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Roadrunner Transportation Systems Files 2017 Annual Report on Form 10-K

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Roadrunner Transportation Systems, Inc. ("Roadrunner" or the "company")
(NYSE:RRTS), a leading asset-right transportation and asset-light
logistics service provider, announced it has filed its Annual Report on
Form 10-K for the year ended December 31, 2017. The company expects to
file its Quarterly Report on Form 10-Q for the period ended March 31,
2018 as soon as practical in the month of June.

2017 Results Summary

  • Revenues for the year ended December 31, 2017 were $2,091.3 million, a
    2.9% increase from revenues of $2,033.2 million for the year ended
    December 31, 2016. The increase was due to higher revenues in the
    company's Truckload Logistics ("TL") and Less-Than-Truckload ("LTL")
    segments, partially offset by lower Ascent Global Logistics ("Ascent")
    segment revenues which were largely due to the sale of Unitrans in
    September of 2017.
  • Operating loss was $36.5 million for the year ended December 31, 2017,
    compared to an operating loss of $403.8 million for the year ended
    December 31, 2016. The operating loss for 2017 included:
    • A 4.9% increase in purchased transportation costs to $1,430.4
      million in 2017 from $1,364.1 million in 2016.
    • A $35.4 million gain on the sale of Unitrans.
    • Restructuring and restatement costs of $32.3 million associated
      with legal, consulting and accounting matters, including internal
      and external investigations, SEC and accounting compliance, and
      restructuring.
    • Legal reserves of $5.7 million related primarily to recently
      settled independent contractor litigation and pre-divestiture
      litigation related to Unitrans.
    • Non-cash impairment charges of $4.4 million in 2017 related to the
      revaluation of the Ascent segment goodwill after the sale of
      Unitrans, compared to non-cash impairment charges of $373.7
      million in 2016.
  • Net loss was $91.2 million for the year ended December 31, 2017,
    compared to a net loss of $360.3 million for the year ended December
    31, 2016. In addition to the items listed above, the net loss in 2017
    was impacted by:
    • Issuance costs of $16.1 million associated with the sale of
      preferred stock in May 2017, which were reflected as interest
      expense.
    • Loss from debt extinguishment of $15.9 million, comprised of $9.8
      million from early debt repayment associated with the company's
      prior senior credit facility in May 2017 and early payment
      premiums on the redemption of preferred stock in Q3 2017 totaling
      $6.1 million.
  • Diluted loss per share available to common stockholders was $2.37 for
    the year ended December 31, 2017, compared to diluted loss per share
    of $9.40 for the year ended December 31, 2016.
  • Adjusted EBITDA, which is a non-GAAP financial measure, for the year
    ended December 31, 2017 was $5.0 million, compared to $7.8 million for
    the year ended December 31, 2016. Roadrunner's Adjusted EBITDA is
    calculated as follows:
      (in thousands)   2017   2016
 
Net loss $ (91,186) $ (360,320)
Plus: Total interest expense 64,049 22,827
Plus: Benefit from income taxes (25,191) (66,281)
Plus: Depreciation and amortization 37,747 38,145
Plus: Goodwill impairment charges 4,402 373,661
Plus: Long-term incentive compensation expenses 2,450 2,232
Plus: Adjustments to contingent purchase obligations - (2,458)
Plus: Gain on sale of Unitrans (35,440) -
Plus: Loss from debt extinguishments 15,876 -
Plus: Restructuring and restatement costs   32,321   -
Adjusted EBITDA $ 5,028 $ 7,806

For more information about Adjusted EBITDA, see "Non-GAAP Financial
Measures" below.

Segment Results for the Year Ended December 31,
2017

Segment results for the year ended December 31, 2017 compared to the
same period in 2016 are highlighted below:

  • TL revenues of $1,304.8 million in 2017 increased 4.7% from $1,246.8
    million in 2016. Operating income was $6.5 million in 2017, compared
    to an operating loss of $164.1 million in 2016. The operating loss in
    2016 included impairment charges of $159.1 million. Operating income
    in 2017 benefitted from lower bad debt expense, a decrease in losses
    on the sale of fixed assets, lower salaries and benefits, and lower
    equipment lease costs compared to 2016. The 2017 results were
    negatively impacted by increased fuel costs compared to 2016.
  • LTL revenues of $463.5 million in 2017 increased 0.4% from $461.5
    million in 2016. Operating loss was $26.4 million in 2017, compared to
    $203.6 million in 2016. The operating loss in 2016 included impairment
    charges of $197.3 million. Operating loss in 2017 included increased
    line-haul and other operating expenses (primarily increased bad debt
    expense and salaries and benefits) compared to 2016.
  • Ascent revenues of $328.3 million in 2017 decreased 2.1% from $335.5
    million in 2016. Operating income increased to $21.7 million in 2017
    from $8.1 million in 2016. Operating income included non-cash
    impairment charges of $4.4 million in 2017 and $17.2 million in 2016.
    Ascent's lower revenue in 2017 was impacted by the sale of Unitrans.

The company plans to change its reporting segments in 2018 to reflect
the impact of the Ascent Global Logistics integration announced on March
15, 2018.

"We are happy to complete our 2017 annual report, which gets us another
step closer to becoming current with our SEC reporting. Our 2017
Adjusted EBITDA results, which include final closing adjustments related
primarily to accrued expenses and accounts receivable reserves, fell
below 2016 Adjusted EBITDA. We expect to announce our results for the
first quarter of 2018 later this month, at which time we will hold an
investor conference call," said Curt Stoelting, Chief Executive Officer
of Roadrunner.

"Our teams continue to make progress on our strategies to fully
integrate, expand and improve our TL and Ascent segments. We remain
committed to investing in the long-term recovery of our LTL segment. At
the same time, we are investing in information technology upgrades,
working to improve internal controls and strengthening our foundation
for growth in 2018 and beyond. We are confident that these efforts will
position Roadrunner for long-term growth and shareholder value
creation," said Stoelting.

About Roadrunner Transportation Systems, Inc.

Roadrunner Transportation Systems is a leading asset-right
transportation and asset-light logistics service provider offering a
full suite of solutions under the Roadrunner®, Active On-Demand® and
Ascent Global Logistics® brands. The Roadrunner brand offers
less-than-truckload, temperature controlled and intermodal services.
Active On-Demand offers premium mission critical air and ground
transportation solutions. Ascent Global Logistics offers domestic
freight management, 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 the anticipated filing of
Roadrunner's Form 10-Q for the quarterly period ended March 31, 2018;
Roadrunner's strategies for long-term growth and shareholder value
creation; operating metric improvements within certain business units of
Roadrunner's TL and Ascent segments; Roadrunner's other operational
improvement strategies; and Roadrunner's ability to grow in 2018 and
beyond. 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, 2017. 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, losses from debt extinguishments, and
restructuring and restatements costs associated with legal matters
(including the company's internal investigation, SEC compliance and debt
restructuring costs and adjustments to contingent purchase obligations.)
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.

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