Document


 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
March 12, 2019
Date of report (Date of earliest event reported)
 
 
ROADRUNNER TRANSPORTATION SYSTEMS, INC.
(Exact Name of Registrant as Specified in Charter)
 
 
 
 
 
 
DELAWARE
 
001-34734
 
20-2454942
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
 
 
 
 
1431 Opus Place, Suite 530 Downers Grove, Illinois
 
 
 
60515
(Address of Principal Executive Offices)
 
 
 
(Zip Code)
(414) 615-1500
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
 
 
 
 
 







Item 2.02.
Results of Operations and Financial Condition.

 
 
 
We are furnishing this Current Report on Form 8-K in connection with the disclosure of information, in the form of the textual information from a press release issued on March 12, 2019.
The information in this Item 2.02 of this Current Report on Form 8-K (including the exhibit) is furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
We do not have, and expressly disclaim, any obligation to release publicly any updates or any changes in our expectations or any change in events, conditions, or circumstances on which any forward-looking statement is based.
The text included with this Current Report is available on our website located at www.rrts.com, although we reserve the right to discontinue that availability at any time.
Item 7.01.
Regulation FD Disclosure.

 
 
 
We are furnishing this Item 7.01 of this Current Report on Form 8-K in connection with the disclosure of information, in the form of the textual information from a PowerPoint presentation to be given during a conference call and webcast on March 12, 2019, at 10:00 a.m. Eastern Time. The PowerPoint presentation to be used for the conference call and webcast is attached to this Current Report on Form 8-K as Exhibit 99.2.
The information in this Item 7.01 of this Current Report on Form 8-K (including the exhibit) is furnished pursuant to Item 7.01 and shall not be deemed to be “filed” for the purpose of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. This Item 7.01 of this Current Report on Form 8-K will not be deemed an admission as the materiality of any information in this Item 7.01 that is required to be disclosed solely by Regulation FD.
The text included with this Item 7.01 of this Current Report on Form 8-K and the replay of the conference call and webcast will be available on our website located at www.rrts.com for seven days, although we reserve the right to discontinue that availability at any time.
Item 9.01.
Financial Statements and Exhibits.
 
 
 
 
(a)
Financial Statements of Business Acquired.
 
 
Not applicable.
 
(b)
Pro Forma Financial Information.
 
 
Not applicable.
 
(c)
Shell Company Transactions.
 
 
Not applicable.
 
(d)
Exhibits.
Exhibit
 
Number
 
 
 
 
99.1
99.2






SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
 
ROADRUNNER TRANSPORTATION SYSTEMS, INC.
 
 
 
 
 
 
 
Date: March 12, 2019
 
 
 
By:
/s/ Terence R. Rogers
 
 
 
 
 
Terence R. Rogers
 
 
 
 
 
Chief Financial Officer



rrtsq4andfullyear2018ear
Roadrunner Transportation Systems Reports Fourth Quarter and Full Year 2018 Operating Results • Revenue growth in full year 2018 • Adjusted EBITDA improvement in Q4 and full year 2018 • Continued progress on both operational and capital structure improvements • Positive financial outlook for 2019 and beyond Downers Grove, IL (BUSINESS WIRE) - March 12, 2019 -- 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 fourth quarter and year ended December 31, 2018 and the filing of its Annual Report on Form 10-K. Fourth Quarter Results Revenues for the fourth quarter ended December 31, 2018 were $551.5 million, a 1.6% decrease from revenues of $560.4 million for the fourth quarter ended December 31, 2017. Higher revenues in the Ascent Global Logistics (“Ascent”) segment were offset by declines in the Truckload & Express Services (“TES”) and Less-Than-Truckload (“LTL”) segments. • Revenue declines in TES resulted primarily from lower air and ground expedite brokerage at Active On-Demand compared to peak levels in the prior quarter, partially offset by revenue growth in over- the-road and intermodal services. • Revenue declines in LTL were a result of planned reductions in service areas and pricing discipline to drive more shipments into higher density lanes; lower shipment counts were partially offset by higher rates and average shipment size which yielded an increase in revenue per shipment. • Ascent revenues grew by 12.6% benefiting from growth in all three service offerings. International freight forwarding drove higher percentage growth due to higher rates and volumes, including some acceleration of shipments in anticipation of potential future tariff impacts. Operating loss in the fourth quarter of 2018 was $22.9 million, which included corporate restructuring and restatement costs of $6.7 million, non-cash fleet impairment charges in intermodal services of $1.6 million and a contingent purchase obligation adjustment of $1.8 million. Operating loss in the fourth quarter of 2017 was $22.3 million, which included corporate restructuring and restatement costs of $8.7 million and legal reserves of $5.7 million. Net loss increased to $58.4 million in the fourth quarter of 2018 compared to $23.3 million in the fourth quarter of 2017. The increase was due primarily to the items affecting operating loss discussed above and increased interest costs of $18.1 million related to the company’s preferred stock. Diluted loss per share available to common stockholders was $1.52 for the fourth quarter of 2018, compared to diluted loss per share of $0.61 for the fourth quarter of 2017.


 
Adjusted EBITDA for the fourth quarter of 2018 improved by $6.0 million to $2.9 million compared to a loss of $3.1 million for the fourth quarter of 2017. The improvement was due to higher Adjusted EBITDA in the LTL and Ascent segments and lower corporate costs in 2018. However, these improvements were partially offset by lower Adjusted EBITDA at TES which was negatively impacted by weak performance in dry van as well as softening trends in air and ground expedite, which offset improved performance in temperature controlled and flatbed. Adjusted EBITDA for the quarters ended December 31, 2018 and 2017 was calculated as follows: (In thousands) Three Months ended December 31, 2018 Corporate/ TES LTL Ascent Eliminations Total Net (loss) income $ (928) $ (9,454 ) $ 6,945 $ (55,001 ) $ (58,438 ) Plus: Total interest expense 162 29 23 37,125 37,339 Plus: Benefit from income taxes — — 2 (1,776) (1,774 ) Plus: Depreciation and amortization 9,814 1,165 1,510 2,475 14,964 Plus: Long-term incentive compensation expenses — — — 742 742 Plus: Corporate restructuring and restatement costs — — — 6,687 6,687 Plus: Fleet impairment charges 1,582 — — — 1,582 Plus: Adjustments for contingent purchase obligation — — — 1,840 1,840 Adjusted EBITDA $ 10,630 $ (8,260 ) $ 8,480 $ (7,908 ) $ 2,942 (In thousands) Three Months ended December 31, 2017 Corporate/ TES LTL Ascent Eliminations Total Net (loss) income $ 5,982 $ (12,256 ) $ 6,076 $ (23,129 ) $ (23,327 ) Plus: Total interest expense 7 32 33 18,595 18,667 Plus: Benefit from income taxes — — — (17,675) (17,765 ) Plus: Depreciation and amortization 6,577 1,515 1,208 613 9,913 Plus: Long-term incentive compensation expenses — — — 640 640 Plus: Corporate restructuring and restatement costs — — — 8,730 8,730 Adjusted EBITDA $ 12,566 $ (10,709 ) $ 7,317 $ (12,226 ) $ (3,052) (In thousands) Corporate/ TES LTL Ascent Eliminations Total Adjusted EBITDA Q4 2018 $ 10,630 $ (8,260) $ 8,480 $ (7,908) $ 2,942 Adjusted EBITDA Q4 2017 12,566 (10,709) 7,317 (12,226) (3,052) Adjusted EBITDA Improvement/ (Decline) $ (1,936) $ 2,449 $ 1,163 $ 4,318 $ 5,994 For more information about Adjusted EBITDA, see “Non-GAAP Financial Measures” below and the company’s SEC filings.


 
Full Year Results Revenues for the year ended December 31, 2018 were $2,216.1 million. Revenues for the year ended December 31, 2017 were $2,091.3 million, including $67.6 million of revenues from Unitrans which was divested in September of 2017. Excluding Unitrans, revenues grew 9.5%. Higher revenues in the TES and Ascent segments contributed to the increase, which were partially offset by lower revenue in the LTL segment. • Revenue increases of 13.2% in TES resulted primarily from higher rates across all businesses and strong volume increases in air and ground expedite at Active On-Demand. • Revenue declines in LTL were a result of planned reductions in service areas and pricing discipline to drive more shipments into higher density lanes; lower shipment counts were partially offset by higher rates and average shipment size which yielded an increase in revenue per shipment. • Ascent revenues, excluding Unitrans, grew by 14.0% benefitting from growth in all three service offerings; retail consolidation drove higher percentage growth due to new customer starts and increased volumes and rates from existing customers. Operating loss for the year ended December 31, 2018 was $58.5 million, which included corporate restructuring and restatement costs of $22.2 million, operations restructuring costs of $4.7 million, a contingent purchase obligation of $1.8 million and non-cash fleet impairment charges in intermodal services of $1.6 million. The operating loss for the year ended December 31, 2017 was $36.5 million, which included: • A gain on the sale of Unitrans of $35.4 million; • Corporate restructuring and restatement costs of $32.3 million; • Non-cash impairment charges of $4.4 million related to the revaluation of the Ascent segment goodwill after the sale of Unitrans; • Unitrans operating income of $5.8 million; and • Legal reserves of $5.7 million. Net loss increased to $165.6 million for the year ended December 31, 2018, compared to $91.2 million for the year ended December 31, 2017, due primarily to the items affecting operating loss discussed above, increased interest costs of $56.0 million related to the company’s preferred stock and a lower federal tax rate. These increases were partially offset by lower bank debt interest costs and the absence of a loss from debt extinguishment of $15.9 million that occurred in 2017. Diluted loss per share available to common stockholders was $4.30 for the year ended December 31, 2018, compared to diluted loss per share of $2.37 for the year ended December 31, 2017. Adjusted EBITDA improved by $18.8 million to $17.3 million for the year ended December 31, 2018 compared to an Adjusted EBITDA loss, excluding the impact of Unitrans, of $1.6 million for the year ended December 31, 2017. The improvement was due to higher Adjusted EBITDA in the TES and Ascent segments and lower corporate costs in 2018, partially offset by lower Adjusted EBITDA at LTL. Adjusted EBITDA for 2018 and 2017 was calculated as follows:


 
(In thousands) Year ended December 31, 2018 Corporate/ TES LTL Ascent Eliminations Total Net (loss) income $ 1,782 $ (27,009 ) $ 28,226 $ (168,596 ) $ (165,597 ) Plus: Total interest expense 315 117 108 116,372 116,912 Plus: Benefit from income taxes — — 131 (9,945) (9,814 ) Plus: Depreciation and amortization 28,807 3,854 5,049 5,057 42,767 Plus: Long-term incentive compensation expenses — — — 2,696 2,696 Plus: Corporate restructuring and restatement costs — — — 22,224 22,224 Plus: Operations restructuring costs 4,655 — — — 4,655 Plus: Fleet impairment charges 1,582 — — — 1,582 Plus: Adjustments for contingent purchase obligation — — — 1,840 1,840 Adjusted EBITDA $ 37,141 $ (23,038 ) $ 33,514 $ (30,352 ) $ 17,265 (In thousands) Year ended December 31, 2017 Corporate/ Less: Total w/o TES LTL Ascent Eliminations Total Unitrans Unitrans Net (loss) income $ 6,033 $ (26,578 ) $ 22,350 $ (92,991 ) $ (91,186 ) $ 3,497 $ (94,683 ) Plus: Total interest expense (44 ) 195 143 63,755 64,049 — 64,049 Plus: Benefit from income taxes — — — (25,191 ) (25,191 ) 2,295 (27,486 ) Plus: Depreciation and amortization 25,535 4,353 5,965 1,894 37,747 819 36,928 Plus: Goodwill impairment charges — — 4,402 — 4,402 — 4,402 Plus: Long-term incentive compensation expenses — — — 2,450 2,450 — 2,450 Plus: Gain on sale of Unitrans — — — (35,440 ) (35,440 ) — (35,440 ) Plus: Loss on debt extinguishments — — — 15,876 15,876 — 15,876 Plus: Corporate restructuring and restatement costs — — — 32,321 32,321 — 32,321 Adjusted EBITDA $ 31,524 $ (22,030 ) $ 32,860 $ (37,326 ) $ 5,028 $ 6,611 $ (1,583 ) Note: Adjusted EBITDA for the Ascent segment for the year ended December 31, 2017, excluding Unitrans, was $26.2 million. (In thousands) Corporate/ TES LTL Ascent Eliminations Total Adjusted EBITDA FY 2018 $ 37,141 $ (23,038) $ 33,514 $ (30,352) $ 17,265 Adjusted EBITDA FY 2017 31,524 (22,030) 26,249 (37,326) (1,583) Adjusted EBITDA Improvement/(Decline) $ 5,617 $ (1,008) $ 7,265 $ 6,974 $ 18,848 Note: Adjusted EBITDA for the Ascent segment for 2017 excludes Unitrans. Rights Offering, Debt Refinancing and Increased Liquidity On February 26, 2019, the company completed the previously announced fully backstopped $450 million rights offering. The net proceeds from the rights offering and backstop commitment were used to fully redeem the outstanding shares of the company’s preferred stock, to pay related accrued and unpaid dividends and to add over $30 million of cash for working capital and general corporate purposes. On February 28, 2019, the company refinanced its asset-based lending (“ABL”) facility. The new ABL facility consists of a $200.0 million asset-based revolving line of credit. Also on February 28, 2019, the


 
company entered into a new term loan credit agreement (“Term Loan”). The Term Loan proceeds of $51.1 million were used to repay in full the previous term loan and provide cash for general corporate purposes. After completing the rights offering and the debt refinancing, the company has increased funds available for working capital, operating activities and equipment procurement purposes. The new ABL and Term Loan facilities mature on February 28, 2024. CEO Comments “Overall we made good progress in 2018 on a number of fronts. Operationally, over two-thirds of our businesses are now stable and growing. Ascent Global Logistics and Active On-Demand have led the way followed by our temperature controlled, intermodal services and flatbed businesses, all of which achieved improved stability 2018 and are positioned for growth in 2019,” said Curt Stoelting, Chief Executive Officer of Roadrunner. Stoelting continued, “We are disappointed in the short-term performance of our dry van truckload fleets and are actively developing plans to streamline these businesses. Lastly, we continue to make steady progress and improvements in our LTL segment where we reduced our operating losses in the fourth quarter versus the prior year quarter and continued to see operational benefits from eliminating selected service areas, improving our freight and lane mix and lowering our operating costs. We believe improving our dry van businesses and LTL segment will add significant value to Roadrunner.” “With the recent completion of the rights offering and debt refinancing, we now have the capital structure to fully support our long-term business plans which we believe will increase the speed and likelihood of a full operational recovery followed by additional growth and optimization opportunities,” Stoelting added. Financial Outlook The company has longer-term business goals to deliver higher levels of profitability and sustainable returns on invested capital. The company expects to increase its Adjusted EBITDA in 2019 with improvements in all three segments. Over the longer-term, the company expects that segment margins will increase to be in-line with peer group margins and that the structural changes currently being implemented will result in profitability that is more resilient and better positions Roadrunner for success throughout natural industry cycles. Conference Call and Webcast Roadrunner management will host a conference call to discuss the company’s results for the year ended December 31, 2018 on Tuesday, March 12, 2019 at 10:00 a.m. Eastern Time. To access the conference call, please dial 866-763-0340 (U.S.) or 703-871-3799 (International) approximately 10 minutes prior to the start of the call. Callers will be prompted for passcode 5995447. Presentation materials and a live webcast of the call can be accessed on the “events and presentations” page in the Investor Relations section of Roadrunner's website, www.rrts.com. The conference call may include forward-looking statements. If you are unable to listen to the live call, a replay will be available through Tuesday, March 19, 2019 and can be accessed by dialing 855-859-2056 (U.S.) or 404-537-3406 (International). Callers will be prompted for passcode 5995447. An archived version of the webcast will also be available for a period of time under the Investor Relations section of Roadrunner's website, www.rrts.com.


 
About Roadrunner Transportation Systems, Inc. Roadrunner Transportation Systems is a leading asset-right transportation and asset-light logistics service provider offering a full suite of solutions under the Roadrunner®, Active On-Demand® and Ascent Global Logistics® brands. The Roadrunner brand offers less-than-truckload, temperature controlled and intermodal services. Active On-Demand offers premium mission critical air and ground transportation solutions. Ascent Global Logistics offers domestic freight management, retail consolidation, international freight forwarding and customs brokerage. For more information, please visit Roadrunner’s websites, www.rrts.com and www.ascentgl.com. Safe Harbor Statement This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which relate to future events or performance. Forward-looking statements include, among others, statements regarding Roadrunner’s outlook for 2019 and beyond; the impact of potential future tariffs; the growth of over two-thirds of Roadrunner’s businesses; Roadrunner’s plan to continue investing in its Ascent Global Logistics, Active On-Demand, temperature controlled, intermodal services and flatbed businesses to position them for future profitable growth; Roadrunner’s development of plans to streamline its drive van truckload fleets; Roadrunner’s steady progress and improvements in its LTL segment; the significant value to Roadrunner to improve its dry van business and LTL segment; Roadrunner’s capital structure following its rights offering and debt refinancing and its ability to fully support Roadrunner’s long-term business plans which Roadrunner believes will increase the speed and likelihood of a full operational recovery followed by additional growth and optimization opportunities; Roadrunner’s longer-term business goals to deliver higher levels of profitability and sustainable returns on invested capital; Roadrunner’s expectation for its 2019 Adjusted EBITDA, including its expected improvements in all three segments; and Roadrunner’s expectation that its segment margins will increase to be in-line with peer group margins and that the structural changes currently being implemented will result in profitability that is more resilient and better positions Roadrunner for success throughout natural industry cycles. These statements are often, but not always, made through the use of words or phrases such as “may,” “will,” “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “predict,” “potential,” “opportunity,” and similar words or phrases or the negatives of these words or phrases. These forward-looking statements are based on Roadrunner’s current assumptions, expectations and beliefs and are subject to substantial risks, estimates, assumptions, uncertainties and changes in circumstances that may cause Roadrunner’s actual results, performance or achievements to differ materially from those expressed or implied in any forward- looking statement. Such factors include, among others, risks related to the restatement of Roadrunner’s previously issued financial statements, the remediation of Roadrunner’s identified material weaknesses in its internal control over financial reporting, the litigation resulting from the restatement of Roadrunner’s previously issued financial statements and the other risk factors contained in Roadrunner’s SEC filings, including Roadrunner’s Annual Report on Form 10-K for the year ended December 31, 2018. Because the risks, estimates, assumptions and uncertainties referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date hereof, and, except as required by law, Roadrunner assumes no obligation and does not intend to update any forward-looking statement to reflect events or circumstances after the date hereof.


 
Non-GAAP Financial Measures EBITDA represents earnings before interest, taxes, depreciation and amortization. Roadrunner calculates Adjusted EBITDA as EBITDA excluding impairment and other non-cash gains and losses, other long-term incentive compensation expenses, losses from debt extinguishments, corporate restructuring and restatement costs associated with legal matters (including the company’s internal investigation, SEC compliance and debt restructuring costs), operations restructuring costs, and adjustments to contingent purchase obligations. Roadrunner uses Adjusted EBITDA as a supplemental measure in evaluating its operating performance and when determining executive incentive compensation. Roadrunner believes Adjusted EBITDA is useful to investors in evaluating its performance compared to other companies in its industry because it assists in analyzing and benchmarking the performance and value of a business. The calculation of Adjusted EBITDA eliminates the effects of financing, income taxes and the accounting effects of capital spending. These items may vary for different companies for reasons unrelated to the overall operating performance of a company’s business. Adjusted EBITDA is not a financial measure presented in accordance with GAAP. Although Roadrunner’s management uses Adjusted EBITDA as a financial measure to assess the performance of its business compared to that of others in Roadrunner’s industry, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of Roadrunner’s results as reported under GAAP. Some of these limitations are: • Adjusted EBITDA does not reflect Roadrunner’s cash expenditures, future requirements for capital expenditures or contractual commitments; • Adjusted EBITDA does not reflect changes in, or cash requirements for, Roadrunner’s working capital needs; • Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on Roadrunner’s debt or dividend payments on Roadrunner’s preferred stock; • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and • Other companies in Roadrunner’s industry may calculate Adjusted EBITDA differently than Roadrunner does, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered a measure of discretionary cash available to Roadrunner to invest in the growth of the company’s business. Roadrunner compensates for these limitations by relying primarily on Roadrunner’s results of operations under GAAP. ### Contact: Reputation Partners Megan Hakes 414-376-3080 ir@rrts.com


 
ROADRUNNER TRANSPORTATION SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS December 31, (In thousands, except par value) 2018 2017 ASSETS Current assets: Cash and cash equivalents $ 11,179 $ 25,702 Accounts receivable, net of allowances of $9,980 and $10,891, respectively 274,843 321,629 Income tax receivable 3,910 14,749 Prepaid expenses and other current assets 61,106 36,306 Total current assets 351,038 398,386 Property and equipment, net of accumulated depreciation of $130,077 and $107,037, respectively 188,706 159,547 Other assets: Goodwill 264,826 264,826 Intangible assets, net 42,526 49,648 Other noncurrent assets 6,361 3,636 Total other assets 313,713 318,110 Total assets $ 853,457 $ 876,043 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) INVESTMENT Current liabilities: Current maturities of debt $ 13,171 $ 9,950 Current capital lease obligation 13,229 2,397 Accounts payable 160,242 171,905 Accrued expenses and other current liabilities 110,943 103,012 Total current liabilities 297,585 287,264 Deferred tax liabilities 3,953 14,282 Other long-term liabilities 7,857 3,705 Long-term debt, net of current maturities 155,596 189,460 Long-term capital lease obligation 37,737 7,168 Preferred stock 402,884 263,317 Total liabilities 905,612 765,196 Commitments and contingencies Stockholders' (deficit) investment: Common stock $.01 par value; 105,000 shares authorized; 38,897 and 38,423 shares issued and outstanding, respectively 389 384 Additional paid-in capital 404,870 403,166 Retained deficit (457,414 ) (292,703 ) Total stockholders’ (deficit) investment (52,155 ) 110,847 Total liabilities and stockholders' investment $ 853,457 $ 876,043


 
ROADRUNNER TRANSPORTATION SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31, (In thousands, except per share amounts) 2018 2017 2016 Revenues $ 2,216,141 $ 2,091,291 $ 2,033,200 Operating expenses: Purchased transportation costs 1,518,415 1,430,378 1,364,055 Personnel and related benefits 309,753 296,925 286,134 Other operating expenses 397,468 393,731 374,979 Depreciation and amortization 42,767 37,747 38,145 Gain from sale of Unitrans — (35,440 ) — Impairment charges 1,582 4,402 373,661 Operations restructuring costs 4,655 — — Total operating expenses 2,274,640 2,127,743 2,436,974 Operating loss (58,499 ) (36,452 ) (403,774 ) Interest expense Interest expense - preferred stock 105,688 49,704 — Interest expense - debt 11,224 14,345 22,827 Total interest expense 116,912 64,049 22,827 Loss from debt extinguishment — 15,876 — Loss before income taxes (175,411 ) (116,377 ) (426,601 ) Benefit from income taxes (9,814 ) (25,191 ) (66,281 ) Net loss $ (165,597 ) $ (91,186 ) $ (360,320 ) Loss per share: Basic $ (4.30 ) $ (2.37 ) $ (9.40 ) Diluted $ (4.30 ) $ (2.37 ) $ (9.40 ) Weighted average common stock outstanding: Basic 38,552 38,405 38,318 Diluted 38,552 38,405 38,318


 
ROADRUNNER TRANSPORTATION SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2018 2017 2016 Cash flows from operating activities: Net loss $ (165,597) $ (91,186 ) $ (360,320 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 43,547 38,880 40,720 Loss on disposal of property and equipment 3,212 1,637 4,144 Gain on sale of business — (35,440 ) (5,416 ) Share-based compensation 1,786 2,233 2,232 Change in fair value of preferred stock 104,568 18,387 — Amortization of preferred stock issuance costs 1,120 16,112 — Loss from debt extinguishment — 15,876 — Adjustments to contingent purchase obligations 1,840 — (2,458 ) Provision for bad debts 3,479 5,964 5,127 Deferred tax benefit (10,624 ) (27,066 ) (43,441 ) Impairment charges 1,582 4,402 373,661 Changes in (net of acquisitions): Accounts receivable 43,902 (70,171 ) (18,020 ) Income taxes receivable 9,935 26,017 (20,103 ) Prepaid expenses and other assets (26,052 ) (753 ) 8,152 Accounts payable (12,291 ) 28,960 32,901 Accrued expenses and other liabilities 5,187 20,596 11,675 Net cash provided by (used in) operating activities 5,594 (45,552 ) 28,854 Cash flows from investing activities: Capital expenditures (25,495 ) (14,517 ) (17,573 ) Proceeds from sale of property and equipment 2,780 3,636 6,980 Proceeds from sale of business — 88,512 1,000 Net cash (used in) provided by investing activities (22,715 ) 77,631 (9,593 ) Cash flows from financing activities: Borrowings under revolving credit facilities 695,751 264,405 292,124 Payments under revolving credit facilities (708,256 ) (290,068 ) (262,573 ) Debt borrowings 557 56,927 — Debt payments (19,082 ) (278,819 ) (18,500 ) Debt issuance cost (373 ) (4,672 ) (871 ) Cash collateralization of letters of credit — (175 ) — Payment of debt extinguishment costs — (10,960 ) — Payments of contingent purchase obligations — — (2,455 ) Preferred stock issuance costs (1,120 ) (16,112 ) — Proceeds from issuance of preferred stocks and warrants 34,999 540,500 — Preferred stock payments — (293,000 ) — Proceeds from exercise of stock warrants 4 — — Issuance of restricted stock units, net of taxes paid (81 ) (239 ) (303 ) Proceeds from insurance premium financing 17,782 — — Payments on insurance premium financing (12,133 ) — — Reduction of capital lease obligation (5,450 ) (3,677 ) (5,100 ) Net cash provided by (used in) financing activities 2,598 (35,890 ) 2,322 Net (decrease) increase in cash and cash equivalents (14,523 ) (3,811 ) 21,583 Cash and cash equivalents: Beginning of period 25,702 29,513 7,930 End of period $ 11,179 $ 25,702 $ 29,513


 
ROADRUNNER TRANSPORTATION SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (In thousands) Year Ended December 31, 2018 2017 2016 Supplemental cash flow information: Cash paid for interest $ 10,408 $ 28,129 $ 19,473 Cash refunds from income taxes, net $ (9,597 ) $ (25,254 ) $ (3,943 ) Non-cash sale of business $ — $ — $ 3,860 Non-cash capital leases and other obligations to acquire assets $ 46,973 $ 7,193 $ — Capital expenditures, not yet paid $ 628 $ — $ —


 
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ROADRUNNER TRANSPORTATION SYSTEMS Q4 and Full Year 2018 Management Call YOUR GOODS. OUR BEST. YOUR GOODS. OUR BEST.


 
SAFE HARBOR STATEMENT This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which relate to future events or performance. Forward-looking statements include, among others, statements regarding Roadrunner’s outlook for 2019 and beyond; the impact of potential future tariffs; the growth of over two-thirds of Roadrunner’s businesses; Roadrunner’s plan to continue investing in its Ascent Global Logistics, Active On-Demand, temperature controlled, intermodal services and flatbed businesses to position them for future profitable growth; Roadrunner’s development of plans to streamline its drive van truckload fleets; Roadrunner’s steady progress and improvements in its LTL segment; the significant value to Roadrunner to improve its dry van business and LTL segment; Roadrunner’s capital structure following its rights offering and debt refinancing and its ability to fully support Roadrunner’s long-term business plans which Roadrunner believes will increase the speed and likelihood of a full operational recovery followed by additional growth and optimization opportunities; Roadrunner’s longer-term business goals to deliver higher levels of profitability and sustainable returns on invested capital; Roadrunner’s expectation for its 2019 Adjusted EBITDA, including its expected improvements in all three segments; and Roadrunner’s expectation that its segment margins will increase to be in-line with peer group margins and that the structural changes currently being implemented will result in profitability that is more resilient and better positions Roadrunner for success throughout natural industry cycles. These statements are often, but not always, made through the use of words or phrases such as “may,” “will,” “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “predict,” “potential,” “opportunity,” and similar words or phrases or the negatives of these words or phrases. These forward-looking statements are based on Roadrunner’s current assumptions, expectations and beliefs and are subject to substantial risks, estimates, assumptions, uncertainties and changes in circumstances that may cause Roadrunner’s actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement. Such factors include, among others, risks related to the restatement of Roadrunner’s previously issued financial statements, the remediation of Roadrunner’s identified material weaknesses in its internal control over financial reporting, the litigation resulting from the restatement of Roadrunner’s previously issued financial statements and the other risk factors contained in Roadrunner’s SEC filings, including Roadrunner’s Annual Report on Form 10-K for the year ended December 31, 2018. Because the risks, estimates, assumptions and uncertainties referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date hereof, and, except as required by law, Roadrunner assumes no obligation and does not intend to update any forward-looking statement to reflect events or circumstances after the date hereof. YOUR GOODS. OUR BEST. 2


 
INFORMATION ABOUT ADJUSTED EBITDA EBITDA represents earnings before interest, taxes, depreciation and amortization. Roadrunner calculates Adjusted EBITDA as EBITDA excluding impairment and other non-cash gains and losses, other long-term incentive compensation expenses, losses from debt extinguishments, operations restructuring costs, and corporate restructuring and restatement costs associated with legal matters (including the company’s internal investigation, SEC compliance and debt restructuring costs). Roadrunner uses Adjusted EBITDA as a supplemental measure in evaluating its operating performance and when determining executive incentive compensation. Roadrunner believes Adjusted EBITDA is useful to investors in evaluating its performance compared to other companies in its industry because it assists in analyzing and benchmarking the performance and value of a business. The calculation of Adjusted EBITDA eliminates the effects of financing, income taxes and the accounting effects of capital spending. These items may vary for different companies for reasons unrelated to the overall operating performance of a company’s business. Adjusted EBITDA is not a financial measure presented in accordance with GAAP. Although Roadrunner’s management uses Adjusted EBITDA as a financial measure to assess the performance of its business compared to that of others in Roadrunner’s industry, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of Roadrunner’s results as reported under GAAP. Some of these limitations are: • Adjusted EBITDA does not reflect Roadrunner’s cash expenditures, future requirements for capital expenditures or contractual commitments; • Adjusted EBITDA does not reflect changes in, or cash requirements for, Roadrunner’s working capital needs; • Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on Roadrunner’s debt or dividend payments on Roadrunner’s preferred stock; • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and • Other companies in Roadrunner’s industry may calculate Adjusted EBITDA differently than Roadrunner does, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered a measure of discretionary cash available to Roadrunner to invest in the growth of the company’s business. Roadrunner compensates for these limitations by relying primarily on Roadrunner’s results of operations under GAAP. YOUR GOODS. OUR BEST. 3


 
AGENDA 1. Opening Comments 2. 2018 Fourth Quarter & Full Year Financial Results 3. Q4 Business Trends 4. Business Improvements & Financial Outlook 5. Question & Answer YOUR GOODS. OUR BEST. 4


 
OPENING COMMENTS Revenue growth in full year 2018 Adjusted EBITDA improvement in Q4 and full year 2018 Progress on both operational and capital structure improvements • Operationally -- majority of our businesses are stable and growing • Rights offering and debt restructuring completed in Feb. 2019 Positive financial outlook for 2019 and beyond YOUR GOODS. OUR BEST. 5


 
Fourth Quarter 2018 Results YOUR GOODS. OUR BEST. 6


 
SUMMARY OF Q4 2018 RESULTS Financial Summary Revenues were $551.5 million in Q4 2018, a 1.6% decrease from revenues of $560.4 million in Q4 2017 • Higher revenues in the Ascent Global Logistics (“Ascent”) segment were offset by declines in the Truckload & Express Services (“TES”) and Less- Than-Truckload (“LTL”) segments. • Revenue declines in TES resulted primarily from lower air and ground expedite brokerage at Active On-Demand compared to peak levels in the prior year, partially offset by revenue growth in over-the-road and intermodal services. • Revenue declines in LTL were a result of planned reductions in service areas and pricing discipline to drive more shipments into higher density lanes; lower shipment counts were partially offset by higher rates and average shipment size which yielded an increase in revenue per shipment. • Ascent revenues grew by 12.6% benefiting from growth in all three service offerings. International freight forwarding drove higher percentage growth due to higher rates and volumes, including some acceleration of shipments in anticipation of potential future tariff impacts. Operating loss of $22.9 million in Q4 2018 vs. operating loss of $22.3 million in Q4 2017 • Includes corporate restructuring and restatement costs of $6.7 million, non-cash fleet impairment charges in intermodal services of $1.6 million and a contingent purchase obligation of $1.8 million. Net loss of $58.4 million in Q4 2018 vs. $23.3 million in Q4 2017 • Increase due primarily to the items affecting operating loss discussed above and increased interest costs of $18.1 million related to the company’s preferred stock. Diluted loss per share available to common stockholders of $1.52 in Q4 2018, compared to $0.61 in Q4 2017 Adjusted EBITDA improved by $6.0 million to $2.9 million in Q4 2018 vs. a loss of $3.1 million in Q4 2017 • Improvement due to higher Adjusted EBITDA in the LTL and Ascent segments and lower corporate costs in 2018. • Partially offset by lower Adjusted EBITDA at TES. YOUR GOODS. OUR BEST. 7


 
ADJUSTED EBITDA Fourth Quarter 2018 vs. 2017 (In thousands) (In thousands) Three MonthsThree ended Months December ended 31, December2018 31, 2018 Corporate/ Corporate/ TES TESLTL LTLAscent EliminationsAscent EliminationsTotal Total Net (loss) incomeNet (loss) income $ (928) $ $ (928)(9,45 4 ) $ $ (96,45,9454 ) $ $ (65,5945,00 1 )$ $ (5(5,800,431 )8 ) $ (58,438 ) Plus: Total interestPlus: expense Total interest expense 162 16229 2923 37,23125 3737,125,339 37,339 Plus: Benefit fromPlus: income Benefit taxes from income taxes — —— —2 (1,7762 ) (1,(1,776774) ) (1,774 ) Plus: DepreciationPlus: and Depreciation amortization and amortization 9,814 9,8141,165 11,510,165 1,5102,475 214,475,964 14,964 Plus: Long-termPlus: incentive Long- termcompensation incentive expensescompensation expenses — —— —— —742 742742 742 Plus: CorporatePlus: restructuring Corporate and restructuring restatement and costs restatement costs — —— —— 6,687— 6,6876,687 6,687 Plus: Fleet impairmentPlus: Fleet charges impairment charges 1,582 1,582— —— —— 1,582— 1,582 Plus: AdjustmentsPlus: for Adjustments contingent purchasefor contingent obligation purchase obligation — —— —— 1,840— 1,8401,840 1,840 Adjusted EBITDAAdjusted EBITDA $ 10,630 $ $ 10,630(8,260 ) $ $ (8,2608,480 ) $ $ 8,480(7,908 )$ $ (7,2908,942 ) $ 2,942 (In thousands) Three Months ended December 31, 2017 Corporate/ TES LTL Ascent Eliminations Total Net (loss) income $ 5,982 $ (12,256 ) $ 6,076 $ (23,129 ) $ (23,327 ) Plus: Total interest expense 7 32 33 18,595 18,667 Plus: Benefit from income taxes — — — (17,675) (17,765 ) Plus: Depreciation and amortization 6,577 1,515 1,208 613 9,913 Plus: Long-term incentive compensation expenses — — — 640 640 Plus: Corporate restructuring and restatement costs — — — 8,730 8,730 Adjusted EBITDA $ 12,566 $ (10,709 ) $ 7,317 $ (12,226 ) $ (3,052) YOUR GOODS. OUR BEST. 8


 
CHANGE IN ADJUSTED EBITDA BY SEGMENT Fourth Quarter (In thousands) Corporate/ TES LTL Ascent Eliminations Total Adjusted EBITDA Q4 2018 $ 10,630 $ (8,260) $ 8,480 $ (7,908) $ 2,942 Adjusted EBITDA Q4 2017 12,566 (10,709) 7,317 (12,226) (3,052) Adjusted EBITDA Improvement/ (Decline) $ (1,936) $ 2,449 $ 1,163 $ 4,318 $ 5,994 YOUR GOODS. OUR BEST. 9


 
Full Year 2018 Results YOUR GOODS. OUR BEST. 10


 
SUMMARY OF FULL YEAR 2018 RESULTS Financial Summary Revenues were $2,216.1 million in 2018 compared to $2,091.3 million in 2017 • Unitrans revenues were $67.6 million in 2017; excluding Unitrans, revenues grew 9.5%. • Higher revenues in the TES and Ascent segments contributed to the increase, which were partially offset by lower revenue in the LTL segment. • Revenue increases of 13.2% in TES resulted primarily from higher rates across all businesses and strong volume increases in air and ground expedite at Active On-Demand. • Revenue declines in LTL were a result of planned reductions in service areas and pricing discipline to drive more shipments into higher density lanes; lower shipment counts were partially offset by higher rates and shipment size which yielded an increase in revenue per shipment. • Ascent revenue, excluding Unitrans, grew by 14.0% benefitting from growth in all three service offerings; retail consolidation drove higher percentage growth due to new customer starts and increased volumes and rates from existing customers. Operating loss of $58.5 million in 2018 vs. $36.5 million in 2017 • Operating loss in 2018 included corporate restructuring and restatement costs of $22.2 million, operations restructuring costs of $4.7 million, a contingent purchase obligation of $1.8 million and non-cash fleet impairment charges in intermodal services of $1.6 million. • Operating loss in 2017 was reduced by the gain on sale of Unitrans of $35.4 million. Net loss increased to $165.6 million in 2018 vs. $91.2 million in 2017 • Increased net loss in 2018 due primarily to the items affecting operating loss discussed above, increased interest costs of $56.0 million related to the company’s preferred stock and a lower federal tax rate. • These increases were partially offset by lower bank debt interest costs and the absence of a loss from debt extinguishment of $15.9 million that occurred in 2017. Diluted loss per share available to common stockholders of $4.30 in 2018 vs. $2.37 in 2017 Adjusted EBITDA improved by $18.8 million to $17.3 million in 2018 vs. $1.6 million loss (excluding Unitrans) in 2017 • The improvement was due to higher Adjusted EBITDA in the TES and Ascent segments and lower corporate costs in 2018, partially offset by lower Adjusted EBITDA at LTL. YOUR GOODS. OUR BEST. 11


 
ADJUSTED EBITDA Full Year 2018 vs. 2017 (In thousands) Year ended December 31, 2018 Corporate/ TES LTL Ascent Eliminations Total Net (loss) income $ 1,782 $ (27,009 ) $ 28,226 $ (168,596 ) $ (165,597 ) Plus: Total interest expense 315 117 108 116,372 116,912 Plus: Benefit from income taxes — — 131 (9,945) (9,814 ) Plus: Depreciation and amortization 28,807 3,854 5,049 5,057 42,767 Plus: Long-term incentive compensation expenses — — — 2,696 2,696 Plus: Corporate restructuring and restatement costs — — — 22,224 22,224 Plus: Operations restructuring costs 4,655 — — — 4,655 Plus: Fleet impairment charges 1,582 — — — 1,582 Plus: Adjustments for contingent purchase obligation — — — 1,840 1,840 Adjusted EBITDA $ 37,141 $ (23,038 ) $ 33,514 $ (30,352 ) $ 17,265 (In thousands) Year ended December 31, 2017 Corporate/ Less: Total w/o TES LTL Ascent Eliminations Total Unitrans Unitrans Net (loss) income $ 6,033 $ (26,578 ) $ 22,350 $ (92,991 ) $ (91,186 ) $ 3,497 $ (94,683 ) Plus: Total interest expense (44 ) 195 143 63,755 64,049 — 64,049 Plus: Benefit from income taxes — — — (25,191 ) (25,191 ) 2,295 (27,486 ) Plus: Depreciation and amortization 25,535 4,353 5,965 1,894 37,747 819 36,928 Plus: Goodwill impairment charges — — 4,402 — 4,402 — 4,402 Plus: Long-term incentive compensation expenses — — — 2,450 2,450 — 2,450 Plus: Gain on sale of Unitrans — — — (35,440 ) (35,440 ) — (35,440 ) Plus: Loss on debt extinguishments — — — 15,876 15,876 — 15,876 Plus: Corporate restructuring and restatement costs — — — 32,321 32,321 — 32,321 Adjusted EBITDA $ 31,524 $ (22,030 ) $ 32,860 $ (37,326 ) $ 5,028 $ 6,611 $ (1,583 ) Note: Adjusted EBITDA for the Ascent segment for the year ended December 31, 2017, excluding Unitrans, was $26.2 million. YOUR GOODS. OUR BEST. 12


 
CHANGE IN ADJUSTED EBITDA BY SEGMENT Year to Date (In thousands) Corporate/ TES LTL Ascent Eliminations Total Adjusted EBITDA FY 2018 $ 37,141 $ (23,038) $ 33,514 $ (30,352) $ 17,265 Adjusted EBITDA FY 2017 31,524 (22,030) 26,249 (37,326) (1,583) Adjusted EBITDA Improvement/(Decline) $ 5,617 $ (1,008) $ 7,265 $ 6,974 $ 18,848 Note: Adjusted EBITDA for the Ascent segment for 2017 excludes Unitrans. YOUR GOODS. OUR BEST. 13


 
CAPITALIZATION (In millions) Pro forma 12/31/2017 12/31/2018 12/31/2018 (1) Total Bank Debt $ 199.3 $ 168.8 $ 121.8 Capital Leases $ 9.8 $ 51.0 $ 51.0 Total Debt $ 209.0 $ 219.8 $ 172.8 Preferred Stock $ 263.3 $ 402.9 $ – Total Debt and Preferred Stock $ 472.4 $ 622.7 $ 172.8 (1) Pro forma included for illustrative purposes. The calculation assumes the rights offering, new ABL and term loan closed on December 31, 2018. YOUR GOODS. OUR BEST. 14


 
Q4 Business Trends YOUR GOODS. OUR BEST. 15


 
BUSINESS TRENDS Truckload & Express Services Operating Commentary Strategy • Integration to improve our scale and right size capacity to address both scheduled Q4 2018 vs 2017 (%) FY 2018 vs 2017 (%) and unscheduled freight needs Active On-Demand Revenue Active On-Demand ~ 54% of FY Segment Revenue Air Fleet & Brokerage $63,677 (25.5%) $238,772 16.0% Ground Fleet & Brokerage $103,536 (2.5%) $434,193 26.9% • Air revenues declined primarily within brokered aircraft, which has a more modest impact on EBITDA • Ground revenue declines 2.5% in Q4 as rates in ground expedited continue to Over-the-Road Revenue $108,923 4.2% $440,701 1.9% moderate from peak levels in Q4 2017 and Q1 2018 Intermodal Services Revenue $32,612 4.8% $132,129 6.3% Over the Road ~ 35% of FY Segment Revenue Intrasegment Eliminations ($7,510) (32.2%) ($38,118) 1.4% • Includes our dry van, temperature control and flatbed fleets • Dry Van revenue improves, but margin continues to be challenged primarily from maintenance and other fleet related costs Total Revenue $301,238 (4.8%) $1,207,677 13.2% • Temperature Controlled fleet integration produces less revenue but continues to improve margin sequentially and over the prior year period Adjusted EBITDA $10,630 (15.4%) $37,141 17.8% Intermodal Services ~ 11% of FY Segment Revenue • Revenue growth of 4.8% in Q4 2018 resulting from improvements in rates per load partially offset by declines in load count Note: For a reconciliation of Adjusted EBITDA to Net Income (Loss), see our press release dated March 12, 2019. YOUR GOODS. OUR BEST. 16 16


 
BUSINESS TRENDS Less-than-Truckload Operating Commentary Strategy • Focus on core competency as a metro to metro long haul provider • Reducing pickup and delivery footprint to remove unprofitable areas and redeploy assets to Q4 2018 vs 2017 (%) FY 2018 vs 2017 (%) more profitable lanes, while improving freight profile. • Sales and pricing discipline to drive volume in strategic lanes Revenue (Incl. Fuel) ( a ) $105,888 (8.1%) $444,945 (4.1%) • Drive shipment reliability and visibility through investments in technology, centralization and process Revenue (Ex. Fuel) $91,493 (9.2%) $390,224 (4.7%) standardization Revenue per Hundredweight (Incl. Fuel) $21.95 6.2% $21.33 6.6% Trends Revenue per Hundredweight (Ex. Fuel) $18.96 4.9% $18.71 5.9% • Adjusted EBITDA loss of $8.3m improved by 23% from Q4 2017, but has widened from Q3 2018 due Revenue per Shipment (Incl. Fuel) $254.09 11.4% $243.69 12.1% to some emerging market softness combined with typical seasonal patterns Revenue per Shipment (Ex. Fuel) $219.54 10.0% $213.74 11.4% Revenue & Yield Pounds per Shipment 1,158 4.9% 1,143 5.3% • Q4 revenue down 6.2% due to: Shipments per Day 6,512 (17.5%) 7,159 (14.5%) • Shipment per day reduction of 17.5% primarily from reduced pickup and delivery footprint and addressing unprofitable customers Backhaul Revenue ( b ) $1,935 N/A $7,336 N/A • Revenue per shipment up 10.0% excluding fuel and 11.4% including fuel due to increased Intrasegment Eliminations ( c ) $220 633.5% - N/A rates and shipment size • Yield up 6.2% including fuel and 4.9% excluding fuel Total Revenue ( a + b + c ) $108,044 (6.2%) $452,281 (2.4%) • Continued success increasing revenue in our Tier 1 lanes (Major Metro) – 64.7% in Q4 2018 vs 58.0% in Q4 2017 Adjusted EBITDA ($8,260) 22.9% ($23,038) (4.6%) Cost • Q4 pickup and delivery costs improved due to reduced footprint and improved freight profile and yield • Q4 line haul costs improved due to network planning and efficiency, as well as lower purchased transportation costs vs. Q4 2017 • Personnel and other operating expenses have not been reduced in proportion to shipment volume due to continued investment in people, processes and technology YOUR GOODS. OUR BEST. 17 17


 
BUSINESS TRENDS Ascent Global Logistics Operating Commentary Strategy • Integration enabling easier access to more of our brokerage capabilities by more of our Q4 2018 vs 2017 (%) FY 2018 vs 2017 (%) customers • Investments to consolidate our IT capabilities onto one domestic Transportation Management System (TMS) Domestic Freight Management $84,456 0.4% $356,218 11.7% Domestic ~ 62% of FY Segment Revenue International Freight Forwarding $35,395 48.7% $111,320 10.7% • Q4 revenue flat as modest growth in brokered loads was offset by a reduction in the fleet used to back up our brokerage in certain tight lanes Retail Consolidation $28,154 18.1% $105,895 27.0% Intrasegment Eliminations ($137) 64.6% ($362) 13.7% International ~ 19% of FY Segment Revenue • Accelerating revenue growth in Q4 from expanded volumes at current and new customers (including some acceleration of shipments in anticipation of potential future tariff impacts) Total Revenue $147,867 12.6% $573,072 14.0% as well as rate increases Adjusted EBITDA $8,480 15.9% $33,514 27.7% Retail Consolidation ~ 19% of FY Segment Revenue • Q4 revenue growth remains strong, but has moderated due to fewer new customer starts Note: 2017 % comparisons exclude Unitrans revenues of $67.6 million and EBITDA of $6.6 million for FY 2017 from International Freight Forwarding. YOUR GOODS. OUR BEST. 18 18


 
Business Improvements & Outlook YOUR GOODS. OUR BEST. 19


 
BUSINESS IMPROVEMENT GUIDEPOSTS 5 Key Phases – Tracking & Reporting Our Progress 5. OPTIMIZATION < Re-Capitalization Completed in 2019 < Re-Financing in 2017 YOUR GOODS. OUR BEST. 20


 
PLANS IN PLACE FOR PERFORMING AND UNDERPERFORMING UNITS Segments 2018 vs. 2017 ($ in millions) TES LTL Ascent Total Revenue(1)(2) Operating Trend Domestic; $1,246 Performing International; Active On-Demand vs. +19% Retail Well $1,051 Consolidation Flatbed; $283 Restructured Temp Controlled; vs. +1% Intermodal $280 $742 Underperforming Dry Van LTL vs. 0% $740 Total $1,208 $452 $573 $2,239$2,233 +9.8% (1)(2) vs. +13% vs. (2%) vs. +14% vs. +10% Revenue $1,067 $464 $503 $2,034 vs. vs. 2017A A Total $37.1 ($23.0) $33.5 vs. +18% vs. (5%) vs. +28% Adj. EBITDA(1)(3) 2018 $31.5 ($22.0) $26.2 Notes: (1) 2017 Total and Ascent revenues excludes $67.6mm related to Unitrans and Adj. EBITDA excludes $6.6mm related to Unitrans. (2) Revenue for Performance Groups excludes intrasegment eliminations. Revenue totals exclude intersegment eliminations. (3) Adjusted EBITDA totals exclude corporate expenses / eliminations of $30mm for 2018 and $37mm for 2017. YOUR GOODS. OUR BEST. 21


 
SIMPLIFICATION & INTEGRATION – SEGMENTS Key Initiatives Update Truckload & Express LTL Ascent Global Improved operational Invest in longer-term Integrate and expand structure and performance recovery logistics businesses Domestic Freight Management Air & Ground Expedited New Management Team o Management team integration o Continued investments in capacity o Increased focus on service completed in 2018 1H and industry-leading technology o Standard terminal operating o Legal entity integration completed at procedures end of 2018 Intermodal o Core systems integration in 2019 o Loss making terminals restructured Network Improvements in 2017 o Eliminated unprofitable service areas International Freight Forwarding o Improved Capacity in 2018 2H and o More focus on core lanes o Increasing capabilities and expanding Fleet in 2019 1H o Freight profile & yield improvement customer base o Targeting larger opportunities Temperature Controlled IT Investment & Cost Control o Restructuring successfully completed o Line haul management Retail Distribution in 2018 Q2 o Dock technology o Investments in warehouse racking, o Safety & maintenance automation and technology o Claims o Focusing on retention and new Dry Van o Other SG&A o Multiple operating units customers o Developing plans to streamline YOUR GOODS. OUR BEST. 22


 
SIMPLIFICATION & INTEGRATION – OTHER KEY AREAS Key Initiatives Update Invest in our fleets, drivers and pilots • New transportation equipment and better control – financing vs. operating leases • Increased pilot/driver/contractor recruiting and retention – improved equipment, lifestyle and pay IT investments • Improved system integration and customer-facing technology in each segment • IT upgrades that support integration, strengthen internal controls and enable future growth Financial goals • Key operating and ROIC metrics across all business units • Move operating margins closer to industry norms YOUR GOODS. OUR BEST. 23


 
POSITIVE OUTLOOK FOR 2019 AND BEYOND Recent capital structure improvements support our longer-term business plans and increases the speed and likelihood of a full operational recovery followed by additional growth and optimization opportunities Expecting 2019 Adjusted EBITDA improvements in all three segments Improving dry van and LTL expected to add significant value Longer-term TES and LTL segment margins expected to increase in-line with peer group margins Current improvements and structural changes expected to increase profit resiliency and success throughout natural industry cycles YOUR GOODS. OUR BEST. 24


 
Q & A Discussion YOUR GOODS. OUR BEST. 25