Roadrunner Reports Net Loss in Fourth Quarter
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Roadrunner Transportation Systems Inc. reported a net loss in the fourth quarter and sharply lower revenue amid challenging market conditions.
At the same time, the carrier announced it planned to withdraw voluntarily its common stock from listing on the New York Stock Exchange and deregister from the reporting requirements of the Securities and Exchange Commission — strategic moves it said would reduce costs and increase management’s attention on improving operating performance.
The company said it expects to have its shares trade in over-the-counter markets.
For the quarter ended Dec. 31, Roadrunner posted a net loss of $74.2 million, or a diluted loss per share of $1.97, compared with a net loss of $58.4 million, or $37.32, in the 2018 period.
Revenue in the quarter fell 37% to $400.9 million compared with $551.5 million a year earlier.
“In the fourth quarter, we continued to face challenging market conditions, which hindered our operating performance,” Roadrunner CEO Curt Stoelting said in the earnings release. “Also in the fourth quarter, the company began to reduce corporate costs which we believe will have a positive impact on our future performance. We plan to continue to reduce corporate and overhead costs throughout 2020.”
The company attributed the lower revenue primarily to declines in air and ground expedited logistics at its Ascent On-Demand unit, as well as reduced shipment volumes and rates across its Ascent Transportation Management, less-than-truckload and truckload segments.
The quarterly results also were negatively impacted by the General Motors Co. strike, which reduced revenue in the Ascent OD and truckload segments by $26.7 million and $4.4 million, respectively. After the GM strike ended in late October, the company saw improved results in Ascent OD in November and December.
The net loss also was spurred by a decrease in interest expense of $30.9 million resulting from the redemption of preferred stock in the first quarter of 2019 and “an increased benefit from income taxes,” according to the Downers Grove, Ill.-based diversified motor carrier.
In the quarter, Roadrunner completed the sale of its Roadrunner intermodal services business to Universal Logistics Holdings Inc. for $51.3 million in cash, and recognized a gain of $20 million. It completed the sale of its flatbed business unit for $30 million and recognized a gain of $17.2 million.
In related news, the company on March 2 completed the sale of its Prime Distribution Services Inc. business to CH Robinson Worldwide Inc. for $225 million..
Meanwhile, the company intends to file on or about April 6 a Form 25 with the SEC to voluntarily withdraw and delist the company’s common stock from the NYSE. The company also intends to file on or about April 17 a Form 15 with the SEC to request deregistration from SEC reporting requirements. The company plans to file its annual report on Form 10-K for the fiscal year ended Dec. 31, 2019, prior to deregistering.
While continuing to qualify for listing on the NYSE, the company reported it made the decision to voluntarily deregister its shares because it has fewer than 300 stockholders of record and believes that it is in the best interest of the company’s stakeholders to reduce legal and administrative costs associated with being listed on the NYSE and complying with on-going SEC reporting requirements.
For the full year, the company posted a net loss of $340.9 million, or $10.62, compared with a net loss of $165.5 million, or $107.39, a year earlier. Revenue dropped to $1.8 billion compared with $2.2 billion a year earlier. Lower revenues in all operating segments contributed to the decrease.
Roadrunner Transportation Systems offers a suite of solutions under the Roadrunner and Ascent Global Logistics brands. The Roadrunner brand offers less-than-truckload and over-the-road truckload services. Ascent Global Logistics offers premium mission critical air and ground logistics solutions, domestic freight management and brokerage, international freight forwarding and customs brokerage.
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