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Roadrunner Transportation Systems Reports Third Quarter 2019 Operating Results

DOWNERS GROVE, Ill.--(BUSINESS WIRE)--

  • Revenue and Adjusted EBITDA declined in 2019 third quarter primarily due to continued lower market demand and rates amplified by the strike at the company’s largest customer, General Motors, which reduced revenue by approximately $17 million in September and an estimated $31 million in October
  • Malware attack was successfully managed; quarantined servers and applications primarily impacted the LTL segment which reduced revenue by approximately $7 million in September and an estimated $3 million in October
  • PeakTM enterprise logistics technology platform implementation on track in Active On-Demand and Ascent segments; increased technology investments in LTL segment
  • Initiated dry van downsizing and path to improved operational performance
  • Successful divestiture of intermodal services business within the Truckload segment for $51.25 million; closed on November 5, 2019
  • Progress made on narrowing strategic focus to value-added logistics and asset-light LTL businesses

 

Roadrunner Transportation Systems, Inc. (“Roadrunner” or the “company”) (RRTS), a leading asset-right transportation and asset-light logistics service provider, today announced results for the third quarter ended September 30, 2019.

Third Quarter Financial Results

Revenues decreased to $459.1 million in the third quarter of 2019 compared to $536.6 million in the third quarter of 2018. Lower revenues were primarily due to declines in air and ground expedited logistics at Active On-Demand as well as reduced shipment volumes and rates at the Ascent and Truckload segments. Third quarter 2019 results were also negatively impacted by the General Motors strike in the last two weeks of September, which reduced revenue in the Active On-Demand and Truckload segments by approximately $13 million and $4 million, respectively, and a malware attack in September that negatively impacted revenue in the LTL segment by approximately $7 million.

Operating loss was $92.8 million in the third quarter of 2019 compared to $10.8 million in the third quarter of 2018. Impacting the consolidated operating loss in the third quarter of 2019 was $39.7 million of goodwill, intangible asset and asset impairment charges and $13.4 million of operations restructuring costs related to the downsizing of the dry van business. Excluding impairment and operations restructuring costs, the higher consolidated operating loss in the third quarter of 2019 was primarily attributable to the impact of lower revenues across all of the company’s operating segments and higher insurance and claims costs mostly attributable to the Truckload segment.

Net loss was $97.8 million in the third quarter of 2019 compared to $41.6 million in the third quarter of 2018. In addition to the explanations provided above for the company’s consolidated operating loss, the consolidated net loss in the third quarter of 2019 was also impacted by a decrease in interest expense of $30.3 million resulting from the redemption of preferred stock in the first quarter of 2019 and a lower benefit from income taxes. The company’s effective income tax rate was 0.6% and 10.8% during the third quarter of 2019 and 2018, respectively.

Diluted loss per share available to common stockholders was $2.60 for the third quarter of 2019, compared to diluted loss per share of $26.99 for the third quarter of 2018. On April 5, 2019, the company executed a 1-for-25 reverse stock split. All share and per common share data have been retroactively adjusted for all periods presented. The weighted average common stock outstanding used in the calculation of diluted loss per share was significantly higher in the third quarter of 2019 due to the company’s issuance of 36 million shares of common stock in the rights offering that was completed in February 2019.

The table below shows the changes in revenues and is based on management’s analysis and estimates.

(In thousands)

Three Months Ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Ascent

 

Active On-Demand

 

LTL

 

TL

 

Corporate/ Eliminations

 

Total

Q3 Revenue 2018

$

145,632

 

 

$

146,217

 

 

$

113,948

 

 

$

140,663

 

 

$

(9,876

)

 

$

536,584

 

Organic Growth (Decline)

(19,732

)

 

(24,578

)

 

478

 

 

(9,417

)

 

377

 

 

(52,872

)

Strike at General Motors

 

 

(13,365

)

 

 

 

(4,050

)

 

 

 

(17,415

)

Malware Attack

 

 

 

 

(7,150

)

 

 

 

 

 

(7,150

)

Q3 Revenue 2019

$

125,900

 

 

$

108,274

 

 

$

107,276

 

 

$

127,196

 

 

$

(9,499

)

 

$

459,147

 

Percent change in quarter over quarter revenue

(13.5

)%

 

(25.9

)%

 

(5.9

)%

 

(9.6

)%

 

 

 

(14.4

)%

Adjusted EBITDA for the quarters ended September 30, 2019 and 2018 was calculated as follows:

(In thousands)

Three Months Ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Ascent

 

Active On-Demand

 

LTL

 

TL

 

Corporate/ Eliminations

 

Total

Net (loss) income

$

(29,141)

 

 

$

202

 

 

$

(13,140)

 

 

$

(30,974)

 

 

$

(24,698)

 

 

$

(97,751)

 

Plus: Total interest expense

92

 

 

 

 

415

 

 

830

 

 

4,143

 

 

5,480

 

Plus: Benefit from income taxes

(10)

 

 

 

 

 

 

 

 

(544)

 

 

(554)

 

Plus: Depreciation and amortization

1,590

 

 

2,143

 

 

1,880

 

 

7,022

 

 

2,836

 

 

15,471

 

Plus: Impairment charges

34,528

 

 

 

 

1,076

 

 

4,064

 

 

 

 

39,668

 

Plus: Long-term incentive compensation expenses

 

0

 

 

 

 

 

 

3,479

 

 

3,479

 

 

Plus: Operations restructuring costs

 

 

 

 

 

 

13,426

 

 

 

 

13,426

 

Plus: Corporate restructuring and restatement costs

 

 

 

 

 

 

 

 

4,267

 

 

4,267

 

Adjusted EBITDA

$

7,059

 

 

$

2,345

 

 

$

(9,769)

 

 

$

(5,632)

 

 

$

(10,517)

 

 

$

(16,514)

 

Adjusted EBITDA as a % of revenue

 

5.6 %

 

 

 

2.2%

 

 

 

(9.1)%

 

 

 

(4.4)%

 

 

 

 

 

 

 

(3.6)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

Three Months Ended September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Ascent

 

Active On-Demand

 

LTL

 

TL

 

Corporate/ Eliminations

 

Total

Net (loss) income

$

7,319

 

 

$

5,634

 

 

$

(5,072)

 

 

$

(6,555)

 

 

$

(42,887)

 

 

$

(41,561)

 

Plus: Total interest expense

26

 

 

 

 

32

 

 

134

 

 

35,606

 

 

35,798

 

Plus: Provision (benefit) for income taxes

129

 

 

 

 

 

 

 

 

(5,187)

 

 

(5,058)

 

Plus: Depreciation and amortization

1,183

 

 

2,069

 

 

876

 

 

4,387

 

 

1,099

 

 

9,614

 

Plus: Long-term incentive compensation expenses

 

0

 

 

 

 

 

 

951

 

 

951

 

Plus: Corporate restructuring and restatement costs

 

 

 

 

 

 

 

 

4,713

 

 

4,713

 

Adjusted EBITDA

$

8,657

 

 

$

7,703

 

 

$

(4,164)

 

 

$

(2,034)

 

 

$

(5,705)

 

 

$

4,457

 

Adjusted EBITDA as a % of revenue

 

5.9 %

 

 

 

5.3%

 

 

 

(3.7)%

 

 

 

(1.4)%

 

 

 

 

 

 

 

0.8%

 

 

For more information about Adjusted EBITDA, see “Non-GAAP Financial Measures” below and the company’s SEC filings.

First Nine Months Financial Results

Revenues decreased to $1,447.0 million in the first nine months of 2019 compared to $1,664.6 million in the first nine months of 2018. Lower revenues were primarily due to revenue declines of $153.2 million in air and ground expedited logistics at Active On-Demand as well as reduced truckload shipment volumes and rate mix at Ascent.

Operating loss was $251.4 million in the first nine months of 2019 compared to $35.6 million in the first nine months of 2018. Included in the operating loss for the first nine months of 2019 were $148.8 million of goodwill, intangible asset, software and asset impairment charges. Both periods were also impacted by operations restructuring costs of $13.4 million and $4.7 million, respectively. Excluding impairment and operations restructuring costs, the higher consolidated operating loss in the first nine months of 2019 was primarily attributable to the impact of lower revenues across all of the company’s operating segments.

Net loss was $266.7 million in the first nine months of 2019 compared to $107.2 million in the first nine months of 2018. In addition to the explanations provided above for the company’s consolidated operating loss, the consolidated net loss in the first nine months of 2019 was impacted by a decrease in interest expense of $65.6 million due to the waiver of interest on preferred stock which was fully redeemed after completion of the rights offering in February 2019, partially offset by a loss on debt restructuring of $2.3 million. The effective income tax rate was 0.4% and 7.0% during the first nine months of 2019 and 2018, respectively.

Diluted loss per share available to common stockholders was $8.83 for the first nine months of 2019, compared to diluted loss per share of $69.58 for the first nine months of 2018. As previously mentioned, the weighted average common stock outstanding used in the calculation of diluted loss per share was significantly higher in the first nine months of 2019 due to the company’s issuance of 36 million shares of common stock in the rights offering that was completed in February 2019.

The table below shows the changes in revenues and is based on management’s analysis and estimates.

(In thousands)

Nine Months Ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Ascent

 

Active On-Demand

 

LTL

 

TL

 

Corporate/ Eliminations

 

Total

YTD Revenue 2018

$

425,205

 

 

$

505,753

 

 

$

344,237

 

 

$

430,981

 

 

$

(41,582

)

 

$

1,664,594

 

Organic Growth (Decline)

(37,452

)

 

(139,851

)

 

(9,913

)

 

(21,252

)

 

15,422

 

 

(193,046

)

Strike at General Motors

 

 

(13,365

)

 

 

 

(4,050

)

 

 

 

(17,415

)

Malware Attack

 

 

 

 

(7,150

)

 

 

 

 

 

(7,150

)

YTD Revenue 2019

$

387,753

 

 

$

352,537

 

 

$

327,174

 

 

$

405,679

 

 

$

(26,160

)

 

$

1,446,983

 

Percent change in year over year revenue

(8.8

)%

 

(30.3

)%

 

(5.0

)%

 

(5.9

)%

 

 

 

(13.1

)%

Adjusted EBITDA for the first nine months of 2019 and 2018 was calculated as follows:

(In thousands)

Nine Months Ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Ascent

 

Active On-Demand

 

LTL

 

TL

 

Corporate/ Eliminations

 

Total

Net (loss) income

$

(18,097)

 

 

$

785

 

 

$

(23,502)

 

 

$

(142,861)

 

 

$

(83,024)

 

 

$

(266,699)

 

Plus: Total interest expense

280

 

 

 

 

503

 

 

2,294

 

 

10,917

 

 

13,994

 

Plus: (Benefit from) provision for income taxes

10

 

 

 

 

 

 

 

 

(1,017)

 

 

(1,007)

 

Plus: Depreciation and amortization

4,888

 

 

6,364

 

 

3,603

 

 

23,144

 

 

7,802

 

 

45,801

 

Plus: Long-term incentive compensation expenses

 

 

 

 

 

 

 

 

9,805

 

 

9,805

 

Plus: Settlement of contingent purchase obligation

 

0

 

 

 

 

 

 

360

 

 

360

 

Plus: Impairment charges

34,528

 

 

 

 

1,076

 

 

99,400

 

 

13,773

 

 

148,777

 

Plus: Loss on debt restructuring

 

 

 

 

 

 

 

 

2,270

 

 

2,270

 

Plus: Operations restructuring costs

 

 

 

 

 

 

13,426

 

 

 

 

13,426

 

Plus: Corporate restructuring and restatement costs

 

 

 

 

 

 

 

 

10,941

 

 

10,941

 

Adjusted EBITDA

$

21,609

 

 

$

7,149

 

 

$

(18,320)

 

 

$

(4,597)

 

 

$

(28,173)

 

 

$

(22,332)

 

Adjusted EBITDA as a % of revenue

 

5.6 %

 

 

 

2.0%

 

 

 

(5.6)%

 

 

 

(1.1) %

 

 

 

 

 

 

 

(1.5)%

 

(In thousands)

Nine Months Ended September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Ascent

 

Active On-Demand

 

LTL

 

TL

 

Corporate/ Eliminations

 

Total

Net (loss) income

$

21,281

 

 

$

19,895

 

 

$

(17,555)

 

 

$

(17,185)

 

 

$

(113,595)

 

 

$

(107,159)

 

Plus: Total interest expense

85

 

 

 

 

88

 

 

153

 

 

79,247

 

 

79,573

 

Plus: Benefit from income taxes

129

 

 

 

 

 

 

 

 

(8,169)

 

 

(8,040)

 

Plus: Depreciation and amortization

3,539

 

 

6,099

 

 

2,689

 

 

12,894

 

 

2,582

 

 

27,803

 

Plus: Long-term incentive compensation expenses

 

0

 

 

 

 

 

 

1,954

 

 

1,954

 

Plus: Operations restructuring costs

 

 

 

 

 

 

4,655

 

 

 

 

4,655

 

Plus: Corporate restructuring and restatement costs

 

 

 

 

 

 

 

 

15,537

 

 

15,537

 

Adjusted EBITDA

$

25,034

 

 

$

25,994

 

 

$

(14,778)

 

 

$

517

 

 

$

(22,444)

 

 

$

14,323

 

Adjusted EBITDA as a % of revenue

 

5.9%

 

 

 

5.1%

 

 

 

(4.3)%

 

 

 

0.1%

 

 

 

 

 

 

 

0.9 %

 

Recent Events

On September 30, 2019, the company announced the downsizing of its unprofitable dry van business, which is part of the company’s Truckload segment. The downsizing includes reducing dry van company tractor and trailer fleets by over 50%, closing five terminal locations and eliminating approximately 450 positions. In conjunction with the downsizing activities, the company expects to incur one-time pretax operations restructuring costs of between $12 million and $16 million, excluding the gain or loss on the sale of equipment, the write-down of assets, the termination of lease liabilities, and asset impairment charges. The company incurred $13.4 million of total operations restructuring costs in the third quarter of 2019 of which $10.1 million related to asset impairment charges.

On November 5, 2019, the company announced the sale of its intermodal services business, which is part of the company’s Truckload segment, to Universal Logistics Holdings, Inc. (ULH), for $51.25 million in cash, subject to customary purchase price and working capital adjustments. The company used the proceeds from the sale to repay finance leases and debt associated with Roadrunner Intermodal Services and pay transaction costs, with the remaining amount available for general corporate purposes.

Liquidity Update

The company currently has available funds for working capital and operating purposes from its existing borrowing capacity under its ABL facility and its recent divestiture of the intermodal services business.

CEO Comments on Third Quarter Results

“In the third quarter, we experienced a number of challenges that impacted our operating performance. At the end of the third quarter, we announced the downsizing of our dry van business, which is proceeding as planned. The General Motors strike has now ended, and we are fully recovered from the server and applications quarantine caused by the malware attack. After quarter end, we successfully completed the divestiture of our intermodal services business,” said Curt Stoelting, Chief Executive Officer of Roadrunner.

“Our Ascent International and Retail Distribution businesses continued to show positive operating performance in the third quarter. Demand and rates in the Active On-Demand, Ascent Domestic and Truckload Segment tracked well below prior year comparisons throughout the quarter. Excluding the impact of the malware attack, the LTL segment would have grown revenue in the third quarter compared to the prior year third quarter by 1.8%, despite lower fuel surcharge revenue and a softening in the overall LTL market. In the fourth quarter, we expect to file insurance claims to recover the impact on lost business from the malware attack,” said Stoelting.

“We continue to invest in enhanced technology in our Active On-Demand and Ascent segments where our new Peak enterprise brokerage platform will allow us to maximize our go-to-market capabilities across both segments and harmonize our customer service and back office functions. We also continue to drive strategic investments in our LTL segment including dock automation and productivity applications, optimized line-haul and pricing management tools and improved customer and partner facing visibility technologies,” said Stoelting.

Stoelting concluded, “Despite a very challenging third quarter, we are making progress on executing our longer-term strategic and business improvement plans and technology investments. External events and soft market conditions can delay realizing the benefits from these improvements and investments. We continue to be encouraged by the efforts of our leadership teams and their commitment to the business. With the recent divestiture of the intermodal services business and the downsizing of the dry van business, we are simplifying our portfolio by narrowing our strategic focus to the value-added logistics and asset-light LTL businesses. The goal of this strategy is to improve our operating performance, increase our returns on invested capital, and add significant value-creation opportunities. We continue to evaluate additional divestitures that will enable this strategy.”

Conference Call and Webcast

Roadrunner management will host a conference call to discuss the company’s results for the quarter ended September 30, 2019 on Wednesday, November 6, 2019 at 10:00 a.m. Eastern Time. To access the conference call, please dial 866-763-0340 (U.S.) or 703-871-3799 (International) approximately 10 minutes prior to the start of the call. Callers will be prompted for passcode 6150938. Presentation materials and a live webcast of the call can be accessed on the “events and presentations” page in the Investor Relations section of Roadrunner's website, www.rrts.com. The conference call may include forward-looking statements.

If you are unable to listen to the live call, a replay will be available through Wednesday, November 13, 2019 and can be accessed by dialing 855-859-2056 (U.S.) or 404-537-3406 (International). Callers will be prompted for passcode 6150938. An archived version of the webcast will also be available for a period of time under the Investor Relations section of Roadrunner's website, www.rrts.com.

About Roadrunner Transportation Systems, Inc.

Roadrunner Transportation Systems is a leading asset-right transportation and asset-light logistics service provider offering a suite of solutions under the Roadrunner®, Active On-Demand® and Ascent Global Logistics® brands. The Roadrunner brand offers less-than-truckload and over-the-road truckload services. Active On-Demand offers premium mission critical air and ground transportation solutions. Ascent Global Logistics offers domestic freight management and brokerage, warehousing and retail consolidation, international freight forwarding and customs brokerage. For more information, please visit Roadrunner’s websites, www.rrts.com and www.ascentgl.com.

Safe Harbor Statement

This press release contains forward-looking statements 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, which relate to future events or performance. Forward-looking statements include, among others, statements regarding Roadrunner’s planned path to improved operational performance; the expected operations restructuring costs related to the downsizing of the dry van business; expected insurance claims recoveries; our ability to maximize our go-to-market capabilities; and the ability to improve our operating performance, increase our returns on invested capital and create value. These statements are often, but not always, made through the use of words or phrases such as “may,” “will,” “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “predict,” “potential,” “opportunity,” and similar words or phrases or the negatives of these words or phrases. These forward-looking statements are based on Roadrunner’s current assumptions, expectations and beliefs and are subject to substantial risks, estimates, assumptions, uncertainties and changes in circumstances that may cause Roadrunner’s actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement. Such factors include, among others, risks related to the restatement of Roadrunner’s previously issued financial statements, the remediation of Roadrunner’s identified material weaknesses in its internal control over financial reporting, the litigation resulting from the restatement of Roadrunner’s previously issued financial statements and the other risk factors contained in Roadrunner’s SEC filings, including Roadrunner’s Annual Report on Form 10-K for the year ended December 31, 2018 and Quarterly Reports on Form 10-Q for the first three quarters of 2019. Because the risks, estimates, assumptions and uncertainties referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date hereof, and, except as required by law, Roadrunner assumes no obligation and does not intend to update any forward-looking statement to reflect events or circumstances after the date hereof.

Non-GAAP Financial Measures

EBITDA represents earnings before interest, taxes, depreciation and amortization. Roadrunner calculates Adjusted EBITDA as EBITDA excluding impairment and other non-cash gains and losses, other long-term incentive compensation expenses, loss on debt restructuring, settlements of contingent purchase obligations, operations restructuring costs, and corporate restructuring and restatement costs associated with legal, consulting and accounting matters, including internal and external investigations. Roadrunner uses Adjusted EBITDA as a supplemental measure in evaluating its operating performance and when determining executive incentive compensation. Roadrunner believes Adjusted EBITDA is useful to investors in evaluating its performance compared to other companies in its industry because it assists in analyzing and benchmarking the performance and value of a business. The calculation of Adjusted EBITDA eliminates the effects of financing, income taxes and the accounting effects of capital spending. These items may vary for different companies for reasons unrelated to the overall operating performance of a company’s business. Adjusted EBITDA is not a financial measure presented in accordance with GAAP. Although Roadrunner’s management uses Adjusted EBITDA as a financial measure to assess the performance of its business compared to that of others in Roadrunner’s industry, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of Roadrunner’s results as reported under GAAP. Some of these limitations are:

  • Adjusted EBITDA does not reflect Roadrunner’s cash expenditures, future requirements for capital expenditures or contractual commitments;
  • Adjusted EBITDA does not reflect changes in, or cash requirements for, Roadrunner’s working capital needs;
  • Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on Roadrunner’s debt or dividend payments on Roadrunner’s preferred stock;
  • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and
  • Other companies in Roadrunner’s industry may calculate Adjusted EBITDA differently than Roadrunner does, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered a measure of discretionary cash available to Roadrunner to invest in the growth of the company’s business. Roadrunner compensates for these limitations by relying primarily on Roadrunner’s results of operations under GAAP.

ROADRUNNER TRANSPORTATION SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except par value)

September 30,
2019

 

December 31,
2018

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

5,825

 

 

$

11,179

 

Accounts receivable, net of allowances of $8,186 and $9,980, respectively

223,966

 

 

274,843

 

Income tax receivable

2,275

 

 

3,910

 

Prepaid expenses and other current assets

70,471

 

 

61,106

 

Total current assets

302,537

 

 

351,038

 

Property and equipment, net of accumulated depreciation of $161,815 and $130,077, respectively

201,077

 

 

188,706

 

Other assets:

 

 

 

Operating lease right-of-use asset

115,385

 

 

 

Goodwill

137,372

 

 

264,826

 

Intangible assets, net

30,994

 

 

42,526

 

Other noncurrent assets

5,839

 

 

6,361

 

Total other assets

289,590

 

 

313,713

 

Total assets

$

793,204

 

 

$

853,457

 

LIABILITIES AND STOCKHOLDERS’ INVESTMENT (DEFICIT)

 

 

 

Current liabilities:

 

 

 

Current maturities of debt

$

2,558

 

 

$

13,171

 

Current maturities of indebtedness to related party

9,141

 

 

 

Current finance lease liability

22,598

 

 

13,229

 

Current operating lease liability

35,924

 

 

 

Accounts payable

128,998

 

 

160,242

 

Accrued expenses and other current liabilities

117,565

 

 

110,943

 

Total current liabilities

316,784

 

 

297,585

 

Deferred tax liabilities

2,621

 

 

3,953

 

Other long-term liabilities

3,558

 

 

7,857

 

Long-term finance lease liability

69,743

 

 

37,737

 

Long-term operating lease liability

90,327

 

 

 

Long-term debt, net of current maturities

152,052

 

 

155,596

 

Long-term indebtedness to related party

31,265

 

 

 

Preferred stock

 

 

402,884

 

Total liabilities

666,350

 

 

905,612

 

Commitments and contingencies (Note 12)

 

 

 

Stockholders’ investment (deficit):

 

 

 

Common stock $.01 par value; 44,000 and 4,200 shares authorized, respectively; 37,642 and 1,556 shares issued and outstanding, respectively

376

 

 

16

 

Additional paid-in capital

850,591

 

 

405,243

 

Retained deficit

(724,113

)

 

(457,414

)

Total stockholders’ investment (deficit)

126,854

 

 

(52,155

)

Total liabilities and stockholders’ investment (deficit)

$

793,204

 

 

$

853,457

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

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,

 

2019

 

2018

 

2019

 

2018

Revenues

$

459,147

 

 

$

536,584

 

 

$

1,446,983

 

 

$

1,664,594

 

Operating expenses:

 

 

 

 

 

 

 

Purchased transportation costs

306,362

 

 

365,678

 

 

966,922

 

 

1,146,713

 

Personnel and related benefits

80,161

 

 

78,118

 

 

241,062

 

 

229,843

 

Other operating expenses

96,884

 

 

93,995

 

 

282,437

 

 

291,206

 

Depreciation and amortization

15,471

 

 

9,614

 

 

45,801

 

 

27,803

 

Operations restructuring costs

13,426

 

 

 

 

13,426

 

 

4,655

 

Impairment charges

39,668

 

 

 

 

148,777

 

 

 

Total operating expenses

551,972

 

 

547,405

 

 

1,698,425

 

 

1,700,220

 

Operating loss

(92,825

)

 

(10,821

)

 

(251,442

)

 

(35,626

)

Interest expense:

 

 

 

 

 

 

 

Interest expense - preferred stock

 

 

32,847

 

 

 

 

71,571

 

Interest expense - debt

5,480

 

 

2,951

 

 

13,994

 

 

8,002

 

Total interest expense

5,480

 

 

35,798

 

 

13,994

 

 

79,573

 

Loss on debt restructuring

 

 

 

 

2,270

 

 

 

Loss before income taxes

(98,305

)

 

(46,619

)

 

(267,706

)

 

(115,199

)

Benefit from income taxes

(554

)

 

(5,058

)

 

(1,007

)

 

(8,040

)

Net loss

$

(97,751

)

 

$

(41,561

)

 

$

(266,699

)

 

$

(107,159

)

Loss per share:

 

 

 

 

 

 

 

Basic

$

(2.60

)

 

$

(26.99

)

 

$

(8.83

)

 

$

(69.58

)

Diluted

$

(2.60

)

 

$

(26.99

)

 

$

(8.83

)

 

$

(69.58

)

Weighted average common stock outstanding:

 

 

 

 

 

 

 

Basic

37,639

 

 

1,540

 

 

30,216

 

 

1,540

 

Diluted

37,639

 

 

1,540

 

 

30,216

 

 

1,540

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

ROADRUNNER TRANSPORTATION SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ INVESTMENT (DEFICIT)

(Unaudited)

 

 

Common Stock

 

 

 

 

 

 

(In thousands, except shares)

Shares

 

Amount

 

Additional Paid-In Capital

 

Retained Deficit

 

Total Stockholders'

Investment (Deficit)

 

 

 

 

 

 

 

 

 

 

BALANCE, December 31, 2018

1,555,868

 

 

$

16

 

 

$

405,243

 

 

$

(457,414

)

 

$

(52,155

)

Issuance of restricted stock units, net of taxes paid

5,664

 

 

 

 

(8

)

 

 

 

(8

)

Issuance of common stock

36,000,000

 

 

360

 

 

449,640

 

 

 

 

450,000

 

Common stock issuance costs

 

 

 

 

(11,985

)

 

 

 

(11,985

)

Share-based compensation

 

 

 

 

1,599

 

 

 

 

1,599

 

Net loss

 

 

 

 

 

 

(26,999

)

 

(26,999

)

BALANCE, March 31, 2019

37,561,532

 

 

$

376

 

 

$

844,489

 

 

$

(484,413

)

 

$

360,452

 

Issuance of restricted stock units, net of taxes paid

75,590

 

 

 

 

(175

)

 

 

 

(175

)

Share-based compensation

 

 

 

 

3,069

 

 

 

 

3,069

 

Net loss

 

 

 

 

 

 

(141,949

)

 

(141,949

)

BALANCE, June 30, 2019

37,637,122

 

 

$

376

 

 

$

847,383

 

 

$

(626,362

)

 

$

221,397

 

Issuance of restricted stock units, net of taxes paid

4,622

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

 

3,208

 

 

 

 

3,208

 

Net loss

 

 

 

 

 

 

(97,751

)

 

(97,751

)

BALANCE, September 30, 2019

37,641,744

 

 

$

376

 

 

$

850,591

 

 

$

(724,113

)

 

$

126,854

 

 

Common Stock

 

 

 

 

 

 

(In thousands, except shares)

Shares

 

Amount

 

Additional Paid-In Capital

 

Retained Deficit

 

Total Stockholders'

Investment (Deficit)

 

 

 

 

 

 

 

 

 

 

BALANCE, December 31, 2017

1,536,925

 

 

$

15

 

 

$

403,535

 

 

$

(292,703

)

 

$

110,847

 

Issuance of restricted stock units, net of taxes paid

3,272

 

 

 

 

(75

)

 

 

 

(75

)

Share-based compensation

 

 

 

 

523

 

 

 

 

523

 

Cumulative effect of change in accounting principle

 

 

 

 

 

 

886

 

 

886

 

Net loss

 

 

 

 

 

 

(23,643

)

 

(23,643

)

BALANCE, March 31, 2018

1,540,197

 

 

$

15

 

 

$

403,983

 

 

$

(315,460

)

 

$

88,538

 

Issuance of restricted stock units, net of taxes paid

93

 

 

 

 

(1

)

 

 

 

(1

)

Share-based compensation

 

 

 

 

372

 

 

 

 

372

 

Net loss

 

 

 

 

 

 

(41,955

)

 

(41,955

)

BALANCE, June 30, 2018

1,540,290

 

 

$

15

 

 

$

404,354

 

 

$

(357,415

)

 

$

46,954

 

Issuance of restricted stock units, net of taxes paid

288

 

 

 

 

(5

)

 

 

 

(5

)

Share-based compensation

 

 

 

 

497

 

 

 

 

497

 

Net loss

 

 

 

 

 

 

(41,561

)

 

(41,561

)

BALANCE, September 30, 2018

1,540,578

 

 

$

15

 

 

$

404,846

 

 

$

(398,976

)

 

$

5,885

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

ROADRUNNER TRANSPORTATION SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

(In thousands)

Nine Months Ended

 

September 30,

 

2019

 

2018

Cash flows from operating activities:

 

 

 

Net loss

$

(266,699

)

 

$

(107,159

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation and amortization

46,365

 

 

28,358

 

Change in fair value of preferred stock

 

 

70,451

 

Amortization of preferred stock issuance costs

 

 

1,120

 

Loss on disposal of property and equipment

516

 

 

1,853

 

Share-based compensation

7,876

 

 

1,392

 

Loss on debt restructuring

2,270

 

 

 

Provision for bad debts

2,932

 

 

2,275

 

Deferred tax benefit

(1,332

)

 

(9,041

)

Impairment charges

158,923

 

 

 

Changes in:

 

 

 

Accounts receivable

47,945

 

 

34,556

 

Income tax receivable

1,635

 

 

3,557

 

Prepaid expenses and other assets

20,760

 

 

(13,754

)

Accounts payable

(32,835

)

 

(12,453

)

Accrued expenses and other liabilities

(31,097

)

 

(3,138

)

Net cash used in operating activities

(42,741

)

 

(1,983

)

Cash flows from investing activities:

 

 

 

Capital expenditures

(20,387

)

 

(16,922

)

Proceeds from sale of property and equipment

3,281

 

 

1,316

 

Net cash used in investing activities

(17,106

)

 

(15,606

)

Cash flows from financing activities:

 

 

 

Borrowings under revolving credit facilities

540,978

 

 

60,746

 

Payments under revolving credit facilities

(526,643

)

 

(85,655

)

Term debt borrowings

52,592

 

 

557

 

Term debt payments

(40,724

)

 

(16,285

)

Debt issuance costs

(2,029

)

 

 

Payments of debt extinguishment costs

(693

)

 

 

Proceeds from issuance of common stock

450,000

 

 

 

Common stock issuance costs

(10,514

)

 

 

Proceeds from issuance of preferred stock

 

 

34,999

 

Preferred stock issuance costs

 

 

(1,120

)

Preferred stock payments

(402,884

)

 

 

Issuance of restricted stock units, net of taxes paid

(183

)

 

(81

)

Proceeds from insurance premium financing

20,735

 

 

17,782

 

Payments on insurance premium financing

(12,221

)

 

(6,252

)

Payments of finance lease obligation

(13,921

)

 

(2,785

)

Net cash provided by financing activities

54,493

 

 

1,906

 

Net decrease in cash and cash equivalents

(5,354

)

 

(15,683

)

Cash and cash equivalents:

 

 

 

Beginning of period

11,179

 

 

25,702

 

End of period

$

5,825

 

 

$

10,019

 

ROADRUNNER TRANSPORTATION SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

 

 

Nine Months Ended

(In thousands)

September 30,

 

2019

 

2018

Supplemental cash flow information:

 

 

 

Cash paid for interest

$

12,933

 

 

$

7,436

 

Cash refunds from income taxes, net

$

(857

)

 

$

(1,329

)

Non-cash finance leases and other obligations to acquire assets

$

55,742

 

 

$

23,233

 

Capital expenditures, not yet paid

$

2,219

 

 

$

1,877

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

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