Roadrunner Transportation Systems (NYSE: RRTS) released its delayed 2017 10-K report this week.
Earlier this week, FreightWaves reported that two former Roadrunner executives were charged with multiple crimes related to accounting and securities fraud in a federal indictment. In that article, which published two days before the company filed its 10-K, we mentioned that it had been issued an Oct. 3 filing deadline by the New York Stock Exchange.
That deadline applied to both Roadrunner’s 2017 10-K and required 2018 quarterly reports. While the company has filed its 10-K, it was not yet filed its 10-Q for the quarter ending March 31.
The company said it intends to publish the 10-Q report later this month.
“We are happy to complete our 2017 annual report, which gets us another step closer to becoming current with our SEC reporting,” Curt Stoelting, chief executive officer of Roadrunner, said. “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.”
A summary of information from the report is detailed below:
Climbing revenues
Roadrunner reported revenues of $2.09 billion for 2017, a 2.9 percent increase over 2016’s $2.03 billion.
The report attributes the increase to higher revenues in the company’s Truckload Logistics and Less-Than-Truckload segments, partially offset by lower Ascent Global Logistics segment revenues thanks to the sale of Unitrans in September.
Roadrunner’s revenues have climbed each year since 2013, when revenues came in at 1.36 billion.
Decreased operating loss
Roadrunner’s operating loss fell steeply from $403.8 million in 2016 to $36.5 million in 2017.
Restructuring and restatement expenses of $32.3 million contributed to the 2017 operating cost. The expenses include legal, consulting and accounting fees, including internal and external investigations, SEC and accounting compliance, and restructuring.
A release from Roadrunner summarizing the report also lists the following other factors as contributing to operating loss in 2017:
- A 4.9 percent increase in purchased transportation costs to $1.43 billion in 2017 from $1.36 billion in 2016.
- A $35.4 million gain on the sale of Unitrans.
- egal 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.
Shrinking net loss
While Roadrunner reported a net loss of $91.2 million for 2017, it was significantly smaller than the $360.3 million loss reported in 2016.
Roadrunner’s summary states 2017’s net loss was impacted by the following:
- 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.
Roadrunner’s net income dropped from $49 million to $25.62 million between 2013 and 2015. The company reported its first net loss of the five year period in 2016.
Diluted loss per share was $2.37 in 2017, down from $9.40 in 2016.
The company’s adjusted EBITDA was $5 million in 2017, down from $7.8 million in 2016.
Roadrunner’s stock has rebounded somewhat since the report was released. This comes after a significant drop earlier this week.
“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,” Stoelting said. “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.”
