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

August 8, 2018

DOWNERS GROVE, Ill.--(BUSINESS WIRE)--Aug 8, 2018--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:

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:

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