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

May 7, 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 May 7, 2019. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 2.02 of this Current Report on Form 8-K (including Exhibit 99.1) 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.The text included with this Item 2.02 of this Current Report on Form 8-K 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 May 7, 2019, at 10:00 a.m. Eastern Time. A copy of the PowerPoint presentation to be used for the conference call and webcast is furnished as Exhibit 99.2 to this Current Report on Form 8-K.
The information in this Item 7.01 of this Current Report on Form 8-K (including Exhibit 99.2) 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: May 7, 2019
 
 
 
By:
/s/ Terence R. Rogers
 
 
 
 
 
Terence R. Rogers
 
 
 
 
 
Chief Financial Officer



rrtsq12019earningsreleas
Roadrunner Transportation Systems Reports First Quarter 2019 Results • Revenue decline in first quarter 2019 primarily due to expected market moderation in ground expedite compared to peak demand in first quarter 2018 and lower volumes in Less-Than-Truckload (LTL) segment due primarily to planned service area reductions • LTL segment improved Adjusted EBITDA as a result of restructuring efforts • Truckload & Express Services (TES) and Ascent Global Logistics (Ascent) segments earned marginally lower Adjusted EBITDA due to difficult comparisons • Capital structure improvements completed during the quarter enabling increased investments in all three segments • Adding new board member nominees with significant industry experience • Longer-term outlook unchanged and improvement plans in place Downers Grove, IL (BUSINESS WIRE) - May 7, 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 first quarter ended March 31, 2019 and the filing of its Quarterly Report on Form 10-Q. First Quarter Results Revenues for the first quarter ended March 31, 2019 were $507.1 million, compared to revenues of $570.0 million for the first quarter ended March 31, 2018. Operating loss was $20.8 million in the first quarter of 2019 compared to $13.4 million in the first quarter of 2018. Net loss was $27.0 million in the first quarter of 2019 compared to $23.6 million in the first quarter of 2018. In addition to the lower revenues, net loss in the first quarter of 2019 was also impacted by higher depreciation expense of $6.5 million, a loss on debt restructuring of $2.3 million, and a software impairment charge of $0.8 million, partially offset by a decrease in interest expense of $5.7 million primarily due to the waiver of interest on the company’s preferred stock until it was fully redeemed after completion of the company’s $450 million rights offering in February. Diluted loss per share available to common stockholders was $1.78 for the first quarter of 2019, compared to diluted loss per share of $15.37 for the first quarter of 2018. On April 5, 2019, the company executed a 1-for-25 reverse stock split which retroactively adjusts all share and per common share data for all periods presented. After reflecting the impact of the reverse stock split, the weighted average common stock outstanding used in the calculation of diluted loss per share was significantly higher in the first quarter of 2019 due to the company’s issuance of 36 million shares of common stock in the rights offering. 1


 
Adjusted EBITDA for the first quarter of 2019 declined to $0.7 million compared to $3.1 million in the first quarter of 2018. Adjusted EBITDA for the quarters ended March 31, 2019 and 2018 was calculated as follows: (In thousands) Three Months Ended March 31, 2019 Corporate/ TES LTL Ascent Eliminations Total Net (loss) income $ (4,413 ) $ (5,868 ) $ 5,267 $ (21,985 ) $ (26,999 ) Plus: Total interest expense 692 34 92 3,064 3,882 Plus: Provision for income taxes — — 13 58 71 Plus: Depreciation and amortization 11,187 638 1,682 2,035 15,542 Plus: Impairment charges — — — 778 778 Plus: Long-term incentive compensation expenses — — — 1,731 1,731 Plus: Loss on debt restructuring — — — 2,270 2,270 Plus: Corporate restructuring and restatement costs — — — 3,432 3,432 Adjusted EBITDA $ 7,466 $ (5,196 ) $ 7,054 $ (8,617 ) $ 707 Three Months Ended March 31, 2018 Corporate/ TES LTL Ascent Eliminations Total Net (loss) income $ 4,389 $ (8,720 ) $ 6,677 $ (25,989 ) $ (23,643 ) Plus: Total interest expense 11 36 30 9,466 9,543 Plus: Provision for income taxes — — — 670 670 Plus: Depreciation and amortization 6,296 913 1,188 668 9,065 Plus: Long-term incentive compensation expenses — — — 577 577 Plus: Corporate restructuring and restatement costs — — — 6,913 6,913 Adjusted EBITDA $ 10,696 $ (7,771 ) $ 7,895 $ (7,695 ) $ 3,125 Comparison of First Quarter 2019 to 2018 Corporate/ TES LTL Ascent Eliminations Total Adjusted EBITDA Improvement/ (Decline) $ (3,230) $ 2,575 $ (841) $ (922) $ (2,418) For more information about Adjusted EBITDA, see “Non-GAAP Financial Measures” below and the company’s SEC filings. Rights Offering, Debt Refinancing and Increased Liquidity On February 26, 2019, the company completed its previously announced $450 million rights offering. The net proceeds from the rights offering 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 funds for general corporate purposes. On February 28, 2019, the company refinanced its prior asset-based lending (“ABL”) facility. The new ABL credit facility consists of a $200 million asset-based revolving line of credit. Also on February 28, 2


 
2019, the company entered into a new term loan credit agreement (“Term Loan”). The Term Loan proceeds of approximately $51 million were used to repay in full the previous term loan and provide funds 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 on First Quarter Results “While we saw market softness in the first quarter in some of our well-performing businesses, our longer- term improvement plans are being executed and we continue to invest in our businesses. Although some of our businesses can exhibit volatility between quarters driven primarily by market conditions, our overarching focus is to invest in all segments to achieve better than average industry margins. We are encouraged by our team’s progress, especially with an improved balance sheet that now provides us enhanced financial flexibility,” said Curt Stoelting, Chief Executive Officer of Roadrunner. “We continued to make progress in our LTL segment, where revenue declined primarily due to planned service area reductions. These reductions support our ongoing efforts to eliminate unprofitable freight and increase density in key lanes. As a result of these efforts, LTL yield and Adjusted EBITDA increased compared to the prior year quarter due to pricing actions, improved linehaul, pick-up and delivery costs and reduced SG&A costs. We expect revenue trends to improve in future quarters,” said Stoelting. Stoelting continued, “We faced difficult revenue comparisons in our Active On-Demand ground expedite offering, which had revenue declines of approximately $60 million in the first quarter of 2019 compared to the prior year first quarter peak demand. We continued to experience strong demand for air expedite, one of our top performing services, but our performance was negatively impacted by lower than normal capture rates on our owned fleet due to aircraft maintenance and availability. The reduced volume on our fleet was a primary driver of the lower profitability in our TES segment in the first quarter of 2019 compared to the first quarter of 2018. We are encouraged that our recently integrated temperature- controlled business increased profit contribution within the TES segment in the current quarter compared to both the prior year first quarter and the fourth quarter of 2018. We are currently working to integrate multiple dry van operations in order to increase productivity and profitability.” Stoelting added, “Profits in our Ascent segment declined marginally year over year, primarily due to lower volume in Domestic Freight Management, which was not fully offset by improved brokerage spreads and investment spending in International Freight Forwarding, as we invest to add additional sales resources.” “With the completion of the rights offering and debt refinancing in the first quarter, we now have the capital structure to support our longer-term focus and business plans, which we believe will enable a full operational recovery followed by additional growth and optimization opportunities. These efforts will be supported by two new board member nominees, Don Brown and Chris Jamroz, both of whom have significant industry and business experience,” he concluded. Financial Outlook The company remains focused on its longer-term business plans and goals to deliver higher levels of profitability and sustainable returns on invested capital. Over the longer-term, the company expects 3


 
segment margins will increase to be in line with peer group margins and that structural changes currently being implemented will result in profitability that is more resilient and will better position 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 quarter ended March 31, 2019 on Tuesday, May 7, 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 4994926. 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, May 14, 2019 and can be accessed by dialing 855-859-2056 (U.S.) or 404-537-3406 (International). Callers will be prompted for passcode 4994926. 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, over-the-road truckload 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 ability of all segments to achieve better than average industry margins; the success of the LTL segment to eliminate unprofitable freight and increase density in key lanes; the expectation that LTL revenue trends will improve in future quarters; the integration of multiple dry van operations in order to increase productivity and profitability; the ability of Roadrunner’s capital structure 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; the election on two new nominees to the company’s board of directors; Roadrunner’s longer-term business goals to deliver higher levels of profitability and sustainable returns on invested capital; 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 will better position Roadrunner for success 4


 
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, loss on debt restructuring, and corporate restructuring and restatement costs associated with legal, consulting and accounting matters, including internal and external investigations. 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; 5


 
• 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 Marilyn Vollrath 414-376-8834 ir@rrts.com 6


 
ROADRUNNER TRANSPORTATION SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except par value) March 31, December 31, 2019 2018 ASSETS Current assets: Cash and cash equivalents $ 4,612 $ 11,179 Accounts receivable, net of allowances of $8,522 and $9,980, respectively 273,634 274,843 Income tax receivable 3,180 3,910 Prepaid expenses and other current assets 56,612 61,106 Total current assets 338,038 351,038 Property and equipment, net of accumulated depreciation of $143,271 and $130,077, respectively 209,652 188,706 Other assets: Operating lease right-of-use asset 122,701 — Goodwill 264,826 264,826 Intangible assets, net 40,779 42,526 Other noncurrent assets 6,283 6,361 Total other assets 434,589 313,713 Total assets $ 982,279 $ 853,457 LIABILITIES AND STOCKHOLDERS’ INVESTMENT (DEFICIT) Current liabilities: Current maturities of debt $ 8,812 $ 13,171 Current finance lease liability 17,658 13,229 Current operating lease liability 36,797 — Accounts payable 147,765 160,242 Accrued expenses and other current liabilities 105,672 110,943 Total current liabilities 316,704 297,585 Deferred tax liabilities 3,938 3,953 Other long-term liabilities 3,228 7,857 Long-term finance lease liability 56,334 37,737 Long-term operating lease liability 90,767 — Long-term debt, net of current maturities 150,856 155,596 Preferred stock — 402,884 Total liabilities 621,827 905,612 Commitments and contingencies (Note 12) Stockholders’ investment (deficit): Common stock $.01 par value; 44,000 and 4,200 shares authorized; 37,562 and 1,556 shares issued and outstanding 376 16 Additional paid-in capital 844,489 405,243 Retained deficit (484,413 ) (457,414 ) Total stockholders’ investment (deficit) 360,452 (52,155 ) Total liabilities and stockholders’ investment (deficit) $ 982,279 $ 853,457 7


 
ROADRUNNER TRANSPORTATION SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts) Three Months Ended March 31, 2019 2018 Revenues $ 507,148 $ 569,984 Operating expenses: Purchased transportation costs 342,775 400,963 Personnel and related benefits 79,215 75,887 Other operating expenses 89,614 97,499 Depreciation and amortization 15,542 9,065 Impairment charges 778 — Total operating expenses 527,924 583,414 Operating loss (20,776 ) (13,430 ) Interest expense: Interest expense - preferred stock — 7,115 Interest expense - debt 3,882 2,428 Total interest expense 3,882 9,543 Loss on debt restructuring 2,270 — Loss before income taxes (26,928 ) (22,973 ) Provision for income taxes 71 670 Net loss $ (26,999 ) $ (23,643 ) Loss per share: Basic $ (1.78 ) $ (15.37 ) Diluted $ (1.78 ) $ (15.37 ) Weighted average common stock outstanding: Basic 15,158 1,538 Diluted 15,158 1,538 8


 
ROADRUNNER TRANSPORTATION SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ INVESTMENT (DEFICIT) (Unaudited) Common Stock Total Additional Stockholders' Paid-In Retained Investment (In thousands, except shares) Shares Amount Capital Deficit (Deficit) BALANCE, December 31, 2018 1,555,868 $ 16 $ 405,243 $ (457,414 ) $ (52,155 ) Issuance of restricted stock units, net of taxes paid 5,664 — (8 ) — (8 ) Issuance of common stock 36,000,000 360 449,640 — 450,000 Common stock issuance costs — — (11,985 ) — (11,985 ) Share-based compensation — — 1,599 — 1,599 Net loss — — — (26,999 ) (26,999 ) BALANCE, March 31, 2019 37,561,532 $ 376 $ 844,489 $ (484,413 ) $ 360,452 Common Stock Total Additional Stockholders' Paid-In Retained Investment (In thousands, except shares) Shares Amount Capital Deficit (Deficit) BALANCE, December 31, 2017 1,536,925 $ 15 $ 403,535 $ (292,703 ) $ 110,847 Issuance of restricted stock units, net of taxes paid 3,272 — (75 ) — (75 ) Share-based compensation — — 523 — 523 Cumulative effect of change in accounting principle — — — 886 886 Net loss — — — (23,643 ) (23,643 ) BALANCE, March 31, 2018 1,540,197 $ 15 $ 403,983 $ (315,460 ) $ 88,538 9


 
ROADRUNNER TRANSPORTATION SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months Ended March 31, 2019 2018 Cash flows from operating activities: Net loss $ (26,999 ) $ (23,643 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 15,756 9,262 Change in fair value of preferred stock — 6,057 Amortization of preferred stock issuance costs — 1,058 Loss on disposal of property and equipment 37 135 Share-based compensation 1,599 523 Loss on debt restructuring 2,270 — (Recovery of) provision for bad debts (19 ) 1,459 Deferred tax (benefit) provision (15 ) 568 Impairment charges 778 — Changes in: Accounts receivable 1,228 (15,269 ) Income tax receivable 730 653 Prepaid expenses and other assets 12,879 (2,817 ) Accounts payable (12,811 ) 9,642 Accrued expenses and other liabilities (9,355 ) 2,174 Net cash used in operating activities (13,922 ) (10,198 ) Cash flows from investing activities: Capital expenditures (8,553 ) (5,699 ) Proceeds from sale of property and equipment 768 37 Net cash used in investing activities (7,785 ) (5,662 ) Cash flows from financing activities: Borrowings under revolving credit facilities 504,478 — Payments under revolving credit facilities (526,643 ) — Term debt borrowings 52,218 557 Term debt payments (38,878 ) (5,427 ) Debt issuance costs (2,005 ) — Payments of debt restructuring costs (693 ) — Proceeds from issuance of common stock 450,000 — Common stock issuance costs (10,514 ) — Proceeds from issuance of preferred stock — 17,500 Preferred stock issuance costs — (1,058 ) Preferred stock payments (402,884 ) — Issuance of restricted stock units, net of taxes paid (8 ) (75 ) Payments on insurance premium financing (5,951 ) — Payments of finance lease obligation (3,980 ) (570 ) Net cash provided by financing activities 15,140 10,927 Net decrease in cash and cash equivalents (6,567 ) (4,933 ) Cash and cash equivalents: Beginning of period 11,179 25,702 End of period $ 4,612 $ 20,769 10


 
ROADRUNNER TRANSPORTATION SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (Unaudited) Three Months Ended (In thousands) March 31, 2019 2018 Supplemental cash flow information: Cash paid for interest $ 3,567 $ 2,154 Cash refunds from income taxes, net $ (698 ) $ (562 ) Non-cash finance leases and other obligations to acquire assets $ 27,428 $ 276 Capital expenditures, not yet paid $ 962 $ — 11


 
q12019investorpresentati
ROADRUNNER TRANSPORTATION SYSTEMS Q1 2019 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 ability of all segments to achieve better than average industry margins; the success of the LTL segment to eliminate unprofitable freight and increase density in key lanes; the expectation that LTL revenue trends will improve in future quarters; the integration of multiple dry van operations in order to increase productivity and profitability; the ability of Roadrunner’s capital structure 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; the election on two new nominees to the company’s board of directors; Roadrunner’s longer-term business goals to deliver higher levels of profitability and sustainable returns on invested capital; 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 will better position 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, loss on debt restructuring, and corporate restructuring and restatement costs associated with legal, consulting and accounting matters, including internal and external investigations. 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. 2019 First Quarter Financial Results 3. Q1 Business Trends 4. Business Improvements & Outlook 5. Question & Answer YOUR GOODS. OUR BEST. 4


 
OPENING COMMENTS Revenue decline primarily due to ground expedite market conditions and planned LTL service area reductions LTL segment improved Adjusted EBITDA from restructuring efforts TES and Ascent segments marginally lower Adjusted EBITDA due to difficult comparisons Capital structure improvements completed during Q1 enabling increased investment in all three segments Adding new board member nominees with significant industry experience Longer-term outlook unchanged and improvement plans in place YOUR GOODS. OUR BEST. 5


 
First Quarter 2019 Results YOUR GOODS. OUR BEST. 6


 
SUMMARY OF Q1 2019 RESULTS Financial Summary Revenues of $507.1 million in Q1 2019 vs. $570.0 million in Q1 2018 • Revenue decline in all three segments primarily due to market moderation in ground expedite compared to peak demand in Q1 2018 in Truckload & Express Services (TES), lower volumes in Less-Than-Truckload (LTL) due primarily to planned service area reductions, and lower volume in Domestic Freight Management (Ascent). Operating loss of $20.8 million in Q1 2019 vs. $13.4 million in Q1 2018 • Q1 2019 includes higher depreciation expense of $6.5 million and a software impairment charge of $0.8 million, partially offset by lower corporate restructuring and restatement costs of $3.5 million. Net loss of $27.0 million in Q1 2019 vs. $23.6 million in Q1 2018 • Q1 2019 includes a loss on debt restructuring of $2.3 million pre-tax and a decrease in interest expense of $5.7 million pre-tax, primarily due to a waiver of interest on the preferred stock related to the rights offering. Diluted loss per share available to common stockholders of $1.78 in Q1 2019 vs. $15.37 in Q1 2018 • On April 5, 2019, a 1-for-25 reverse stock split was completed, which retroactively adjusts all share and per share data for all periods presented. • Weighted average shares outstanding were significantly higher in Q1 2019 due to 36 million shares issued in February rights offering. Adjusted EBITDA decreased to $0.7 million in Q1 2019 vs. $3.1 million in Q1 2018 • Note: For a reconciliation of Adjusted EBITDA to Net Income (Loss), see our press release dated May 7, 2019. YOUR GOODS. OUR BEST. 7


 
ADJUSTED EBITDA First Quarter 2019 vs. 2018 (In thousands) Truckload & Less Than Ascent Global Roadrunner Ex pre ss Truckload Logistics Corporate Transportation Services Segment Segment Syste ms, Inc. Segment Three Months ended March 31, 2019 Net (loss) income (4,413) (5,868) 5,267 (21,985) (26,999) Plus: Total interest expense 692 34 92 3,064 3,882 Plus: Provision for income taxes 13 58 71 Plus: Depreciation and amortization 11,187 638 1,682 2,035 15,542 Plus: Impairment charges 778 778 Plus: Long-term incentive compensation expenses 1,731 1,731 Plus: Loss on debt restructuring 2,270 2,270 Plus: Corporate restructuring and restatement costs 3,432 3,432 Adjusted EBITDA $ 7,466 $ (5,196) $ 7,054 $ (8,617) $ 707 Three Months ended March 31, 2018 Net (loss) income 4,389 (8,720) 6,677 (25,989) (23,643) Plus: Total interest expense 11 36 30 9,466 9,543 Plus: Provision for income taxes 670 670 Plus: Depreciation and amortization 6,296 913 1,188 668 9,065 Plus: Long-term incentive compensation expenses 577 577 Plus: Corporate restructuring and restatement costs 6,913 6,913 Adjusted EBITDA $ 10,696 $ (7,771) $ 7,895 $ (7,695) $ 3,125 Adjusted EBITDA Improvement/(Decline) $ (3,230) $ 2,575 $ (841) $ (922) $ (2,418) YOUR GOODS. OUR BEST. 8


 
CAPITALIZATION (In millions) 12/31/2018 3/31/2019 Total Bank Debt $ 168.8 $ 159.7 Finance Lease Liability $ 51.0 $ 74.0 Total Debt $ 219.8 $ 233.7 Preferred Stock $ 402.9 $ - Total Debt & Preferred Stock $ 622.7 $ 233.7 YOUR GOODS. OUR BEST. 9


 
Q1 Business Trends YOUR GOODS. OUR BEST. 10


 
BUSINESS TRENDS Truckload & Express Services Operating Commentary Strategy • Integration to improve our scale and right size capacity to address both scheduled (In thousands, except %'s) and unscheduled freight needs Q1 2019 Q1 2018 vs 2018 (%) Active On-Demand Revenue Active-On-Demand ~ 51% of Q1 Segment Revenue Air Fleet & Brokerage $ 67,344 $ 59,749 12.7% • Demand for expedited air drove 12.7% air revenue increase, but aircraft Ground Fleet & Brokerage $ 75,427 $ 135,017 (44.1%) availability reduced capture rate on our fleets. This capture rate decline had the largest impact on segment profitability Over-the-Road Revenue $ 105,077 $ 112,021 (6.2%) • Ground revenue declines from lower ground expedited demand, which continues to moderate from peak levels in Q4 2017 and Q1 2018 Intermodal Services Revenue $ 32,078 $ 32,619 (1.7%) Over-the-Road ~ 38% of Q1 Segment Revenue Intrasegment Eliminations $ (5,069) $ (13,339) 62.0% • Includes our dry van, temperature controlled and flatbed fleets Total Revenue $ 274,857 $ 326,067 (15.7%) • Revenue decline primarily from Temperature Controlled fleet integration producing less revenue but improved profit compared to both Q4 and Q1 of 2018 Adjusted EBITDA $ 7,466 $ 10,696 (30.2%) Intermodal Services ~ 11% of Q1 Segment Revenue • Revenue decline of 1.7% in Q1 2019 driven by declines in load counts from market softness, including greater impact of weather as compared to prior year, partially offset by improved rates per load Note: For a reconciliation of Adjusted EBITDA to Net Income (Loss), see Slide 8. YOUR GOODS. OUR BEST. 11 11


 
BUSINESS TRENDS Less-than-Truckload Operating Commentary Strategy • Focus on core competency as a metro-to-metro LTL provider, with expansive long haul, regional and next day offerings. This includes: (In thousands, except operating statistics and %'s) • Sales discipline to drive volume in strategic lanes and leveraging our regional Q1 2019 Q1 2018 vs 2018 (%) capabilities within Expedited Freight Systems • Pricing intelligence and network enhancements to improve yield and market share in Adjusted Revenue (Incl. Fuel) ( a ) $ 101,862 $ 113,202 (10.0%) strategic lanes Adjusted Revenue (Ex. Fuel) $ 89,300 $ 98,338 (9.2%) • Driving shipment reliability and visibility through investments in technology, Adj. Revenue per Hundredweight (Incl. Fuel) $ 21.44 $ 20.97 2.3% centralization of our teams and process standardization Adj. Revenue per Hundredweight (Ex. Fuel) $ 18.80 $ 18.21 3.2% Trends Adj. Revenue per Shipment (Incl. Fuel) $ 246.27 $ 232.43 6.0% • Adjusted EBITDA loss of $5.2 million improved by 33.1% from Q1 2018, and improved by 37.1% Adj. Revenue per Shipment (Ex. Fuel) $ 215.90 $ 201.91 6.9% from Q4 2018 Pounds per Shipment 1,148 1,109 3.6% Revenue & Yield Shipments per Day 6,565 7,610 (13.7%) • Q1 revenue down and yield up due to: • Shipment per day reduction of 13.7% primarily from reduced pickup and delivery Backhaul Revenue ( b ) $ 1,029 $ - 0.0% footprint and reducing unprofitable freight Intrasegment Eliminations ( c ) $ (68) $ (77) (11.1%) • Revenue per shipment up 6.9% excluding fuel and 6.0% including fuel due to increased shipment size and yield actions Total Revenue ( a + b + c ) $ 102,823 $ 113,125 (9.1%) • Yield up 3.2% excluding fuel and 2.3% including fuel due to actions listed above • Continued success increasing revenue in our Tier 1 lanes (Major Metro) – 65.0% in Q1 Adjusted EBITDA $ (5,196) $ (7,771) 33.1% 2019 vs 58.6% in Q1 2018 Cost • Q1 pickup and delivery costs improved due to improved freight profile, partner consolidation, and Note: For a reconciliation of Adjusted EBITDA to Net Income (Loss), see Slide 8. yield actions • Q1 linehaul costs improved due to network planning and efficiency, as well as lower purchased transportation costs vs. Q1 2018 YOUR GOODS. OUR BEST. 12 12


 
BUSINESS TRENDS Ascent Global Logistics Operating Commentary Strategy • Integration enabling easier access to more of our brokerage capabilities by more of our (In thousands, except %'s) customers Q1 2019 Q1 2018 vs 2018 (%) • Investments to consolidate our IT capabilities onto one domestic Transportation Management System (TMS) Domestic Freight Management $ 75,742 $ 86,275 (12.2%) Domestic ~ 57% of Q1 Segment Revenue International Freight Forwarding $ 29,030 $ 23,303 24.6% • Q1 revenue declined as a result of lower brokerage load counts and the planned reduction in the fleet used to back-up our brokerage in certain tight lanes Retail Consolidation $ 27,076 $ 25,397 6.6% • Revenue declines partially offset by improved brokerage spreads and reduced operating costs Intrasegment Eliminations $ (156) $ (32) (390.2%) • Segment Adjusted EBITDA declined primarily due to our Domestic offering Total Revenue $ 131,692 $ 134,943 (2.4%) International ~ 22% of Q1 Segment Revenue • Revenue growth in Q1 from expanded volumes at current and new customers Adjusted EBITDA $ 7,054 $ 7,895 (10.7%) Retail Consolidation ~ 21% of Q1 Segment Revenue • Q1 revenue growth driven primarily by new and existing customer volumes Note: For a reconciliation of Adjusted EBITDA to Net Income (Loss), see Slide 8. YOUR GOODS. OUR BEST. 13 13


 
Business Improvements & Outlook YOUR GOODS. OUR BEST. 14


 
BUSINESS IMPROVEMENT GUIDEPOSTS 5 Key Phases – Tracking & Reporting Our Progress 5. OPTIMIZATION < Re-Capitalization Completed in Q1 2019 < Re-Financing in 2017 YOUR GOODS. OUR BEST. 15


 
SIMPLIFICATION & INTEGRATION – SEGMENTS Key Initiatives Update Truckload & Express LTL Ascent Global Improved operational structure Invest in longer-term Integrate and expand and performance recovery (Rebuilding) logistics businesses (Performing) Domestic Freight Management Active On-Demand (Performing) Operations and Revenue Continued investments in capacity and Management team integration completed o Consolidated line haul o industry-leading technology o in 2018 o Standard terminal operating Core systems integration expands procedures o Intermodal (Restructured) marketing and service capabilities o Increased focus on service Streamlining and upgrading asset- o Loss making terminals restructured Building revenue-right freight, in the o Improved capacity in 2018 2H o backed brokerage fleet in 2019 o right lanes o Fleet upgrades in 2019 1H International Freight Forwarding Network Improvements Temp Controlled – (Restructured) o Increasing capabilities and enhanced o Restructuring successfully completed o More focus on core lanes sales team yielding expansion of in 2018 Q2 o Eliminated unprofitable service areas customer base and volumes Streamlined capacity and key lanes o o Freight profile & yield improvement Targeting larger opportunities yielding operating profits o IT Investment and Cost Control Dry Van – (Restructuring) Retail Distribution Line haul management Combining multiple operating units o Investments in warehouse racking, o Dock technology o Increasing the pace of integration in o automation and technology o Safety & maintenance 2019 Q2 o o Focusing on retaining and adding new o Claims customers o Other SG&A YOUR GOODS. OUR BEST. 16


 
SIMPLIFICATION & INTEGRATION – OTHER KEY AREAS 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 • Improving internal controls and remediating deficiencies • Key operating and ROIC metrics across all business units • Management L-T incentives set based on rights offering price – $12.50 per share, post reverse-split • Move operating margins closer to industry norms YOUR GOODS. OUR BEST. 17


 
LONGER-TERM OUTLOOK UNCHANGED Completed rights offering and refinanced credit facility in Q1; 1-for-25 reverse stock split completed in early Q2 Capital structure improvements support our longer-term focus and business plans which we believe will enable in a full operational recovery followed by additional growth and optimization opportunities Expect longer term segment margins will increase to be in line with peer group margins Current improvements and structural changes expected to increase profit resiliency and better position Roadrunner for success throughout natural industry cycles YOUR GOODS. OUR BEST. 18


 
Q & A Discussion YOUR GOODS. OUR BEST. 19