from last year's levels, LTL operating income, excluding downsizing costs, improved sequentially from $1.2 million in the fourth quarter of 2015 to $1.9 million in the seasonally low first quarter of 2016. As we continue to execute our sales, service and productivity initiatives, we expect accelerated improvement in LTL results for the balance of the year.

“Our Global Solutions segment performed well due to cost controls and enhanced productivity despite lower global demand. Although revenues decreased quarter-over-quarter within our Global Solutions segment, operating income improved 22%.

“Due to the decline in freight rates across most end markets, we intend to aggressively manage all costs. During the quarter, we incurred $3.0 million of downsizing costs in our TL and LTL segments ($0.05 impact on diluted earnings per share). We would expect a similar amount of downsizing costs in the second quarter of 2016. These downsizing activities will benefit our financial results in future periods.

“We continue to enhance cash flows from operations. Cash provided by operating activities increased 107% from $12.3 million for the first quarter of 2015 to $25.4 million for the first quarter of 2016. Cash provided by operating activities for the twelve months ended March 31, 2016 was $86.5 million. Net capital expenditures, primarily for growth and productivity initiatives, were $7.4 million for the first quarter of 2016 compared to $15.3 million for the first quarter of 2015. At March 31, 2016, total debt was $422.0 million and cash and cash equivalents were $8.1 million. Total availability under our credit facility at March 31, 2016 was $249.2 million. While our focus over the past several years has been on strategic growth and acquisition initiatives to position us for the long term, our focus in 2016 will be to continue to enhance cash flow from operations and to reduce our leverage ratio towards our long-term goal of less than 2.5 times EBITDA.”

A comparison of diluted earnings per share available to common stockholders between the first quarter of 2015 and the first quarter of 2016 is provided below:

Diluted earnings per share available to common stockholders for the quarter ended March 31, 2015 $ 0.35
TL operating income change, excluding downsizing
Margin reduction in OEM ground and air expedite (0.07 )
Other changes in operating income related primarily to pricing and volume in certain markets (0.04 )
LTL segment operating income change, excluding downsizing (0.10 )
Global Solutions operating income increase 0.02
Corporate and interest expense changes (0.03 )
Diluted earnings per share, excluding downsizing costs, for the quarter ended March 31, 2016 0.13
Downsizing costs incurred in the quarter ended March 31, 2016 (0.05 )
Diluted earnings per share available to common stockholders for the quarter ended March 31, 2016 $ 0.08

2016 Full...


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