Roadrunner Transportation Systems released financial results for the third quarter that included a net loss of $41.6 million as the Downers Grove, Ill.-based company continues to battle back from an accounting scandal and the departure of several key executives, some of whom are now facing federal charges of securities fraud for misrepresenting the company’s finances to investors over several years.
Despite losing money in what is arguably the strongest freight environment in decades, Roadrunner CEO Curt Stoelting struck an optimistic tone in describing the company’s performance, noting that underlying trends in each of the company’s lines of business — truckload and express, less-than-truckload and air/expedited — are improving, and he expects the company to be profitable again in 2019.
“Overall, we are encouraged by our progress in the third quarter,” Stoelting said in a statement Nov. 6. “Our air and ground expedited freight and Ascent Global Logistics businesses continue to perform, [and] we continue to invest in these businesses to position them for future growth. We saw bottom-line improvement in our restructured temperature-controlled fleet and expect further improvements in future periods.”
Stoelting said the company is taking steps to improve poor results in its truckload business while its LTL business remains unprofitable.
Looking ahead, Stoelting said the company is projecting an increase in operating profits from between $20 million and $25 million in 2018 to more than $100 million in 2020.
Regarding litigation surrounding the misstatement of financial results from prior years, Stoelting said the company is “very close” to completing a global settlement that will have a negligible impact on the company’s financial condition. “This settlement will have a cash flow impact to the company of less than $2 million, which is a good outcome,” he noted. “And it will resolve a large uncertainty and allow our top management team to focus even more of our attention on operational versus legal matters.”
Overall, we are encouraged by our progress in the third quarter.
Roadrunner CEO Curt Stoelting
In the three months ended Sept. 30, Roadrunner’s net loss of $41.6 million, or $1.08 a share, compared with a net loss of $10.1 million, or 26 cents a share, in the same period a year ago. Total revenue increased 2.9% to $536.6 million in 2018 from $521.4 million in 2017.
Included in the quarterly results is a gain of $35.4 million on the sale of Unitrans Inc. to Quick International Courier in 2017, corporate restructuring and restatement costs of $6.8 million and noncash impairment charges of $4.4 million related to the revaluation of the Ascent business after the sale of Unitrans.
Breaking down results by sector, Roadrunner said the truckload and express business generated a loss of $800,000 on revenue of $280.3 million in the third quarter of 2018, compared with an operating loss of $1.7 million on revenue of $260.5 million a year ago.
LTL generated an operating loss of $5 million on revenue of $113.9 million, compared with a loss of $8.2 million on revenue of $117.6 million a year ago.
Air/expedited generated operating income of $7.5 million on revenue of $145.6 million, compared with operating income of $1.5 million on revenue of $145.3 million a year ago.
Year to date, Roadrunner reported net loss of $107.2 million, or $2.78 a share, on revenue of $1.66 billion, compared with a net loss of $67.9 million on revenue of $1.53 billion in 2017.
Roadrunner ranks No. 16 on the Transport Topics Top 100 list of largest for-hire carriers in North America.