Market Overview

Roadrunner Transportation Systems Reports Third Quarter 2019 Operating Results

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  • 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") (NYSE: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

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