Roadrunner hits highs on TL, TMS

The asset-light trucking and logistics company saw a decrease in less-than-truckload revenues offset by pricing increases, while its truckload segment surpassed earnings and margins expectations.

   The asset-light trucking and third party logistics company Roadrunner Transportation Systems said Wednesday its second quarter operating profit rose 20 percent year-over-year to $32.4 million.
   Revenues in the quarter increased 12.5 percent to $517.9 million, while the company’s net income in the quarter rose 11.5 percent to $16.5 million.
   Included in those numbers was an increase in truckload and transportation management revenues, but a decrease in less-than-truckload revenues.
   “We were pleased that our TL and TMS segments once again had record operating income in the second quarter,” said Mark DiBlasi, president and chief executive officer of Roadrunner. “Our TL segment surpassed its previous quarterly record for operating income by 4.3 percent. Our TMS segment surpassed its previous quarterly record for operating income by 14.5 percent.
   “LTL revenues were impacted by a drop in fuel prices that resulted in a 32.2 percent decrease in fuel surcharge revenue and an 11.4 percent reduction in tonnage primarily due to changes in freight mix. These items were partially offset by an 11.2 percent increase in revenue per hundredweight excluding fuel from the prior year second quarter, due to improved pricing and positive freight mix changes as a result of our pricing initiatives,” said DiBlasi.
   The transportation and logistics research group at the investment bank Stifel said in an investor note Wednesday that Roadrunner surpassed its expectations for earnings and margins in its truckload segment.
   On the LTL side, Stifel said “smaller average shipment sizes were a common pattern in the LTL space in (second quarter) due to less heavier-weight truckload freight available in a more balanced freight market.”
   More than half of Roadrunner’s revenues are tied to truckload, while its LTL and transportation management services each account for between 20 and 25 percent of total revenues.
   Earlier this week, the company acquired El Paso, Texas-based Stagecoach Cartage for $35 million. Stifel said the deal was “a sign that acquisitions remain a part of the growth strategy, even if a smaller part than they were just a few years ago. The (mergers and acquisitions) pipeline remains full, but management is mindful to stay around (three times debt/earnings before interest, taxes, depreciation, and amortization, with the long-term goal around two times). This should significantly limit the size and number of future acquisitions, in our view, unless the company chooses to issue more equity.”
   Roadrunner’s first half operating profit increased 25.5 percent to $58 million on revenues that grew 19.6 percent to $1 billion after a difficult 2014.