Market Overview

Roadrunner Transportation Systems Reports Operating Results for Second Quarter and First Half of 2018

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  • Comparable revenue growth for the second quarter and the first half
    of 2018
  • Positive business trends in all segments, including sequential
    quarterly improvements in the Less-than-Truckload segment as
    turnaround investments continue
  • Strong top and bottom line comparable growth in Ascent Global
    Logistics segment
  • Truckload & Express Services segment continues strong revenue
    growth in ground and air expedited business while making structural
    improvements in temperature controlled, scheduled dry van and
    intermodal services

Roadrunner Transportation Systems, Inc. ("Roadrunner" or the "company")
(NYSE:RRTS), a leading asset-right transportation and asset-light
logistics service provider, today announced results for the second
quarter ended June 30, 2018 and the filing of its Quarterly Report on
Form 10-Q.

Second Quarter Financial Results

  • Revenues for the second quarter ended June 30, 2018 were $558.0
    million. Revenues for the quarter ended June 30, 2017 were $530.6
    million and included $23.1 million of revenues from Unitrans, which
    was successfully divested in September 2017. Excluding Unitrans from
    the prior year, comparable revenue increased by 10.0% in 2018.
  • Operating loss in the second quarter of 2018 was $11.4 million, which
    included operations and corporate restructuring and restatement costs
    of $8.6 million. Operating loss in the second quarter of 2017 was $7.5
    million, which included corporate restructuring and restatement costs
    of $9.1 million. Unitrans contributed $2.0 million of operating income
    in the second quarter of 2017.
  • Net loss increased to $42.0 million in the second quarter of 2018
    compared to $37.9 million in the second quarter of 2017. The increase
    was due primarily to higher interest costs related to the company's
    outstanding preferred stock and a lower income tax benefit, partially
    offset by the absence of a loss from debt extinguishment of $9.8
    million that occurred in the second quarter of 2017.
  • Diluted loss per share available to common stockholders was $1.09 for
    the second quarter of 2018, compared to diluted loss per share of
    $0.99 for the second quarter of 2017.
  • Adjusted EBITDA, excluding the impact of Unitrans in 2017, was $6.7
    million for the second quarter of 2018 compared to $9.1 million in the
    second quarter of 2017. The decline was due to corporate cost
    increases of $4.3 million in 2018, primarily due to higher information
    technology (IT) costs and professional fees related to the audit of
    our 2017 financial statements. Adjusted EBITDA for the quarters ended
    June 30, 2018 and 2017 was calculated as follows:
(In thousands)         Three Months Ended June 30, 2018
                    Corporate/      
TES LTL Ascent   Eliminations Total
Net (loss) income $ (758 ) $ (3,763 ) $ 7,285 $ (44,719 ) $ (41,955 )
Plus: Total interest expense 8 20 29 34,175 34,232
Plus: Benefit from income taxes (3,652 ) (3,652 )
Plus: Depreciation and amortization 6,241 900 1,168 815 9,124
Plus: Long-term incentive compensation expenses 426 426
Plus: Operations restructuring costs 4,655 4,655
Plus: Corporate restructuring and restatement costs    

  3,911   3,911  
Adjusted EBITDA $ 10,146   $ (2,843 ) $ 8,482   $ (9,044 ) $ 6,741  
 

(In thousands)

   

Three Months Ended June 30, 2017

            Corporate/     Less:   Total w/o
TES LTL Ascent Eliminations Total Unitrans Unitrans
Net (loss) income $ 3,475 $ (3,312 ) $ 7,181 $ (45,207 ) $ (37,863 ) $ 2,026 $ (39,889 )
Plus: Total interest expense (19 ) 48 36 28,290 28,355 28,355
Plus: Benefit from income taxes (7,812 ) (7,812 ) (7,812 )
Plus: Depreciation and amortization 6,197 953 1,631 429 9,210 295 8,915
Plus: Long-term incentive compensation expenses 659 659 659
Plus: Loss on debt extinguishments 9,827 9,827 9,827
Plus: Corporate restructuring and restatement costs       9,052   9,052     9,052  
Adjusted EBITDA $ 9,653   $ (2,311 ) $ 8,848   $ (4,762 ) $ 11,428   $ 2,321   $ 9,107  

Note: Adjusted EBITDA for the Ascent segment in the second quarter of
2017, excluding Unitrans, was $6.5 million.

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

Second Quarter Segment Results

The company's three reporting segments are: Truckload & Express Services
(TES), Less-than-Truckload (LTL) and Ascent Global Logistics (Ascent).
Segment results for the second quarter ended June 30, 2018 compared to
the same period in 2017 are highlighted below:

  • TES revenues of $300.0 million in the second quarter of 2018 increased
    14.1% from $262.8 million in 2017 due primarily to increased ground
    and air expedited freight and related brokerage, coupled with a strong
    demand environment which drove higher rates across most of the
    segment. Purchased transportation costs and yield were negatively
    impacted by capacity reductions in intermodal services and
    over-the-road operations, including dry van and temperature
    controlled. TES experienced an operating loss of $0.8 million in the
    second quarter of 2018, which included operations restructuring costs
    of $4.7 million related to fleet and facilities right-sizing and
    severance costs to complete the integration of temperature controlled.
    Adjusted EBITDA increased 5.1% to $10.1 million in the second quarter
    of 2018 from $9.7 million in the prior year. The increase in Adjusted
    EBITDA was the result of improved volume and rates, partially offset
    by increased purchased transportation, equipment lease, maintenance
    and IT costs.
  • LTL revenues of $117.2 million in the second quarter of 2018 decreased
    3.9% from $122.0 million in the second quarter of 2017 due to a
    decrease in shipping volumes, which was partially offset by higher
    fuel surcharges and rates. During the quarter, the company reduced
    selected service areas in order to eliminate unprofitable freight and
    focus on key lanes. LTL operating loss was $3.7 million in the second
    quarter of 2018, compared to $3.3 million in the second quarter of
    2017. Adjusted EBITDA loss in the second quarter of 2018 of $2.8
    million improved by $5.0 million from the Adjusted EBITDA loss in the
    first quarter of 2018 but declined when compared to the prior year
    second quarter Adjusted EBITDA loss of $2.3 million. The decrease in
    Adjusted EBITDA from the prior year was the result of lower shipping
    volumes and higher other operating expenses due to increased IT costs.
  • Ascent revenues of $144.6 million in the second quarter of 2018
    decreased from $148.1 million in the second quarter of 2017 due to the
    divestiture of Unitrans, which generated $23.1 million of revenue in
    the second quarter of 2017. Excluding Unitrans, Ascent revenue
    increased by 15.7% in 2018 due to higher revenue from domestic freight
    management (truckload and LTL brokerage) and retail consolidation
    (growth from existing and new customers). Operating income increased
    to $7.3 million in the second quarter of 2018 from $7.2 million in the
    second quarter of 2017, which included $2.0 million of operating
    income from Unitrans. Adjusted EBITDA, excluding Unitrans in 2017,
    increased 30.0% to $8.5 million in the second quarter of 2018 from
    $6.5 million in the prior year. The increase in Adjusted EBITDA was
    the result of improved performance driven by growth in retail
    consolidation and domestic freight management, partially offset by
    declines in international freight forwarding and increases in other
    operating expenses, including IT costs.

First Half Financial Results

  • Revenues for the first half of 2018 were $1,128.0 million. Revenues
    for the first half of 2017 were $1,009.5 million, which included $48.3
    million of revenue from Unitrans. As previously mentioned, Unitrans
    was successfully divested in September 2017. Excluding Unitrans from
    the prior year, comparable revenue increased by 17.4%.
  • Operating loss in the first half of 2018 was $24.8 million, which
    included operations and corporate restructuring and restatement costs
    of $15.5 million. Operating loss in the first half of 2017 was $25.4
    million, which included corporate restructuring and restatement costs
    of $16.8 million. Unitrans contributed $4.5 million of operating
    income in the first half of 2017.
  • Net loss increased to $65.6 million for the first half of 2018,
    compared to $57.8 million in the first half of 2017, due primarily to
    higher interest costs related to the company's outstanding preferred
    stock, partially offset by the absence of a loss from debt
    extinguishment of $9.8 million that occurred in the first half of 2017.
  • Diluted loss per share available to common stockholders was $1.70 for
    the first half of 2018, compared to diluted loss per share of $1.51
    for the first half of 2017.
  • Adjusted EBITDA, excluding the impact of Unitrans in 2017, was $9.9
    million for the first half of 2018 compared to $6.1 million in the
    first half of 2017. Adjusted EBITDA for the first half of 2018 and
    2017 was calculated as follows:
(In thousands)         Six Months Ended June 30, 2018
                  Corporate/      
TES LTL Ascent Eliminations Total
Net (loss) income $ 3,631 $ (12,483 ) $ 13,962 $ (70,708 ) $ (65,598 )
Plus: Total interest expense 19 56 59 43,641 43,775
Plus: Benefit from income taxes (2,982 ) (2,982 )
Plus: Depreciation and amortization 12,537 1,813 2,356 1,483 18,189
Plus: Long-term incentive compensation expenses 1,003 1,003
Plus: Operations restructuring costs 4,655 4,655
Plus: Corporate restructuring and restatement costs       10,824   10,824  
Adjusted EBITDA $ 20,842   $ (10,614 ) $ 16,377   $ (16,739 ) $ 9,866  
 
(In thousands)     Six Months Ended June 30, 2017
            Corporate/         Less:     Total w/o
TES LTL Ascent Eliminations Total Unitrans Unitrans
Net (loss) income $ 1,771 $ (6,111 ) $ 14,777 $ (68,243 ) $ (57,806 ) $ 4,453 $ (62,259 )
Plus: Total interest expense (36 ) 126 75 34,715 34,880 34,880
Plus: Benefit from income taxes (12,304 ) (12,304 ) (12,304 )
Plus: Depreciation and amortization 12,473 1,914 3,287 841 18,515 589 17,926
Plus: Long-term incentive compensation expenses 1,268 1,268 1,268
Plus: Loss on debt extinguishments 9,827 9,827 9,827
Plus: Corporate restructuring and restatement costs       16,750   16,750     16,750  
Adjusted EBITDA $ 14,208   $ (4,071 ) $ 18,139     $ (17,146 ) $ 11,130   $ 5,042   $ 6,088  

Note: Adjusted EBITDA for the Ascent segment for the six months ended
June 30, 2017, excluding Unitrans, was $13.1 million.

First Half Segment Results

Segment results for the first half of 2018 compared to the same period
in 2017 are highlighted below:

  • TES revenues of $626.1 million in the first half of 2018 increased
    27.7% from $490.3 million in the first half of 2017. The increase was
    due primarily to increased ground and air expedited freight and
    related brokerage coupled with a strong demand environment which drove
    higher rates across most of the segment. Purchased transportation
    costs and yield were negatively impacted by capacity reductions in
    intermodal services and over-the-road operations, including dry van
    and temperature controlled. TES operating income was $3.7 million in
    the first half of 2018, which included operations restructuring costs
    of $4.7 million related to fleet and facilities right-sizing and
    severance costs to complete the integration of temperature controlled.
    Adjusted EBITDA increased 46.7% to $20.8 million in the first half of
    2018 from $14.2 million in the prior year. The increase in Adjusted
    EBITDA was the result of improved volume and rates, partially offset
    by increased purchased transportation costs, equipment lease and
    maintenance expense, and IT costs.
  • LTL revenues of $230.3 million in the first half of 2018 decreased
    0.2% from $230.7 million in the first half of 2017 due to a decrease
    in shipping volumes, partially offset by higher fuel surcharges and
    rates. LTL operating loss was $12.4 million in the first half of 2018,
    compared to $6.0 million in the first half of 2017. Adjusted EBITDA
    loss in the first half of 2018 of $10.6 million declined when compared
    to the Adjusted EBITDA loss in first half of 2017 of $4.1 million. The
    decrease in Adjusted EBITDA was the result of lower shipping volumes;
    higher purchased transportation costs driven by market conditions
    resulting in rate increases from purchase power providers and higher
    spot prices paid to brokers which negatively impacted linehaul
    expense; and higher other operating expenses, including equipment
    lease, facility-related and bad debt expenses.
  • Ascent revenues of $279.6 million in the first half of 2018 decreased
    from $293.6 million in the first half of 2017 due to the divestiture
    of Unitrans, which generated $48.3 million of revenue in the first
    half of 2017. Excluding Unitrans, revenue increased by 14.0% in the
    first half of 2018 due to higher revenue from retail consolidation
    (growth from existing and new customers) and domestic freight
    management (truckload and LTL brokerage). Ascent operating income
    decreased to $14.0 million in the first half of 2018 from $14.9
    million in the first half of 2017, which included $4.5 million of
    operating income from Unitrans. Adjusted EBITDA, excluding Unitrans in
    2017, increased 25.0% to $16.4 million in the first half of 2018 from
    $13.1 million in the prior year. The increase in Adjusted EBITDA was
    the result of improved results driven by growth in retail
    consolidation and domestic freight management, partially offset by
    decreases in international freight forwarding and increases in other
    operating expenses, including IT costs.

Liquidity and Equipment Purchase Update

The company currently has approximately $40 million of available funds
for working capital and operating purposes from its existing borrowing
capacity under its ABL facility and standby commitment from its
preferred stock investor. The company is in compliance with its ABL and
preferred stock investment agreements. In addition, the company has
recently received approvals for equipment purchase financing from a
number of captive OEM tractor manufacturers and other lenders. These
commitments provide the opportunity for the company to replace aging
tractors and trailers and add capacity to its current fleet over the
next 12 months.

Discussion and Outlook

"We are happy to report our second quarter results on a timely basis.
Comparable second quarter and year-to-date operating results in our
Truckload & Express Services and Ascent segments improved in 2018 versus
2017 and sequential quarterly operating results in the LTL segment also
improved in the second quarter. Now that we are current with our SEC
filings and have positive momentum in operating results, we recently
announced that we are working with Barclays to identify the optimal
capital structure to support our long-term business plans," said Curt
Stoelting, Chief Executive Officer of Roadrunner.

"While we are experiencing strong revenue growth in Truckload & Express
Services driven primarily by our ground and air expedited business, we
are making structural changes to improve operations within this segment.
During the second quarter in temperature controlled, we completed the
previously announced restructuring, increased contract rates and
achieved improved operating results in June. We are currently making
structural changes in dry van and intermodal services, including
on-boarding new customers, adding capacity, increasing contract rates
and adjusting driver and independent contractor compensation and
retention programs. We expect these changes will begin to contribute to
our results in the second half of 2018 with larger benefits from the
full year impact in 2019."

"As part of our investment in turning around the LTL segment, we
expected to incur higher operating losses in the first quarter of 2018
than in the prior year. In the second quarter we began to see the
benefits from our LTL management team's efforts to enhance our freight
profile, increase the density within our key lanes, and improve our
operating metrics. By accelerating our focus on reducing our service
area and eliminating unprofitable freight, our second quarter 2018
revenue was lower than the prior year, while cost, yield and operating
trends all improved. We expect these changes, coupled with increased
freight density in key lanes, will result in improved operating trends
in the second half of 2018 compared to the first half."

"We continue to achieve strong comparable top and bottom-line results in
our Ascent Global Logistics segment. Our investments in people and IT
coupled with the integration work within this segment are expected to
continue to fuel growth and improved profitability in future periods. We
plan to continue to invest in IT enhancements and new capabilities
across all three segments. In addition, we are working to improve our
internal controls and strengthen our corporate support functions. The
improvements that we are implementing in our operational and corporate
structure are designed to support future growth and allow us to expand
operating margins."

Stoelting concluded, "Based on our longer-term business plans and focus
on driving sustainable returns on invested capital, the company expects
to achieve revenue of over $2.2 billion and Adjusted EBITDA of over $100
million by the end of 2020. This represents a 2020 target for Adjusted
EBITDA margin similar to the company's 2015 revenue and Adjusted EBITDA
of $2.0 billion and $93.6 million, respectively. We believe that the
structural changes currently being implemented will over time result in
profitability that is more resilient and better positions Roadrunner for
success throughout natural industry cycles."

Conference Call and Webcast

Roadrunner management will host a conference call to discuss the
company's results for the 2018 second quarter and year-to-date on
Wednesday, August 8, 2018 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 7472319. 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, August 15, 2018 and can be accessed by dialing
855-859-2056 (U.S.) or 404-537-3406 (International). Callers will be
prompted for passcode 7472319. 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
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 opportunity for
Roadrunner to replace aging tractors and trailers and add capacity to
its fleet over the next 12 months; Roadrunner's expectation that the
structural changes in dry van and intermodal services will begin to
contribute to its results in the second half of 2018, with larger
benefits from the full year impact in 2019; Roadrunner's expectation
that the changes in the LTL segment, coupled with increased freight
density in key lanes, will result in improved operating trends in the
second half of 2018 compared to the first half; Roadrunner's expectation
that its investments in people and IT and the integration work within
the Ascent Global Logistics segment will continue to fuel growth and
improved profitability in future periods; Roadrunner's expectation that
it will continue to invest in IT enhancements and new capabilities
across all three of its segments; the improvements in operational and
corporate structure, which are designed to support future growth and
allow Roadrunner to expand operating margins; Roadrunner's expectation
for revenue and Adjusted EBITDA by the end of 2020; Roadrunner's belief
that the structural changes being implemented will over time result in
profitability that is more resilient and better positions Roadrunner for
success throughout natural industry cycles. 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,
operations restructuring costs, corporate 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.

 
ROADRUNNER TRANSPORTATION SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 

(In thousands, except par value)

    June 30,     December 31,

 

2018 2017
ASSETS
Current assets:
Cash and cash equivalents $ 35,638 $ 25,702
Accounts receivable, net of allowances of $10,404 and $10,891,
respectively
293,038 321,629
Income tax receivable 13,838 14,749
Prepaid expenses and other current assets 27,819   36,306  
Total current assets 370,333   398,386  
Property and equipment, net of accumulated depreciation of
$118,064 and $107,037, respectively
163,440 159,547
Other assets:
Goodwill 264,826 264,826
Intangible assets, net 46,062 49,648
Other noncurrent assets 5,737   3,636  
Total other assets 316,625   318,110  
Total assets $ 850,398   $ 876,043  
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Current maturities of debt $ 10,012 $ 9,950
Accounts payable 148,053 171,905
Accrued expenses and other current liabilities 101,105   105,409  
Total current liabilities 259,170 287,264
Deferred tax liabilities 11,033 14,282
Other long-term liabilities 18,790 10,873
Long-term debt, net of current maturities 178,472 189,460
Preferred stock 335,979   263,317  
Total liabilities 803,444   765,196  

Commitments and contingencies

Stockholders' investment:
Common stock $.01 par value; 105,000 shares authorized; 38,507 and
38,423 shares issued and outstanding
385 384
Additional paid-in capital 403,984 403,166
Retained deficit (357,415 ) (292,703 )
Total stockholders' investment 46,954   110,847  
Total liabilities and stockholders' investment $ 850,398   $ 876,043  
 
ROADRUNNER TRANSPORTATION SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
(In thousands, except per share amounts)     Three Months Ended     Six Months Ended
June 30, June 30,
2018   2017 2018   2017
Revenues $ 558,026 $ 530,579 $ 1,128,010 $ 1,009,499
Operating expenses:
Purchased transportation costs 380,072 358,432 781,035 674,717
Personnel and related benefits 75,838 75,672 151,725 150,082
Other operating expenses 99,712 94,758 197,211 191,588
Depreciation and amortization 9,124 9,210 18,189 18,515
Operations restructuring costs 4,655     4,655    
Total operating expenses 569,401   538,072   1,152,815   1,034,902  
Operating loss (11,375 ) (7,493 ) (24,805 ) (25,403 )
Interest expense:
Interest expense - preferred stock 31,609 25,040 38,724 25,040
Interest expense - debt 2,623   3,315   5,051   9,840  
Total interest expense 34,232 28,355 43,775 34,880
Loss from debt extinguishment   9,827     9,827  
Loss before income taxes (45,607 ) (45,675 ) (68,580 ) (70,110 )
Benefit from income taxes (3,652 ) (7,812 ) (2,982 ) (12,304 )
Net loss $ (41,955 ) $ (37,863 ) $ (65,598 ) $ (57,806 )
Loss per share:
Basic $ (1.09 ) $ (0.99 ) $ (1.70 ) $ (1.51 )
Diluted $ (1.09 ) $ (0.99 ) $ (1.70 ) $ (1.51 )
Weighted average common stock outstanding:
Basic 38,507 38,412 38,479 38,389
Diluted 38,507 38,412 38,479 38,389
 
ROADRUNNER TRANSPORTATION SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
(In thousands)     Six Months Ended
June 30,
2018     2017
Cash flows from operating activities:
Net loss $ (65,598 ) $ (57,806 )
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 18,552 19,302
Change in fair value of preferred stock 37,663 8,928
Amortization of preferred stock issuance costs 1,061 16,112
Loss on disposal of property and equipment 1,972 492
Share-based compensation 895 1,268
Loss from debt extinguishment 9,827
Provision for bad debts 2,030 1,601
Deferred tax benefit (3,544 ) (13,904 )
Changes in:
Accounts receivable 27,156 (12,271 )
Income tax receivable 911 3,551
Prepaid expenses and other assets 6,900 3,438
Accounts payable (23,852 ) (20,883 )
Accrued expenses and other liabilities (5,052 ) 988  
Net cash used in operating activities (906 ) (39,357 )
Cash flows from investing activities:
Capital expenditures (11,391 ) (7,278 )
Proceeds from sale of property and equipment 927   1,970  
Net cash used in investing activities (10,464 ) (5,308 )
Cash flows from financing activities:
Borrowings under revolving credit facilities 63,368
Payments under revolving credit facilities (236,068 )
Debt borrowings 557
Debt payments (11,846 ) (277,750 )
Debt issuance cost (842 )
Cash collateralization of letters of credit (20,737 )
Payments of debt extinguishment costs (4,911 )
Preferred stock issuance costs (1,061 ) (16,112 )
Proceeds from issuance of preferred stock and warrants 34,999 540,500
Issuance of restricted stock units, net of taxes paid (76 ) (215 )
Payment of capital lease obligation (1,267 ) (2,415 )
Net cash provided by financing activities 21,306   44,818  
Net increase in cash and cash equivalents 9,936 153
Cash and cash equivalents:
Beginning of period 25,702   29,513  
End of period $ 35,638   $ 29,666  
Supplemental cash flow information:
Cash paid for interest $ 4,966 $ 9,727
Cash paid for (refunds from) income taxes, net $ 144 $ (2,426 )
Non-cash capital leases and other obligations to acquire assets $ 10,451 $
 

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