Delaware | 20-2454942 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
1431 Opus Place, Suite 530 Downers Grove, Illinois | 60515 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer | o | Accelerated filer | x | |||
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | o | |||
Emerging growth company | o |
ITEM 1. | FINANCIAL STATEMENTS. |
(In thousands, except par value) | June 30, 2018 | December 31, 2017 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 35,638 | $ | 25,702 | |||
Accounts receivable, net of allowances of $10,404 and $10,891, respectively | 293,038 | 321,629 | |||||
Income tax receivable | 13,838 | 14,749 | |||||
Prepaid expenses and other current assets | 27,819 | 36,306 | |||||
Total current assets | 370,333 | 398,386 | |||||
Property and equipment, net of accumulated depreciation of $118,064 and $107,037, respectively | 163,440 | 159,547 | |||||
Other assets: | |||||||
Goodwill | 264,826 | 264,826 | |||||
Intangible assets, net | 46,062 | 49,648 | |||||
Other noncurrent assets | 5,737 | 3,636 | |||||
Total other assets | 316,625 | 318,110 | |||||
Total assets | $ | 850,398 | $ | 876,043 | |||
LIABILITIES AND STOCKHOLDERS’ INVESTMENT | |||||||
Current liabilities: | |||||||
Current maturities of debt | $ | 10,012 | $ | 9,950 | |||
Accounts payable | 148,053 | 171,905 | |||||
Accrued expenses and other current liabilities | 101,105 | 105,409 | |||||
Total current liabilities | 259,170 | 287,264 | |||||
Deferred tax liabilities | 11,033 | 14,282 | |||||
Other long-term liabilities | 18,790 | 10,873 | |||||
Long-term debt, net of current maturities | 178,472 | 189,460 | |||||
Preferred stock | 335,979 | 263,317 | |||||
Total liabilities | 803,444 | 765,196 | |||||
Commitments and contingencies (Note 10) | |||||||
Stockholders’ investment: | |||||||
Common stock $.01 par value; 105,000 shares authorized; 38,507 and 38,423 shares issued and outstanding | 385 | 384 | |||||
Additional paid-in capital | 403,984 | 403,166 | |||||
Retained deficit | (357,415 | ) | (292,703 | ) | |||
Total stockholders’ investment | 46,954 | 110,847 | |||||
Total liabilities and stockholders’ investment | $ | 850,398 | $ | 876,043 |
(In thousands, except per share amounts) | Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues | $ | 558,026 | $ | 530,579 | $ | 1,128,010 | $ | 1,009,499 | |||||||
Operating expenses: | |||||||||||||||
Purchased transportation costs | 380,072 | 358,432 | 781,035 | 674,717 | |||||||||||
Personnel and related benefits | 75,838 | 75,672 | 151,725 | 150,082 | |||||||||||
Other operating expenses | 99,712 | 94,758 | 197,211 | 191,588 | |||||||||||
Depreciation and amortization | 9,124 | 9,210 | 18,189 | 18,515 | |||||||||||
Operations restructuring costs | 4,655 | — | 4,655 | — | |||||||||||
Total operating expenses | 569,401 | 538,072 | 1,152,815 | 1,034,902 | |||||||||||
Operating loss | (11,375 | ) | (7,493 | ) | (24,805 | ) | (25,403 | ) | |||||||
Interest expense: | |||||||||||||||
Interest expense - preferred stock | 31,609 | 25,040 | 38,724 | 25,040 | |||||||||||
Interest expense - debt | 2,623 | 3,315 | 5,051 | 9,840 | |||||||||||
Total interest expense | 34,232 | 28,355 | 43,775 | 34,880 | |||||||||||
Loss from debt extinguishment | — | 9,827 | — | 9,827 | |||||||||||
Loss before income taxes | (45,607 | ) | (45,675 | ) | (68,580 | ) | (70,110 | ) | |||||||
Benefit from income taxes | (3,652 | ) | (7,812 | ) | (2,982 | ) | (12,304 | ) | |||||||
Net loss | $ | (41,955 | ) | $ | (37,863 | ) | $ | (65,598 | ) | $ | (57,806 | ) | |||
Loss per share: | |||||||||||||||
Basic | $ | (1.09 | ) | $ | (0.99 | ) | $ | (1.70 | ) | $ | (1.51 | ) | |||
Diluted | $ | (1.09 | ) | $ | (0.99 | ) | $ | (1.70 | ) | $ | (1.51 | ) | |||
Weighted average common stock outstanding: | |||||||||||||||
Basic | 38,507 | 38,412 | 38,479 | 38,389 | |||||||||||
Diluted | 38,507 | 38,412 | 38,479 | 38,389 |
(In thousands) | Six Months Ended | ||||||
June 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (65,598 | ) | $ | (57,806 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 18,552 | 19,302 | |||||
Change in fair value of preferred stock | 37,663 | 8,928 | |||||
Amortization of preferred stock issuance costs | 1,061 | 16,112 | |||||
Loss on disposal of property and equipment | 1,972 | 492 | |||||
Share-based compensation | 895 | 1,268 | |||||
Loss from debt extinguishment | — | 9,827 | |||||
Provision for bad debts | 2,030 | 1,601 | |||||
Deferred tax benefit | (3,544 | ) | (13,904 | ) | |||
Changes in: | |||||||
Accounts receivable | 27,156 | (12,271 | ) | ||||
Income tax receivable | 911 | 3,551 | |||||
Prepaid expenses and other assets | 6,900 | 3,438 | |||||
Accounts payable | (23,852 | ) | (20,883 | ) | |||
Accrued expenses and other liabilities | (5,052 | ) | 988 | ||||
Net cash used in operating activities | (906 | ) | (39,357 | ) | |||
Cash flows from investing activities: | |||||||
Capital expenditures | (11,391 | ) | (7,278 | ) | |||
Proceeds from sale of property and equipment | 927 | 1,970 | |||||
Net cash used in investing activities | (10,464 | ) | (5,308 | ) | |||
Cash flows from financing activities: | |||||||
Borrowings under revolving credit facilities | — | 63,368 | |||||
Payments under revolving credit facilities | — | (236,068 | ) | ||||
Debt borrowings | 557 | — | |||||
Debt payments | (11,846 | ) | (277,750 | ) | |||
Debt issuance cost | — | (842 | ) | ||||
Cash collateralization of letters of credit | — | (20,737 | ) | ||||
Payments of debt extinguishment costs | — | (4,911 | ) | ||||
Preferred stock issuance costs | (1,061 | ) | (16,112 | ) | |||
Proceeds from issuance of preferred stock and warrants | 34,999 | 540,500 | |||||
Issuance of restricted stock units, net of taxes paid | (76 | ) | (215 | ) | |||
Payment of capital lease obligation | (1,267 | ) | (2,415 | ) | |||
Net cash provided by financing activities | 21,306 | 44,818 | |||||
Net increase in cash and cash equivalents | 9,936 | 153 | |||||
Cash and cash equivalents: | |||||||
Beginning of period | 25,702 | 29,513 | |||||
End of period | $ | 35,638 | $ | 29,666 | |||
Supplemental cash flow information: | |||||||
Cash paid for interest | $ | 4,966 | $ | 9,727 | |||
Cash paid for (refunds from) income taxes, net | $ | 144 | $ | (2,426 | ) | ||
Non-cash capital leases and other obligations to acquire assets | $ | 10,451 | $ | — |
TES | LTL | Ascent | Total | ||||||||||||
Goodwill | $ | 92,926 | $ | — | $ | 171,900 | $ | 264,826 |
TES | LTL | Ascent | Total | ||||||||||||
Accumulated goodwill impairment charges | $ | 132,408 | $ | 197,312 | $ | 46,763 | $ | 376,483 |
June 30, 2018 | December 31, 2017 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||
TES | $ | 55,008 | $ | (20,735 | ) | $ | 34,273 | $ | 55,008 | $ | (18,470 | ) | $ | 36,538 | |||||||||
LTL | 2,498 | (1,839 | ) | 659 | 2,498 | (1,748 | ) | 750 | |||||||||||||||
Ascent | 27,152 | (16,022 | ) | 11,130 | 27,152 | (14,792 | ) | 12,360 | |||||||||||||||
Total | $ | 84,658 | $ | (38,596 | ) | $ | 46,062 | $ | 84,658 | $ | (35,010 | ) | $ | 49,648 |
Remainder 2018 | $ | 3,537 | |
2019 | 6,819 | ||
2020 | 6,447 | ||
2021 | 6,265 | ||
2022 | 5,826 | ||
Thereafter | 17,168 | ||
Total | $ | 46,062 |
June 30, 2018 | December 31, 2017 | ||||||
Revolving credit facility | $ | 147,037 | $ | 147,037 | |||
Term loans | 44,570 | 55,858 | |||||
Total debt | $ | 191,607 | $ | 202,895 | |||
Less: Debt issuance costs and discount | (3,123 | ) | (3,485 | ) | |||
Total debt, net of debt issuance costs and discount | 188,484 | 199,410 | |||||
Less: Current maturities | (10,012 | ) | (9,950 | ) | |||
Total debt, net of current maturities | $ | 178,472 | $ | 189,460 |
• | $200.0 million asset-based revolving line of credit, of which $20.0 million may be used for swing line loans and $30.0 million may be used for letters of credit; |
• | $56.8 million term loan facility; and |
• | $35.0 million asset-based facility available to finance future capital expenditures, which was subsequently terminated before being utilized. |
June 30, 2018 | December 31, 2017 | ||||||
Preferred stock: | |||||||
Series B Preferred | $ | 171,917 | $ | 146,649 | |||
Series C Preferred | 83,541 | 76,096 | |||||
Series D Preferred | 2,258 | 6,672 | |||||
Series E Preferred | 39,456 | 33,900 | |||||
Series E-1 Preferred | 38,807 | — | |||||
Total Preferred stock | $ | 335,979 | $ | 263,317 |
Series B | Series C | Series D | Series E | Series E-1 | |
Shares at $0.01 Par Value at Issuance | 155,000 | 55,000 | 100 | 90,000 | 35,728 |
Shares Outstanding at June 30, 2018 | 155,000 | 55,000 | 100 | 37,500 | 35,728 |
Price per Share | $1,000 | $1,000 | $1.00 | $1,000 | $1,000/$960 |
Dividend Rate | Adjusted LIBOR + 3.00% + Additional Rate (4.75-12.50%) based on leverage. Additional 3.00% upon certain triggering events. | Adjusted LIBOR + 3.00% + Additional Rate (4.75-12.50%) based on leverage. Additional 3.00% upon certain triggering events. | Right to participate equally and ratably in all cash dividends paid on common stock. | Adjusted LIBOR + 5.25% + Additional Rate (8.50%). Additional 3.00% upon certain triggering events. | Adjusted LIBOR + 5.25% + Additional Rate (8.50%). Additional 3.00% upon certain triggering events. |
Dividend Rate at June 30, 2018 | 17.396% | 17.396% | N/A | 15.646% | 15.646% |
Redemption Term | 8 Years | 8 Years | 8 Years | 6 Years | 6 Years |
Redemption Rights | From Closing Date: 12-24 months: 105% 24-36 months: 103% | 65% premium (subject to stock movement) | From Closing Date: 0-12 months: 106.5% 12-24 months: 103.5% | From Closing Date: 0-12 months: 106.5% 12-24 months: 103.5% |
• | the Series B Preferred Stock using a lattice model that takes into consideration the Company's call right on the instrument based on simulated future interest rates; |
• | the Series C Preferred Stock using a lattice model that takes into consideration the future redemption value on the instrument, which is tied to the Company's stock price; |
• | the Series D Preferred Stock using a static discounted cash flow approach, where the expected redemption value of the instrument is based on the value of the Company's stock as of the measurement date grown at the risk-free rate; and |
• | the Series E and E-1 Preferred Stock via application of both (i) a static discounted cash flow approach and (ii) a lattice model that takes into consideration the Company's call right on this instrument based on simulated future interest rates. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30 | June 30 | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Balance, beginning of period | $ | 286,874 | $ | — | $ | 263,317 | $ | — | |||||||
Issuance of preferred stock at fair value | 17,499 | 537,930 | 34,999 | 537,930 | |||||||||||
Change in fair value of preferred stock (1) | 31,606 | 8,928 | 37,663 | 8,928 | |||||||||||
Balance, end of period | $ | 335,979 | $ | 546,858 | $ | 335,979 | $ | 546,858 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Beginning balance | $ | 88,538 | $ | 177,940 | $ | 111,733 | $ | 197,468 | |||||||
Net loss | (41,955 | ) | (37,863 | ) | (65,598 | ) | (57,806 | ) | |||||||
Share-based compensation | 372 | 658 | 895 | 1,268 | |||||||||||
Issuance of warrants | — | 2,571 | — | 2,571 | |||||||||||
Issuance of restricted stock units, net of taxes paid | (1 | ) | (20 | ) | (76 | ) | (215 | ) | |||||||
Ending balance | $ | 46,954 | $ | 143,286 | $ | 46,954 | $ | 143,286 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenues: | ||||||||||||||||
TES | 300,037 | 262,797 | $ | 626,104 | $ | 490,284 | ||||||||||
LTL | 117,164 | 121,968 | 230,289 | 230,744 | ||||||||||||
Ascent | 144,630 | 148,088 | 279,573 | 293,560 | ||||||||||||
Eliminations | (3,805 | ) | (2,274 | ) | (7,956 | ) | (5,089 | ) | ||||||||
Total | $ | 558,026 | $ | 530,579 | $ | 1,128,010 | $ | 1,009,499 | ||||||||
Operating (loss) income: | ||||||||||||||||
TES(1) | (750 | ) | 3,456 | $ | 3,650 | $ | 1,735 | |||||||||
LTL | (3,743 | ) | (3,264 | ) | (12,427 | ) | (5,985 | ) | ||||||||
Ascent | 7,314 | 7,217 | 14,021 | 14,852 | ||||||||||||
Corporate | (14,196 | ) | (14,902 | ) | (30,049 | ) | (36,005 | ) | ||||||||
Total | $ | (11,375 | ) | $ | (7,493 | ) | $ | (24,805 | ) | $ | (25,403 | ) | ||||
Interest expense | 34,232 | 28,355 | 43,775 | 34,880 | ||||||||||||
Loss from debt extinguishment | — | 9,827 | $ | — | $ | 9,827 | ||||||||||
Loss before income taxes | $ | (45,607 | ) | $ | (45,675 | ) | $ | (68,580 | ) | $ | (70,110 | ) | ||||
Depreciation and amortization: | ||||||||||||||||
TES | 6,241 | 6,197 | $ | 12,537 | $ | 12,473 | ||||||||||
LTL | 900 | 953 | 1,813 | 1,914 | ||||||||||||
Ascent | 1,168 | 1,631 | 2,356 | 3,287 | ||||||||||||
Corporate | 815 | 429 | 1,483 | 841 | ||||||||||||
Total | $ | 9,124 | $ | 9,210 | $ | 18,189 | $ | 18,515 | ||||||||
Capital expenditures:(2) | ||||||||||||||||
TES | 2,940 | 2,047 | $ | 5,937 | $ | 5,391 | ||||||||||
LTL | 55 | 387 | 255 | 631 | ||||||||||||
Ascent | 355 | 289 | 709 | 571 | ||||||||||||
Corporate | 12,510 | 625 | 14,934 | 685 | ||||||||||||
Total | $ | 15,860 | $ | 3,348 | $ | 21,835 | $ | 7,278 |
June 30, 2018 | December 31, 2017 | |||||||
Assets: | ||||||||
TES | $ | 417,144 | $ | 458,945 | ||||
LTL | 80,354 | 79,065 | ||||||
Ascent | 271,620 | 271,400 | ||||||
Corporate | 83,316 | 68,445 | ||||||
Eliminations (3) | (2,036 | ) | (1,812 | ) | ||||
Total | $ | 850,398 | $ | 876,043 |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
(In thousands, except for %’s) | Three Months Ended June 30, 2018 | ||||||||||||||||||||||||
TES | % | LTL | % | Ascent | % | Corporate/ Eliminations | Total | ||||||||||||||||||
Revenues | $ | 300,037 | 53.8 | % | $ | 117,164 | 21.0 | % | $ | 144,630 | 25.9 | % | $ | (3,805 | ) | $ | 558,026 | ||||||||
Operating expenses: | |||||||||||||||||||||||||
Purchased transportation costs | 194,702 | 64.9 | % | 82,318 | 70.3 | % | 106,861 | 73.9 | % | (3,809 | ) | 380,072 | |||||||||||||
Personnel and related benefits | 39,794 | 13.3 | % | 17,428 | 14.9 | % | 12,465 | 8.6 | % | 6,151 | 75,838 | ||||||||||||||
Other operating expenses (1) | 60,050 | 20.0 | % | 20,261 | 17.3 | % | 16,822 | 11.6 | % | 7,234 | 104,367 | ||||||||||||||
Depreciation and amortization | 6,241 | 2.1 | % | 900 | 0.8 | % | 1,168 | 0.8 | % | 815 | 9,124 | ||||||||||||||
Total operating expenses | 300,787 | 100.2 | % | 120,907 | 103.2 | % | 137,316 | 94.9 | % | 10,391 | 569,401 | ||||||||||||||
Operating income (loss) | (750 | ) | (0.2 | )% | (3,743 | ) | (3.2 | )% | 7,314 | 5.1 | % | (14,196 | ) | (11,375 | ) | ||||||||||
Total interest expense | 34,232 | ||||||||||||||||||||||||
Loss before income taxes | (45,607 | ) | |||||||||||||||||||||||
Benefit from income taxes | (3,652 | ) | |||||||||||||||||||||||
Net loss | $ | (41,955 | ) |
(In thousands, except for %’s) | Three Months Ended June 30, 2017 | ||||||||||||||||||||||||
TES | % | LTL | % | Ascent | % | Corporate/ Eliminations | Total | ||||||||||||||||||
Revenues | $ | 262,797 | 49.5 | % | $ | 121,968 | 23.0 | % | $ | 148,088 | 27.9 | % | $ | (2,274 | ) | $ | 530,579 | ||||||||
Operating expenses: | |||||||||||||||||||||||||
Purchased transportation costs | 165,544 | 63.0 | % | 86,792 | 71.2 | % | 108,370 | 73.2 | % | (2,274 | ) | 358,432 | |||||||||||||
Personnel and related benefits | 38,029 | 14.5 | % | 17,922 | 14.7 | % | 15,635 | 10.6 | % | 4,086 | 75,672 | ||||||||||||||
Other operating expenses | 49,571 | 18.9 | % | 19,565 | 16.0 | % | 15,235 | 10.3 | % | 10,387 | 94,758 | ||||||||||||||
Depreciation and amortization | 6,197 | 2.4 | % | 953 | 0.8 | % | 1,631 | 1.1 | % | 429 | 9,210 | ||||||||||||||
Total operating expenses | 259,341 | 98.7 | % | 125,232 | 102.7 | % | 140,871 | 95.1 | % | 12,628 | 538,072 | ||||||||||||||
Operating income (loss) | 3,456 | 1.3 | % | (3,264 | ) | (2.7 | )% | 7,217 | 4.9 | % | (14,902 | ) | (7,493 | ) | |||||||||||
Total interest expense | 28,355 | ||||||||||||||||||||||||
Loss from debt extinguishment | 9,827 | ||||||||||||||||||||||||
Loss before income taxes | (45,675 | ) | |||||||||||||||||||||||
Benefit from income taxes | (7,812 | ) | |||||||||||||||||||||||
Net loss | $ | (37,863 | ) |
(In thousands) | Three Months Ended June 30, 2018 | ||||||||||||||||||
TES | LTL | Ascent | Corporate/ Eliminations | Total | |||||||||||||||
Net (loss) income | $ | (758 | ) | $ | (3,763 | ) | $ | 7,285 | $ | (44,719 | ) | $ | (41,955 | ) | |||||
Plus: Total interest expense | 8 | 20 | 29 | 34,175 | 34,232 | ||||||||||||||
Plus: Benefit from income taxes | — | — | — | (3,652 | ) | (3,652 | ) | ||||||||||||
Plus: Depreciation and amortization | 6,241 | 900 | 1,168 | 815 | 9,124 | ||||||||||||||
Plus: Long-term incentive compensation expenses | — | — | — | 426 | 426 | ||||||||||||||
Plus: Operations restructuring costs | 4,655 | — | — | — | 4,655 | ||||||||||||||
Plus: Corporate restructuring and restatement costs | — | — | — | 3,911 | 3,911 | ||||||||||||||
Adjusted EBITDA(2) | $ | 10,146 | $ | (2,843 | ) | $ | 8,482 | $ | (9,044 | ) | $ | 6,741 |
(In thousands) | Three Months Ended June 30, 2017 | ||||||||||||||||||||||||||
TES | LTL | Ascent | Corporate/ Eliminations | Total | Less: Unitrans | Total w/o Unitrans | |||||||||||||||||||||
Net (loss) income | $ | 3,475 | $ | (3,312 | ) | $ | 7,181 | $ | (45,207 | ) | $ | (37,863 | ) | $ | 2,026 | $ | (39,889 | ) | |||||||||
Plus: Total interest expense | (19 | ) | 48 | 36 | 28,290 | 28,355 | — | 28,355 | |||||||||||||||||||
Plus: Benefit from income taxes | — | — | — | (7,812 | ) | (7,812 | ) | — | (7,812 | ) | |||||||||||||||||
Plus: Depreciation and amortization | 6,197 | 953 | 1,631 | 429 | 9,210 | 295 | 8,915 | ||||||||||||||||||||
Plus: Long-term incentive compensation expenses | — | — | — | 659 | 659 | — | 659 | ||||||||||||||||||||
Plus: Loss on debt extinguishments | — | — | — | 9,827 | 9,827 | — | 9,827 | ||||||||||||||||||||
Plus: Corporate restructuring and restatement costs | — | — | — | 9,052 | 9,052 | — | 9,052 | ||||||||||||||||||||
Adjusted EBITDA(2) | $ | 9,653 | $ | (2,311 | ) | $ | 8,848 | $ | (4,762 | ) | $ | 11,428 | $ | 2,321 | $ | 9,107 |
(In thousands, except for %’s) | Six Months Ended June 30, 2018 | ||||||||||||||||||||||||
TES | % | LTL | % | Ascent | % | Corporate/ Eliminations | Total | ||||||||||||||||||
Revenues | $ | 626,104 | 55.5 | % | $ | 230,289 | 20.4 | % | $ | 279,573 | 24.8 | % | $ | (7,956 | ) | $ | 1,128,010 | ||||||||
Operating expenses: | |||||||||||||||||||||||||
Purchased transportation costs | 419,303 | 67.0 | % | 164,315 | 71.4 | % | 205,374 | 73.5 | % | (7,957 | ) | 781,035 | |||||||||||||
Personnel and related benefits | 78,962 | 12.6 | % | 35,563 | 15.4 | % | 24,606 | 8.8 | % | 12,594 | 151,725 | ||||||||||||||
Other operating expenses (1) | 111,652 | 17.8 | % | 41,025 | 17.8 | % | 33,216 | 11.9 | % | 15,973 | 201,866 | ||||||||||||||
Depreciation and amortization | 12,537 | 2.0 | % | 1,813 | 0.8 | % | 2,356 | 0.8 | % | 1,483 | 18,189 | ||||||||||||||
Total operating expenses | 622,454 | 99.4 | % | 242,716 | 105.4 | % | 265,552 | 95.0 | % | 22,093 | 1,152,815 | ||||||||||||||
Operating income (loss) | 3,650 | 0.6 | % | (12,427 | ) | (5.4 | )% | 14,021 | 5.0 | % | (30,049 | ) | (24,805 | ) | |||||||||||
Total interest expense | 43,775 | ||||||||||||||||||||||||
Loss before income taxes | (68,580 | ) | |||||||||||||||||||||||
Benefit from income taxes | (2,982 | ) | |||||||||||||||||||||||
Net loss | $ | (65,598 | ) |
(In thousands, except for %’s) | Six Months Ended June 30, 2017 | ||||||||||||||||||||||||
TES | % | LTL | % | Ascent | % | Corporate/ Eliminations | Total | ||||||||||||||||||
Revenues | $ | 490,284 | 48.6 | % | $ | 230,744 | 22.9 | % | $ | 293,560 | 29.1 | % | $ | (5,089 | ) | $ | 1,009,499 | ||||||||
Operating expenses: | |||||||||||||||||||||||||
Purchased transportation costs | 302,478 | 61.7 | % | 162,711 | 70.5 | % | 214,595 | 73.1 | % | (5,067 | ) | 674,717 | |||||||||||||
Personnel and related benefits | 76,084 | 15.5 | % | 34,737 | 15.1 | % | 31,009 | 10.6 | % | 8,252 | 150,082 | ||||||||||||||
Other operating expenses | 97,514 | 19.9 | % | 37,367 | 16.2 | % | 29,817 | 10.2 | % | 26,890 | 191,588 | ||||||||||||||
Depreciation and amortization | 12,473 | 2.5 | % | 1,914 | 0.8 | % | 3,287 | 1.1 | % | 841 | 18,515 | ||||||||||||||
Total operating expenses | 488,549 | 99.6 | % | 236,729 | 102.6 | % | 278,708 | 94.9 | % | 30,916 | 1,034,902 | ||||||||||||||
Operating income (loss) | 1,735 | 0.4 | % | (5,985 | ) | (2.6 | )% | 14,852 | 5.1 | % | (36,005 | ) | (25,403 | ) | |||||||||||
Total interest expense | 34,880 | ||||||||||||||||||||||||
Loss on debt extinguishment | 9,827 | ||||||||||||||||||||||||
Loss before income taxes | (70,110 | ) | |||||||||||||||||||||||
Benefit from income taxes | (12,304 | ) | |||||||||||||||||||||||
Net loss | $ | (57,806 | ) |
(In thousands) | Six Months Ended June 30, 2018 | ||||||||||||||||||
TES | LTL | Ascent | Corporate/ Eliminations | Total | |||||||||||||||
Net (loss) income | $ | 3,631 | $ | (12,483 | ) | $ | 13,962 | $ | (70,708 | ) | $ | (65,598 | ) | ||||||
Plus: Total interest expense | 19 | 56 | 59 | 43,641 | 43,775 | ||||||||||||||
Plus: Benefit from income taxes | — | — | — | (2,982 | ) | (2,982 | ) | ||||||||||||
Plus: Depreciation and amortization | 12,537 | 1,813 | 2,356 | 1,483 | 18,189 | ||||||||||||||
Plus: Long-term incentive compensation expenses | — | — | — | 1,003 | 1,003 | ||||||||||||||
Plus: Operations restructuring costs | 4,655 | — | — | — | 4,655 | ||||||||||||||
Plus: Corporate restructuring and restatement costs | — | — | — | 10,824 | 10,824 | ||||||||||||||
Adjusted EBITDA(2) | $ | 20,842 | $ | (10,614 | ) | $ | 16,377 | $ | (16,739 | ) | $ | 9,866 |
(In thousands) | Six Months Ended June 30, 2017 | ||||||||||||||||||||||||||
TES | LTL | Ascent | Corporate/ Eliminations | Total | Less: Unitrans | Total w/o Unitrans | |||||||||||||||||||||
Net (loss) income | $ | 1,771 | $ | (6,111 | ) | $ | 14,777 | $ | (68,243 | ) | $ | (57,806 | ) | $ | 4,453 | $ | (62,259 | ) | |||||||||
Plus: Total interest expense | (36 | ) | 126 | 75 | 34,715 | 34,880 | — | 34,880 | |||||||||||||||||||
Plus: Benefit from income taxes | — | — | — | (12,304 | ) | (12,304 | ) | — | (12,304 | ) | |||||||||||||||||
Plus: Depreciation and amortization | 12,473 | 1,914 | 3,287 | 841 | 18,515 | 589 | 17,926 | ||||||||||||||||||||
Plus: Long-term incentive compensation expenses | — | — | — | 1,268 | 1,268 | — | 1,268 | ||||||||||||||||||||
Plus: Loss on debt extinguishments | — | — | — | 9,827 | 9,827 | — | 9,827 | ||||||||||||||||||||
Plus: Corporate restructuring and restatement costs | — | — | — | 16,750 | 16,750 | — | 16,750 | ||||||||||||||||||||
Adjusted EBITDA(2) | $ | 14,208 | $ | (4,071 | ) | $ | 18,139 | $ | (17,146 | ) | $ | 11,130 | $ | 5,042 | $ | 6,088 |
• | Adjusted EBITDA does not reflect our cash expenditures, future requirements for capital expenditures, or contractual commitments; |
• | Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; |
• | Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt or dividend payments on our 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 our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. |
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||||||||||
Revenue | $ | 117,164 | $ | 121,968 | (3.9 | )% | $ | 230,289 | $ | 230,744 | (0.2 | )% | |||||||||
Less: Backhaul Revenue | 3,133 | — | 3,133 | — | |||||||||||||||||
Less: Eliminations | (69 | ) | (64 | ) | (146 | ) | (116 | ) | |||||||||||||
Adjusted Revenue | 114,100 | 122,032 | (6.5 | %) | 227,302 | 230,860 | (1.5 | %) | |||||||||||||
Adjusted Revenue excluding fuel | 98,397 | 108,191 | (9.1 | %) | 196,735 | 204,152 | (3.6 | %) | |||||||||||||
Adjusted Revenue per hundredweight (incl. fuel) | $ | 21.03 | $ | 19.73 | 6.6 | % | $ | 21.00 | $ | 19.56 | 7.4 | % | |||||||||
Adjusted Revenue per hundredweight (excl. fuel) | $ | 18.13 | $ | 17.49 | 3.7 | % | $ | 18.17 | $ | 17.29 | 5.1 | % | |||||||||
Adjusted Revenue per shipment (incl. fuel) | $ | 240.77 | $ | 212.86 | 13.1 | % | $ | 236.54 | $ | 211.66 | 11.8 | % | |||||||||
Adjusted Revenue per shipment (excl. fuel) | $ | 207.63 | $ | 188.72 | 10.0 | % | $ | 204.73 | $ | 187.17 | 9.4 | % | |||||||||
Weight per shipment (lbs.) | 1,145 | 1,079 | 6.1 | % | 1,127 | 1,082 | 4.2 | % | |||||||||||||
Shipments per day | 7,405 | 8,958 | (17.3 | %) | 7,507 | 8,521 | (11.9 | )% |
Series B | Series C | Series D | Series E | Series E-1 | |
Shares at $0.01 Par Value at Issuance | 155,000 | 55,000 | 100 | 90,000 | 35,728 |
Shares Outstanding at June 30, 2018 | 155,000 | 55,000 | 100 | 37,500 | 35,728 |
Price per Share | $1,000 | $1,000 | $1.00 | $1,000 | $1,000/$960 |
Dividend Rate | Adjusted LIBOR + 3.00% + Additional Rate (4.75-12.50%) based on leverage. Additional 3.00% upon certain triggering events. | Adjusted LIBOR + 3.00% + Additional Rate (4.75-12.50%) based on leverage. Additional 3.00% upon certain triggering events. | Right to participate equally and ratably in all cash dividends paid on common stock. | Adjusted LIBOR + 5.25% + Additional Rate (8.50%). Additional 3.00% upon certain triggering events. | Adjusted LIBOR + 5.25% + Additional Rate (8.50%). Additional 3.00% upon certain triggering events. |
Dividend Rate at June 30, 2018 | 17.396% | 17.396% | N/A | 15.646% | 15.646% |
Redemption Term | 8 Years | 8 Years | 8 Years | 6 Years | 6 Years |
Redemption Rights | From Closing Date: 12-24 months: 105% 24-36 months: 103% | 65% premium (subject to stock movement) | From Closing Date: 0-12 months: 106.5% 12-24 months: 103.5% | From Closing Date: 0-12 months: 106.5% 12-24 months: 103.5% |
• | $200.0 million asset-based revolving line of credit, of which $20.0 million may be used for swing line loans and $30.0 million may be used for letters of credit; |
• | $56.8 million term loan facility; and |
• | $35.0 million asset-based facility available to finance future capital expenditures, which was subsequently terminated before utilized. |
Six Months Ended | |||||||
June 30, | |||||||
2018 | 2017 | ||||||
Net cash (used in) provided by: | |||||||
Operating activities | $ | (906 | ) | (39,357 | ) | ||
Investing activities | (10,464 | ) | (5,308 | ) | |||
Financing activities | 21,306 | 44,818 | |||||
Net change in cash and cash equivalents | $ | 9,936 | $ | 153 |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
ITEM 4. | CONTROLS AND PROCEDURES. |
ITEM 1. | LEGAL PROCEEDINGS. |
ITEM 1A. | RISK FACTORS. |
ITEM 6. | EXHIBITS |
Exhibit Number | Exhibit | |
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
ROADRUNNER TRANSPORTATION SYSTEMS, INC. | |||
Date: August 7, 2018 | By: | /s/ Terence R. Rogers | |
Terence R. Rogers | |||
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Date: August 7, 2018 | /s/ Curtis W. Stoelting | |
Curtis W. Stoelting | ||
Chief Executive Officer (Principal Executive Officer) |
Date: August 7, 2018 | /s/ Terence R. Rogers | |
Terence R. Rogers | ||
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Curtis W. Stoelting |
Curtis W. Stoelting |
Chief Executive Officer (Principal Executive Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Terence R. Rogers |
Terence R. Rogers |
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Aug. 01, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Roadrunner Transportation Systems, Inc. | |
Entity Central Index Key | 0001440024 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 38,507,498 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowances | $ 10,404 | $ 10,891 |
Property and equipment, net of accumulated depreciation | $ 118,064 | $ 107,037 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 38,507,000 | 38,423,000 |
Common stock, shares outstanding (in shares) | 38,507,000 | 38,423,000 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Statement [Abstract] | ||||
Revenues | $ 558,026 | $ 530,579 | $ 1,128,010 | $ 1,009,499 |
Operating expenses: | ||||
Purchased transportation costs | 380,072 | 358,432 | 781,035 | 674,717 |
Personnel and related benefits | 75,838 | 75,672 | 151,725 | 150,082 |
Other operating expenses | 99,712 | 94,758 | 197,211 | 191,588 |
Depreciation and amortization | 9,124 | 9,210 | 18,189 | 18,515 |
Operations restructuring costs | 4,655 | 0 | 4,655 | 0 |
Total operating expenses | 569,401 | 538,072 | 1,152,815 | 1,034,902 |
Operating loss | (11,375) | (7,493) | (24,805) | (25,403) |
Interest expense: | 34,232 | 28,355 | 43,775 | 34,880 |
Interest expense - preferred stock | 31,609 | 25,040 | 38,724 | 25,040 |
Interest expense - debt | 2,623 | 3,315 | 5,051 | 9,840 |
Total interest expense | 34,232 | 28,355 | 43,775 | 34,880 |
Loss from debt extinguishment | 0 | 9,827 | 0 | 9,827 |
Loss before income taxes | (45,607) | (45,675) | (68,580) | (70,110) |
Benefit from income taxes | (3,652) | (7,812) | (2,982) | (12,304) |
Net loss | $ (41,955) | $ (37,863) | $ (65,598) | $ (57,806) |
Loss per share: | ||||
Basic (in dollars per share) | $ (1.09) | $ (0.99) | $ (1.70) | $ (1.51) |
Diluted (in dollars per share) | $ (1.09) | $ (0.99) | $ (1.70) | $ (1.51) |
Weighted average common stock outstanding: | ||||
Basic (in shares) | 38,507 | 38,412 | 38,479 | 38,389 |
Diluted (in shares) | 38,507 | 38,412 | 38,479 | 38,389 |
Organization, Nature of Business and Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Nature of Business and Significant Accounting Policies | Organization, Nature of Business and Significant Accounting Policies Nature of Business Roadrunner Transportation Systems, Inc. (the “Company”) is headquartered in Downers Grove, Illinois with operations primarily in the United States and is organized in the following three segments: Truckload & Express Services (“TES”), Less-than-Truckload (“LTL”), and Ascent Global Logistics (“Ascent”). Within its TES segment, the Company serves customers throughout North America and provides the following services: air and ground expedite; over-the-road operations, including dry van, temperature controlled and flatbed; intermodal drayage and chassis management; and local, warehousing and other logistics. Within its LTL segment, the Company delivers LTL shipments throughout the United States and parts of Canada and operates service centers, complemented by relationships with numerous pick-up and delivery agents. Within its Ascent segment, the Company provides third-party domestic freight management, international freight forwarding, customs brokerage, and retail consolidation solutions. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated in consolidation. In the Company's opinion, except as noted below with respect to the change in accounting principle, the change in segments, and the restructuring charges described in Note 13, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the operations for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Change in Accounting Principle On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), which was updated in August 2015 by ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-08 (“ASU 2016-08”), Revenue from Contracts with Customers - Principal versus Agent Considerations (Reporting Revenue Gross versus Net). Under ASU 2016-08, when another party is involved in providing goods or services to a customer, an entity is required to determine whether the nature of its promise is to provide the specified good or service (that is, the entity is a principal) or to arrange for that good or service to be provided by another party. When the principal entity satisfies a performance obligation, the entity recognizes revenue in the gross amount. When an entity that is an agent satisfies the performance obligation, that entity recognizes revenue in the amount of any fee or commission to which it expects to be entitled. The Company determined key factors from the five-step process to recognize revenue as prescribed by the new standard that may be applicable to each of the Company's operating businesses that roll up into its three segments. Significant customers and contracts from each business unit were identified and the Company reviewed these contracts. The Company completed the evaluation of the provisions of these contracts and compared the historical accounting policies and practices to the requirements of the new standard including the related qualitative disclosures regarding the potential impact of the effects of the accounting policies and a comparison to the Company's previous revenue recognition policies. The Company determined that certain transactions with customers required a change in the timing of when revenue and related expense is recognized. The guidance was applied only to contracts that were not completed at the date of initial adoption. The Company elected the modified retrospective method which required a cumulative adjustment to retained earnings instead of retrospectively adjusting prior periods. The Company recorded a $0.9 million benefit to opening retained earnings as of January 1, 2018 for the cumulative impact of adoption related to the recognition of in-transit revenue. Results for 2018 are presented under Topic 606, while prior periods were not adjusted. The adoption of Topic 606 did not have a material impact on the Company's condensed consolidated financial statements for the three and six months ended June 30, 2018. The disclosure requirements of Topic 606 are included within the Company's revised revenue recognition accounting policy below. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Segment Reporting The Company determines its segments based on the information utilized by the chief operating decision maker, the Company’s Chief Executive Officer, to allocate resources and assess performance. Based on this information, the Company has determined that it has three segments: TES, LTL, and Ascent. The Company changed its segment reporting effective January 1, 2018 when it integrated its truckload brokerage business into the Ascent domestic freight management business. Segment information for prior periods has been revised to align with the new segment structure. Revenue Recognition (effective January 1, 2018) The Company’s revenues are primarily derived from transportation services which includes providing freight and carrier services both domestically and internationally via land, air, and sea. The Company disaggregates revenue among its three segments, TES, LTL and Ascent, as presented in Note 12. Performance Obligations - A performance obligation is created once a customer agreement with an agreed upon transaction price exists. The terms and conditions of the Company’s agreements with customers are generally consistent within each segment. The transaction price is typically fixed and determinable and is not contingent upon the occurrence or non-occurrence of any other event. The transaction price is generally due 30 to 60 days from the date of invoice. The Company’s transportation service is a promise to move freight to a customer’s destination, with the transit period typically being less than one week. The Company views the transportation services it provides to its customers as a single performance obligation. These performance obligations are satisfied and recognized in revenue over the requisite transit period as the customer’s goods move from origin to destination. The Company determines the period to recognize revenue in transit based upon the departure date and the delivery date, which may be estimated if delivery has not occurred as of the reporting date. Determining the transit period and the percentage of completion as of the reporting date requires management to make judgments that affect the timing of revenue recognized. The Company has determined that revenue recognition over the transit period provides a reasonable estimate of the transfer of goods and services to its customers as the Company’s obligation is performed over the transit period. Principal vs. Agent Considerations - The Company utilizes independent contractors and third-party carriers in the performance of some transportation services. The Company evaluates whether its performance obligation is a promise to transfer services to the customer (as the principal) or to arrange for services to be provided by another party (as the agent) using a control model. This evaluation determined that the Company is in control of establishing the transaction price, managing all aspects of the shipments process and taking the risk of loss for delivery, collection, and returns. Based on the Company’s evaluation of the control model, it determined that all of the Company’s major businesses act as the principal rather than the agent within their revenue arrangements and such revenues are reported on a gross basis. Contract Balances and Costs - The Company applies the practical expedient in Topic 606 that permits the Company to not disclose the aggregate amount of transaction price allocated to performance obligations that are unsatisfied as of the end of the period as the Company's contracts have an expected length of one year or less. The Company also applies the practical expedient in Topic 606 that permits the recognition of incremental costs of obtaining contracts as an expense when incurred if the amortization period of such costs is one year or less. These costs are included purchased transportation costs. New Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which will be effective for the Company in 2019. For financing leases, a lessee is required to: (1) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments; (2) recognize interest on the lease liability separately from amortization of the right-of-use asset; and (3) classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows. For operating leases, a lessee is required to: (1) recognize the right-to-use asset and a lease liability, initially measured at the present value of the lease payments; (2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term generally on a straight-line basis; and (3) classify all cash payments within operating activities in the statement of cash flows. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying assets not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The Company is in the process of evaluating the guidance in ASU 2016-02 and will determine the total impact of the new guidance based on the current lease arrangements that are expected to remain in place. The Company expects adoption of this guidance will have a material impact on the Company's consolidated balance sheets given the Company will be required to record operating leases with lease terms greater than 12 months within assets and liabilities on the consolidated balance sheets. The Company has not yet determined how it will handle lease terms of 12 months or less. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740) Intra-Entity Transfers of Assets Other than Inventory (“ASU 2016-16”), which will be effective for the Company in 2018. GAAP currently prohibits the recognition of current and deferred income taxes for intra-entity asset transfers other than inventory (e.g. property and equipment) until the asset has been sold to an outside party. Under ASU 2016-16, the FASB decided that an entity should recognize the income tax consequences of an intra-entity transfer of an asset when the transfer occurs. ASU 2016-16 does not include any new disclosure requirements; however, existing disclosure around the rate reconciliations and types of temporary differences and/or carryforward that give rise to a significant portion of deferred income taxes may be applicable. The Company adopted ASU 2016-16 effective January 1, 2018 and it did not have a material impact on the Company’s condensed consolidated financial statements. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of all acquisitions over the estimated fair value of the net assets acquired. The Company evaluates goodwill and intangible assets for impairment at least annually or more frequently whenever events or changes in circumstances indicate that the asset may be impaired, or in the case of goodwill, the fair value of the reporting unit is below its carrying amount. The analysis of potential impairment of goodwill requires the Company to compare the estimated fair value at each of its reporting units to its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds the estimated fair value of the reporting unit, a non-cash goodwill impairment loss is recognized as an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. For purposes of the impairment analysis, the fair value of the Company’s reporting units is estimated based upon an average of the market approach and the income approach, both of which incorporate numerous assumptions and estimates such as company forecasts, discount rates, and growth rates, among others. The determination of the fair value of the reporting units and the allocation of that value to individual assets and liabilities within those reporting units requires the Company to make significant estimates and assumptions. These estimates and assumptions primarily include, but are not limited to, the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industries in which the Company competes, the discount rate, terminal growth rates, and forecasts of revenue, operating income, and capital expenditures. The allocation requires several analyses to determine fair value of assets and liabilities including, among others, customer relationships and property and equipment. Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting units, the amount of the goodwill impairment charge, or both. Future declines in the overall market value of the Company's stock may also result in a conclusion that the fair value of one or more reporting units has declined below its carrying value. The Company has four reporting units for its three segments: one reporting unit for its TES segment; one reporting unit for its LTL segment; and two reporting units for its Ascent segment, which are the Domestic and International Logistics reporting unit and the Warehousing & Consolidation reporting unit. In connection with the change in segments as indicated in Note 1, the Company reallocated $5.8 million of goodwill between the TES and Ascent segments. The Company conducts its goodwill impairment analysis for each of its four reporting units as of July 1 of each year. However, in connection with the change in segments, the Company conducted an impairment analysis as of January 1, 2018 and determined there was no impairment. There were no changes to total goodwill during the first half of 2018. The following is a breakdown of the Company's goodwill as of June 30, 2018 and December 31, 2017 by segment (in thousands):
There were no changes to the accumulated goodwill impairment during the first half of 2018. In connection with the change in segments as indicated in Note 1, the Company reallocated $25.1 million of accumulated goodwill impairment between the TES and Ascent segments. The following is a breakdown of the Company's accumulated goodwill impairment losses as of June 30, 2018 by segment (in thousands):
Intangible assets consist primarily of customer relationships acquired from business acquisitions. In connection with the change in segments as indicated in Note 1, the Company reallocated net intangible assets of $0.3 million between the TES and Ascent segments. Intangible assets as of June 30, 2018 and December 31, 2017 were as follows (in thousands):
The customer relationships intangible assets are amortized over their estimated useful lives, ranging from five to 12 years. Amortization expense was $1.8 million and $2.0 million for the three months ended June 30, 2018 and 2017, respectively. Amortization expense was $3.6 million and $4.1 million for the six months ended June 30, 2018 and 2017, respectively. Estimated amortization expense for each of the next five years based on intangible assets as of June 30, 2018 is as follows (in thousands):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt as of June 30, 2018 and December 31, 2017 consisted of the following (in thousands):
On July 21, 2017, the Company entered into the Asset-Based Lending (“ABL”) Facility with BMO Harris Bank, N.A. and certain other lenders (the “ABL Facility”). The Company used the initial proceeds from the ABL Facility for working capital purposes and to redeem all of the outstanding shares of its Series F Preferred Stock. The ABL Facility matures on July 21, 2022. The ABL Facility consists of a:
Principal on the term loan facility is due in quarterly installments commencing on March 31, 2018. Borrowings under the ABL Facility are secured by substantially all of the assets of the Company. Borrowings under the ABL Facility bear interest at either the (a) LIBOR Rate (as defined in the credit agreement) plus an applicable margin in the range of 1.5% to 2.25%, or (b) the Base Rate (as defined in the credit agreement) plus an applicable margin in the range of 0.5% to 1.25%. The ABL Facility contains a minimum fixed charge coverage ratio financial covenant that must be maintained when excess availability falls below a specified amount. The ABL Facility also provides for the issuance of up to $30.0 million in letters of credit. As of June 30, 2018, the Company had outstanding letters of credit totaling $16.4 million. Availability under the ABL Facility was $21.6 million as of June 30, 2018. In addition, the ABL Facility contains negative covenants limiting, among other things, additional indebtedness, transactions with affiliates, additional liens, sales of assets, dividends, investments and advances, prepayments of debt, mergers and acquisitions, and other matters customarily restricted. The ABL Facility also contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the credit agreement to be in full force and effect, and a change of control of the Company's business. On December 15, 2017, the Company entered into a First Amendment to the ABL Facility. Pursuant to the First Amendment the ABL Facility was amended to (i) reduce the maximum borrowing amount under the revolving line of credit by $15.0 million and (ii) terminate the asset-based facility available to finance future capital expenditures. On January 30, 2018, the Company entered into a Second Amendment to the ABL Facility. Pursuant to the Second Amendment the ABL Facility was further amended to, among other things: (i) permit the Company to enter into an investment agreement with Elliott providing for the issuance of up to $52.5 million of preferred stock; and (ii) increase the applicable margin related to the term loan facility to LIBOR Rate plus 2.25% or December 31, 2017 Base Rate plus 1.25%. On March 14, 2018, the Company entered into a Third Amendment to the ABL Facility. Pursuant to the Third Amendment the ABL Facility was further amended to, among other things: (i) extend the date for delivery of the Company's consolidated financial statements for the first three quarters of 2017 (unaudited) until April 30, 2018; (ii) extend the date for delivery of the Company's consolidated financial statements for fiscal year 2017 (audited) until June 30, 2018; (iii) expand the permitted amount of capital leases and purchase money indebtedness from $35.0 million to $60.0 million; (iv) require us to pay for a new appraisal to be conducted by the administrative agent for the equipment pledged for the term loan within 60 days; (v) establish an additional availability reserve; and (vi) impose certain collateral reporting requirements. On August 3, 2018, the Company entered into a Fourth Amendment to the ABL Facility. See Note 14 for additional information. Prior to the ABL Facility, the Company had senior debt that was comprised of a revolving line of credit and a term loan. The senior debt was paid off with the issuance of preferred stock on May 2, 2017. In connection with the pay-off, the Company recorded a loss from debt extinguishment of $9.8 million. The Company also has a building and certain equipment classified as capital leases. The Company's obligation under these capital leases was $18.8 million and $9.6 million as of June 30, 2018 and December 31, 2017, respectively. |
Preferred Stock |
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Preferred Stock [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock Preferred stock as of as of June 30, 2018 and December 31, 2017 consisted of the following (in thousands):
The preferred stock is mandatorily redeemable and, as such, is presented as a liability on the condensed consolidated balance sheets. At each preferred stock dividend payment date, the Company has the option to pay the accrued dividends in cash or to defer them. Deferred dividends earn dividend income consistent with the underlying shares of preferred stock. The Company has elected to measure the value of its preferred stock using the fair value method. Under the fair value method, issuance costs are expensed as incurred. On March 1, 2018, the Company entered into the Series E-1 Preferred Stock Investment Agreement (the “Series E-1 Investment Agreement”) with affiliates of Elliott Management Corporation (“Elliott”), pursuant to which the Company agreed t issue and sell to Elliott from time to time until July 30, 2018 (the “Termination Date”), an aggregate of up to 54,750 shares of a newly created class of preferred stock designated as Series E-1 Cumulative Redeemable Preferred Stock, par value $0.01 per share (“Series E-1 Preferred Stock”), at a purchase price of $1,000 per share for the first 17,500 shares of Series E-1 Preferred Stock, $960 per share for the next 18,228 shares of Series E-1 Preferred Stock, and $920 per share for the final 19,022 shares of Series E-1 Preferred Stock. On March 1, 2018, the parties held an initial closing pursuant to which the Company issued and sold to Elliott 17,500 shares of Series E-1 Preferred Stock for an aggregate purchase price of $17.5 million. The proceeds of the sale of such shares of Series E-1 Preferred Stock were used to provide working capital to support the Company’s current operations and future growth and to repay a portion of the indebtedness under the ABL Facility as required by the credit agreement governing that facility. On April 24, 2018, pursuant to the Series E-1 Investment Agreement with Elliott, the Company issued and sold to Elliott an additional 18,228 shares of Series E-1 Preferred Stock for an aggregate purchase price of $17.5 million. The proceeds of the sale of such shares of Series E-1 Preferred Stock were used to provide working capital to support the Company’s current operations and future growth and to repay a portion of the indebtedness under the ABL Facility as required by the credit agreement governing that facility. On August 3, 2018, in order to provide continued support to the Company's operating needs, the Company and Elliott entered into Amendment No. 1 to the Investment Agreement and Termination of Equity Commitment Letter (the “Series E-1 Amendment”), which, among other things, extended the Termination Date from July 30, 2018 to November 30, 2018 for the remaining 19,022 shares available to issue and sell to Elliott for $17.5 million. See Note 14 for additional information. Certain terms of the Series E-1 Preferred Stock are as follows: Rank. The Series E-1 Preferred Stock, with respect to payment of dividends, redemption payments, rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Company, or otherwise, ranks (i) senior and prior to the Company’s common stock and other junior securities, and (ii) on parity with the Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, and Series E Preferred Stock. Liquidation Value. Each share of Series E-1 Preferred Stock has an initial liquidation preference equal to $1,000 per share, plus accrued and unpaid dividends on such share (the “Series E-1 Liquidation Value”). Dividends. Dividends are cumulative from May 2, 2017, which was the date of the Company’s original issuance of shares of preferred stock to Elliott (such date, the “Original Issuance Date”), as a percentage of the Series E-1 Liquidation Value as and when declared by the Company’s Board of Directors and accrue and compound if not paid in cash. Dividends accrue daily and compound quarterly, subject to any adjustments for Triggering Events (as defined in the Series E-1 Certificate of Designations). The annual dividend rate for the shares of Series E-1 Preferred Stock is equal to the sum of (i) Adjusted LIBOR (as defined in the Series E-1 Certificate of Designations), plus (ii) 5.25% per annum, plus (iii) an additional rate of 8.5%. The dividend rate increases by 3.0% per annum above the rates described in the preceding sentence upon and during any Triggering Events. Holders of shares of Series E-1 Preferred Stock are not entitled to participate in dividends or distributions of any nature paid on or in respect of the Common Stock. Redemption at Maturity. On the sixth anniversary of the Original Issuance Date, the Company will have the obligation to redeem all outstanding shares of Series E-1 Preferred Stock for cash at the Series E-1 Liquidation Value. Optional Redemption. The Company may redeem the shares of Series E-1 Preferred Stock at any time. The redemption of shares of Series E-1 Preferred Stock shall be at a purchase price per share, payable in cash, equal to (i) in the case of a an optional redemption effected on or after the 24 month anniversary of the Original Issuance Date, the Series E-1 Liquidation Value, (ii) in the case of an optional redemption effected on or after the 12 month anniversary of the Original Issuance Date and prior to the 24 month anniversary of the Original Issuance Date, 103.5% of the Series E-1 Liquidation Value and (iii) in the case of an optional redemption effected prior to the 12 month anniversary of the Original Issuance Closing Date, 106.5% of the Series E-1 Liquidation Value. Change of Control. Upon the occurrence of a Change of Control (as defined in the Series E-1 Certificate of Designations), the holders of Series E-1 Preferred Stock may require redemption by the Company of the Series E-1 Preferred Stock at a purchase price per share, payable in cash, equal to either (i) 106.5% of the Series E-1 Liquidation Value if the Change of Control occurs prior to the 24 month anniversary of the Original Issuance Date, or (ii) the Series E-1 Liquidation Value if the Change of Control occurs after the 24 month anniversary of the Original Issuance Date. Voting. The holders of Series E-1 Preferred Stock will generally not be entitled to vote on any matters submitted to a vote of the stockholders of the Company. So long as any shares of Series E-1 Preferred Stock are outstanding, the Company may not take certain actions without the prior approval of the Preferred Requisite Vote, voting as a separate class. Certain Terms of the Preferred Stock
The Company incurred $1.1 million of issuance costs associated with the issuance of the Series E-1 Preferred Stock for the six months ended June 30, 2018, which are reflected in interest expense - preferred stock. The change in the fair value of the preferred stock, as indicated in Note 5, is reflected in interest expense - preferred stock. |
Fair Value Measurement |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement | Fair Value Measurement Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 2 — Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 — Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets. The classification of a financial asset or liability within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The Company has elected to measure its preferred stock using the fair value method. The fair value of the preferred stock is the estimated amount that would be paid to redeem the liability in an orderly transaction between market participants at the measurement date. The Company calculates the fair value of:
These valuations are considered to be Level 3 fair value measurements as the significant inputs are unobservable and require significant management judgment or estimation. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the Company’s estimates are not necessarily indicative of the amounts that the Company, or holders of the instruments, could realize in a current market exchange. Significant assumptions used in the fair value models include: the estimates of the redemption dates; credit spreads; dividend payments; and the market price of the Company’s common stock. The use of different assumptions and/or estimation methodologies could have a material effect on the estimated fair values. The table below sets forth a reconciliation of the Company’s beginning and ending Level 3 preferred stock liability balance for the three and six months ended June 30, 2018 and 2017.
(1)Change in fair value of preferred stock is reported in interest expense - preferred stock. |
Stockholders' Investment |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' investment | Stockholders’ Investment Changes in stockholders’ investment for the three and six months ended June 30, 2018 and 2017 consisted of the following (in thousands):
The retained earnings balance as of January 1, 2018 was adjusted by $0.9 million due to the modified retrospective application of the new revenue recognition principles. |
Earnings Per Share |
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Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic loss per common share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is calculated by dividing net loss by the weighted average common stock outstanding plus stock equivalents that would arise from the assumed exercise of stock options, the conversion of warrants, and the delivery of stock underlying restricted stock units using the treasury stock method. There is no difference, for any of the periods presented, in the amount of net loss used in the computation of basic and diluted loss per share. The Company had stock options and warrants outstanding of 1,535,771 as of June 30, 2018 and 1,903,467 as of June 30, 2017 that were not included in the computation of diluted loss per share because they were not assumed to be exercised under the treasury stock method or because they were anti-dilutive. All restricted stock units were anti-dilutive for the three and six months ended June 30, 2018 and 2017. Since the Company was in a net loss position for the three and six months ended June 30, 2018 and 2017, there is no difference between basic and dilutive weighted average common stock outstanding. |
Income Taxes |
6 Months Ended |
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Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective income tax rate was 8.0% for the three months ended June 30, 2018 and 4.3% for the six months ended June 30, 2018. In comparison, the effective income tax rate was 17.1% for the three months ended June 30, 2017 and 17.5% for the six months ended June 30, 2017. The benefit from income taxes varies from the amount computed by applying the federal corporate income tax rate of 21.0% and 35.0% for 2018 and 2017, respectively, to the loss before income taxes primarily due to state income taxes (net of federal tax effect) and adjustments for permanent differences (primarily the non-deductible interest expense associated with the Company's preferred stock). In determining the benefit from income taxes, the Company applied an estimated annual effective tax rate to its ordinary operating results, and calculated the tax benefit or provision, if any, of other discrete items individually as they occurred. The estimated annual effective tax rate was based on expected ordinary operating results, statutory tax rates, and the Company's best estimate of non-deductible and non-taxable items of ordinary income and expense. |
Guarantees (Notes) |
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Jun. 30, 2018 | |
Guarantees [Abstract] | |
Guarantees | Guarantees The Company provides a guarantee for a portion of the value of certain independent contractors' (“IC”) leased tractors. The guarantees expire at various dates through 2022. The potential maximum exposure under these lease guarantees was approximately $9.4 million as of June 30, 2018. Upon an IC default, the Company has the option to purchase the tractor or return the tractor to the leasing company if the residual value is greater than the Company’s guarantee. Alternatively, the Company can contract another IC to assume the lease. The Company estimated the fair value of its liability under this on-going guarantee to be $1.3 million and $1.4 million as of June 30, 2018 and December 31, 2017, respectively, which was recorded in accrued expenses and other current liabilities. The Company began to offer a lease purchase program that did not include a guarantee, and offered newer equipment under factory warranty that was more cost effective. ICs began electing the newer lease purchase program over the legacy lease guarantee programs which led to an increase in unseated legacy tractors. In late 2016, management committed to a plan to divest these older assets and recorded a loss reserve. The loss reserve for the guarantee and reconditioning costs associated with the planned divestiture was $1.1 million and $1.8 million as of June 30, 2018 and December 31, 2017, respectively, which was recorded in accrued expenses and other current liabilities. The Company paid $0.8 million and $3.0 million under these lease guarantees during the second quarter of 2018 and 2017, respectively, and $1.5 million and $6.9 million during the first half of 2018 and 2017, respectively. |
Commitments and Contingencies |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and Contingencies In the ordinary course of business, the Company is a defendant in several legal proceedings arising out of the conduct of its business. These proceedings include claims for property damage or personal injury incurred in connection with the Company’s services. Although there can be no assurance as to the ultimate disposition of these proceedings, the Company does not believe, based upon the information available at this time, that these property damage or personal injury claims, in the aggregate, will have a material impact on its consolidated financial statements. The Company maintains an aggregate of $100 million of auto liability and general liability insurance. The Company maintains auto liability insurance coverage for claims in excess of $1.0 million per occurrence and cargo coverage for claims in excess of $100,000 per occurrence. The Company is self-insured up to $1.0 million for workers compensation. The Company believes it has adequate insurance to cover losses in excess of the self-insured and deductible amounts. As of June 30, 2018 and December 31, 2017, the Company had reserves for estimated uninsured losses of $29.6 million and $28.4 million, respectively, included in accrued expenses and other current liabilities. Jeffrey Cox and David Chidester filed a Complaint against certain of the Company’s subsidiaries in state court in California in a post-acquisition dispute (the “Central Cal Matter”). The Complaint alleges contract, statutory and tort based claims arising out of the Stock Purchase Agreement, dated November 2, 2012, between the defendants, as buyers, and the plaintiffs, as sellers, for the purchase of the shares of Central Cal Transportation, Inc. and Double C Transportation, Inc. (the “Central Cal Agreement”). The plaintiffs claim that a contingent purchase obligation payment is due and owing pursuant to the Central Cal Agreement, and that defendants have furnished fraudulent calculations to the plaintiffs to avoid payment. The plaintiffs also claim violations of California’s Labor Code related to the plaintiffs’ respective employment with Central Cal Transportation, LLC. On October 27, 2017, the state court granted the Company’s motion to compel arbitration of all non-employment claims alleged in the Complaint. The plaintiffs are in the process of submitting the dispute to a Settlement Accountant. In February 2018, Plaintiff David Chidester agreed to dismiss his employment-related claims from the Los Angeles Superior Court matter, while Plaintiff Jeffrey Cox transferred his employment claims from Los Angeles Superior Court to the related employment case pending in the Eastern District of California. The parties are proceeding with discovery and the consolidated case is currently set for trial on November 5, 2019. The Company received a letter dated April 17, 2018 from legal counsel representing Warren Communications News, Inc. (“Warren”) in which Warren made certain allegations against the Company of copyright infringement concerning an electronic newsletter published by Warren (the “Warren Matter”). Specifically, Warren alleged that an employee of the Company had, for several years, forwarded that electronic newsletter to third parties in violation of corresponding subscription agreements. After discussions with Warren, the Company received a second letter dated July 30, 2018 in which counsel for Warren offered to settle its claim for a monetary payment by the Company. The Company subsequently sent a counter-offer to Warren. In addition to the legal proceeding described above, the Company is a defendant in various purported class-action lawsuits alleging violations of various California labor laws and one purported class-action lawsuit alleging violations of the Illinois Wage Payment and Collection Act. Additionally, the California Division of Labor Standards and Enforcement has brought administrative actions against the Company alleging that the Company violated various California labor laws. In 2017 and 2018, the Company reached settlement agreements on a number of these labor related lawsuits and administrative actions. As of June 30, 2018 and December 31, 2017, the Company recorded a reserve for settlements, litigation, and defense costs related to these labor matters, the Central Cal Matter, and the Warren Matter of $13.9 million and $13.2 million, respectively, which are included in accrued expenses and other current liabilities. Following the Company's press release on January 30, 2017, three putative class actions were filed in the United States District Court for the Eastern District of Wisconsin against the Company and its former officers, Mark A. DiBlasi and Peter R. Armbruster. On May 19, 2017, the Court consolidated the actions under the caption In re Roadrunner Transportation Systems, Inc. Securities Litigation (Case No. 17-cv-00144), and appointed Public Employees’ Retirement System as lead plaintiff. On March 12, 2018, the lead plaintiff filed a Consolidated Amended Complaint (“CAC”) on behalf of a class of persons who purchased the Company’s common stock between March 14, 2013 and January 30, 2017, inclusive. The CAC alleges (i) the Company and Messrs. DiBlasi and Armbruster violated Section 10(b) of the Exchange Act and Rule 10b-5, and (ii) Messrs. DiBlasi and Armbruster, the Company’s former Chairman Scott Rued, HCI Equity Partners, L.L.C., and HCI Equity Management, L.P. violated Section 20(a) of the Exchange Act, by making or causing to be made materially false or misleading statements, or failing to disclose material facts, regarding (a) the accuracy of the Company’s financial statements; (b) the Company’s true earnings and expenses; (c) the effectiveness of the Company’s disclosure controls and controls over financial reporting; (d) the true nature and depth of financial risk associated with the Company’s tractor lease guaranty program; (e) the Company’s leverage ratios and compliance with its credit facilities; and (f) the value of the goodwill the Company carried on its balance sheet. The CAC seeks certification as a class action, compensatory damages, and attorney’s fees and costs. On July 23, 2018, the Company and the individual defendants filed motions to dismiss. The parties are currently engaged in mediation. On May 25, 2017, Richard Flanagan filed a complaint alleging derivative claims on the Company's behalf in the Circuit Court of Milwaukee County, State of Wisconsin (Case No. 17-cv-004401) against Scott Rued, Mark DiBlasi, Christopher Doerr, John Kennedy, III, Brian Murray, James Staley, Curtis Stoelting, William Urkiel, Judith Vijums, Michael Ward, Chad Utrup, Ivor Evans, Peter Armbruster, and Brian van Helden. Count I of the Complaint alleges the Director Defendants breached their fiduciary duties by “knowingly failing to ensure that the Company implemented and maintained adequate internal controls over its accounting and financial reporting functions,” and seeks unspecified damages. Count II of the Complaint alleges the Officer Defendants DiBlasi, Armbruster, and van Helden received substantial performance-based compensation and bonuses for fiscal year 2014 that should be disgorged. The action has been stayed by agreement pending a decision on an anticipated motion to dismiss the Amended Complaint filed in the securities class action described above. The parties are currently engaged in mediation. On June 28, 2017, Jesse Kent filed a complaint alleging derivative claims on the Company's behalf and class action claims in the United States District Court for the Eastern District of Wisconsin. On December 22, 2017, Chester County Employees Retirement Fund filed a Complaint alleging derivative claims on the Company's behalf in the United States District Court for the Eastern District of Wisconsin. On March 21, 2018, the Court entered an order consolidating the Kent and Chester County actions under the caption In re Roadrunner Transportation Systems, Inc. Stockholder Derivative Litigation (Case No. 17-cv-00893). On March 28, 2018, Plaintiffs filed their Verified Consolidated Shareholder Derivative Complaint alleging claims on behalf of the Company against Peter Armbruster, Mark DiBlasi, Scott Dobak, Christopher Doerr, Ivor Evans, Brian van Helden, John Kennedy III, Ralph Kittle, Brian Murray, Scott Rued, James Staley, Curtis Stoelting, William Urkiel, Chad Utrup, Judith Vijums, and Michael Ward. Count I alleges that several of the Defendants violated Section 14(a) of the Exchange Act and Rule 14a-9 based upon alleged misrepresentations and omissions in several of the Company’s proxy statements. Count II alleges that all the Defendants breached their fiduciary duty. Count III alleges that all the Defendants wasted corporate assets. Count IV alleges that certain of the Defendants were unjustly enriched. The Complaint seeks monetary damages, improvements to the Company’s corporate governance and internal procedures, an accounting from Defendants of the damages allegedly caused by them and the improper amounts the Defendants allegedly obtained, and punitive damages. The parties are currently engaged in mediation. In addition, subsequent to the Company's announcement that certain previously filed financial statements should not be relied upon, the Company was contacted by the SEC, FINRA, and the Department of Justice. The Department of Justice (“DOJ”) and Division of Enforcement of the SEC have commenced investigations into the events giving rise to the restatement. The Company has received formal requests for documents and other information. In addition, in June 2018 two of the Company's former employees were indicted on charges of conspiracy, securities fraud, and wire fraud as part of the ongoing DOJ and SEC investigation. The Company is cooperating fully with the joint DOJ and SEC investigation. Given the status of the matters above, the Company is unable to reasonably estimate the potential costs or range of costs at this time. |
Related Party Transactions |
6 Months Ended |
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Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company had an advisory agreement with HCI Equity Management L.P. (“HCI”) that required the Company to pay transaction fees and an annual advisory fee of $0.1 million. On May 2, 2017, the Company and HCI entered into a Termination Agreement in which HCI waived the Company’s payment of any and all unpaid fees and expenses accrued under the advisory agreement through May 2, 2017. The Company's operating companies have contracts with certain purchased transportation providers that are considered related parties. The Company paid an aggregate of $6.6 million and $3.1 million to these purchased transportation providers during the three months ended June 30, 2018 and 2017, respectively. The Company paid an aggregate of $13.2 million and $5.7 million to these purchased transportation providers during the six months ended June 30, 2018 and 2017, respectively. The Company has a number of facility leases with related parties and paid an aggregate of $0.3 million and $0.8 million under these leases during the three months ended June 30, 2018 and 2017, respectively. The Company paid an aggregate of $0.7 million and $1.5 million under these leases during the six months ended June 30, 2018 and 2017, respectively. The Company owns 37.5% of Central Minnesota Logistics, Inc. (“CML”), which operates as one of the Company's brokerage agents. The Company paid CML broker commissions of $0.7 million during each of the three months ended June 30, 2018 and 2017. The Company paid CML broker commissions of $1.4 million and $1.3 million during the six months ended June 30, 2018 and 2017, respectively. The Company has a jet fuel purchase agreement with a related party and paid an aggregate of $0.6 million and $0.3 million under this agreement during the three months ended June 30, 2018 and 2017, respectively. The Company paid an aggregate of $1.2 million and $0.8 million under this agreement during the six months ended June 30, 2018 and 2017, respectively. The Company leases certain equipment through leasing companies owned by related parties and paid an aggregate of $0.8 million and $0.3 million during the three months ended June 30, 2018 and 2017, respectively. The Company paid an aggregate of $1.5 million and $0.6 million for these leases during the six months ended June 30, 2018 and 2017, respectively. |
Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting The Company determines its segments based on the information utilized by the chief operating decision maker, the Company’s Chief Executive Officer, to allocate resources and assess performance. Based on this information, the Company has determined that it has three segments: TES, LTL, and Ascent. The Company changed its segment reporting in 2018 when it integrated its truckload brokerage business into the Ascent domestic freight management business. Segment information for prior periods has been revised to align with the new segment structure. These segments are strategic business units through which the Company offers different services. The Company evaluates the performance of the segments primarily based on their respective revenues and operating income. Accordingly, interest expense and other non-operating items are not reported in segment results. In addition, the Company has disclosed corporate, which is not a segment and includes corporate salaries, insurance and administrative costs, and long-term incentive compensation expense. The following table reflects certain financial data of the Company’s segments for the three and six months ended June 30, 2018 and 2017 and as of June 30, 2018 and December 31, 2017 (in thousands):
(1) Operations restructuring charges of $4.7 million are included within TES for the three and six months ended June 30, 2018. See Note 13 for additional information. (2) Includes non-cash capital leases. (3) Eliminations represents intercompany trade receivable balances between the three segments. |
Operating Restructuring Costs |
6 Months Ended |
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Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Operating Restructuring Costs | Restructuring Costs In the second quarter of 2018, the Company restructured its temperature controlled truckload business by completing the integration of multiple operating companies into one business unit. As part of this integration, the Company also right-sized its temperature controlled fleets, facilities, and support functions. As a result, in the second quarter of 2018, the Company recorded operations restructuring costs of $4.7 million, related to fleet and facilities right-sizing and relocation cots, severance costs, and the write-down of assets held-for-sale to fair market value. The write-down of assets held-for-sale to fair market value totaled $1.3 million and was recorded to property and equipment, while the remaining $3.4 million was recorded in accrued expenses and other liabilities. None of the remaining individual components are considered material to the overall cost. The Company also incurred corporate restructuring and restatement costs associated with legal, consulting and accounting matters, including internal and external investigations, SEC and accounting compliance, and restructuring of $3.9 million and $9.1 million in the second quarter of 2018 and 2017, respectively, and costs of $10.8 million and $16.8 million in the first half of 2018 and 2017, respectively. These costs are included in other operating expenses. |
Subsequent Events |
6 Months Ended |
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Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On August 3, 2018, in order to provide continued support to the Company's operating needs, the Company and Elliott entered into the Series E-1 Amendment, which, among other things, extended the Termination Date from July 30, 2018 to November 30, 2018 for the remaining 19,022 shares available to issue and sell to Elliott for $17.5 million. On August 3, 2018, the Company entered into a Fourth Amendment to the ABL Facility. Pursuant to the Fourth Amendment the ABL Facility was further amended to, among other things, reduce the amount of proceeds from the third tranche under the Series E-1 Investment Agreement to be applied to the bank term loan from 30% to 10%. |
Organization, Nature of Business and Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business Roadrunner Transportation Systems, Inc. (the “Company”) is headquartered in Downers Grove, Illinois with operations primarily in the United States and is organized in the following three segments: Truckload & Express Services (“TES”), Less-than-Truckload (“LTL”), and Ascent Global Logistics (“Ascent”). Within its TES segment, the Company serves customers throughout North America and provides the following services: air and ground expedite; over-the-road operations, including dry van, temperature controlled and flatbed; intermodal drayage and chassis management; and local, warehousing and other logistics. Within its LTL segment, the Company delivers LTL shipments throughout the United States and parts of Canada and operates service centers, complemented by relationships with numerous pick-up and delivery agents. Within its Ascent segment, the Company provides third-party domestic freight management, international freight forwarding, customs brokerage, and retail consolidation solutions. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated in consolidation. In the Company's opinion, except as noted below with respect to the change in accounting principle, the change in segments, and the restructuring charges described in Note 13, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the operations for the interim periods presented. Interim results are not necessarily indicative of results for a full year. |
Changes in Accounting Principles | Change in Accounting Principle On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), which was updated in August 2015 by ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-08 (“ASU 2016-08”), Revenue from Contracts with Customers - Principal versus Agent Considerations (Reporting Revenue Gross versus Net). Under ASU 2016-08, when another party is involved in providing goods or services to a customer, an entity is required to determine whether the nature of its promise is to provide the specified good or service (that is, the entity is a principal) or to arrange for that good or service to be provided by another party. When the principal entity satisfies a performance obligation, the entity recognizes revenue in the gross amount. When an entity that is an agent satisfies the performance obligation, that entity recognizes revenue in the amount of any fee or commission to which it expects to be entitled. The Company determined key factors from the five-step process to recognize revenue as prescribed by the new standard that may be applicable to each of the Company's operating businesses that roll up into its three segments. Significant customers and contracts from each business unit were identified and the Company reviewed these contracts. The Company completed the evaluation of the provisions of these contracts and compared the historical accounting policies and practices to the requirements of the new standard including the related qualitative disclosures regarding the potential impact of the effects of the accounting policies and a comparison to the Company's previous revenue recognition policies. The Company determined that certain transactions with customers required a change in the timing of when revenue and related expense is recognized. The guidance was applied only to contracts that were not completed at the date of initial adoption. The Company elected the modified retrospective method which required a cumulative adjustment to retained earnings instead of retrospectively adjusting prior periods. The Company recorded a $0.9 million benefit to opening retained earnings as of January 1, 2018 for the cumulative impact of adoption related to the recognition of in-transit revenue. Results for 2018 are presented under Topic 606, while prior periods were not adjusted. The adoption of Topic 606 did not have a material impact on the Company's condensed consolidated financial statements for the three and six months ended June 30, 2018. The disclosure requirements of Topic 606 are included within the Company's revised revenue recognition accounting policy below. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition, Policy | Revenue Recognition (effective January 1, 2018) The Company’s revenues are primarily derived from transportation services which includes providing freight and carrier services both domestically and internationally via land, air, and sea. The Company disaggregates revenue among its three segments, TES, LTL and Ascent, as presented in Note 12. Performance Obligations - A performance obligation is created once a customer agreement with an agreed upon transaction price exists. The terms and conditions of the Company’s agreements with customers are generally consistent within each segment. The transaction price is typically fixed and determinable and is not contingent upon the occurrence or non-occurrence of any other event. The transaction price is generally due 30 to 60 days from the date of invoice. The Company’s transportation service is a promise to move freight to a customer’s destination, with the transit period typically being less than one week. The Company views the transportation services it provides to its customers as a single performance obligation. These performance obligations are satisfied and recognized in revenue over the requisite transit period as the customer’s goods move from origin to destination. The Company determines the period to recognize revenue in transit based upon the departure date and the delivery date, which may be estimated if delivery has not occurred as of the reporting date. Determining the transit period and the percentage of completion as of the reporting date requires management to make judgments that affect the timing of revenue recognized. The Company has determined that revenue recognition over the transit period provides a reasonable estimate of the transfer of goods and services to its customers as the Company’s obligation is performed over the transit period. Principal vs. Agent Considerations - The Company utilizes independent contractors and third-party carriers in the performance of some transportation services. The Company evaluates whether its performance obligation is a promise to transfer services to the customer (as the principal) or to arrange for services to be provided by another party (as the agent) using a control model. This evaluation determined that the Company is in control of establishing the transaction price, managing all aspects of the shipments process and taking the risk of loss for delivery, collection, and returns. Based on the Company’s evaluation of the control model, it determined that all of the Company’s major businesses act as the principal rather than the agent within their revenue arrangements and such revenues are reported on a gross basis. Contract Balances and Costs - The Company applies the practical expedient in Topic 606 that permits the Company to not disclose the aggregate amount of transaction price allocated to performance obligations that are unsatisfied as of the end of the period as the Company's contracts have an expected length of one year or less. The Company also applies the practical expedient in Topic 606 that permits the recognition of incremental costs of obtaining contracts as an expense when incurred if the amortization period of such costs is one year or less. These costs are included purchased transportation costs. |
Segment Reporting | Segment Reporting The Company determines its segments based on the information utilized by the chief operating decision maker, the Company’s Chief Executive Officer, to allocate resources and assess performance. Based on this information, the Company has determined that it has three segments: TES, LTL, and Ascent. The Company changed its segment reporting effective January 1, 2018 when it integrated its truckload brokerage business into the Ascent domestic freight management business. Segment information for prior periods has been revised to align with the new segment structure. |
New Accounting Pronouncements | New Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which will be effective for the Company in 2019. For financing leases, a lessee is required to: (1) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments; (2) recognize interest on the lease liability separately from amortization of the right-of-use asset; and (3) classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows. For operating leases, a lessee is required to: (1) recognize the right-to-use asset and a lease liability, initially measured at the present value of the lease payments; (2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term generally on a straight-line basis; and (3) classify all cash payments within operating activities in the statement of cash flows. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying assets not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The Company is in the process of evaluating the guidance in ASU 2016-02 and will determine the total impact of the new guidance based on the current lease arrangements that are expected to remain in place. The Company expects adoption of this guidance will have a material impact on the Company's consolidated balance sheets given the Company will be required to record operating leases with lease terms greater than 12 months within assets and liabilities on the consolidated balance sheets. The Company has not yet determined how it will handle lease terms of 12 months or less. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740) Intra-Entity Transfers of Assets Other than Inventory (“ASU 2016-16”), which will be effective for the Company in 2018. GAAP currently prohibits the recognition of current and deferred income taxes for intra-entity asset transfers other than inventory (e.g. property and equipment) until the asset has been sold to an outside party. Under ASU 2016-16, the FASB decided that an entity should recognize the income tax consequences of an intra-entity transfer of an asset when the transfer occurs. ASU 2016-16 does not include any new disclosure requirements; however, existing disclosure around the rate reconciliations and types of temporary differences and/or carryforward that give rise to a significant portion of deferred income taxes may be applicable. The Company adopted ASU 2016-16 effective January 1, 2018 and it did not have a material impact on the Company’s condensed consolidated financial statements. |
Goodwill and Intangible Assets (Tables) |
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Rollforward of goodwill by reportable segment |
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Schedule of Accumulated Impairment Loss | The following is a breakdown of the Company's accumulated goodwill impairment losses as of June 30, 2018 by segment (in thousands):
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Intangible assets | Intangible assets as of June 30, 2018 and December 31, 2017 were as follows (in thousands):
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Estimated amortization expense | Estimated amortization expense for each of the next five years based on intangible assets as of June 30, 2018 is as follows (in thousands):
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Debt (Tables) |
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Preferred Stock (Tables) |
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Schedule of Stock by Class | Preferred stock as of as of June 30, 2018 and December 31, 2017 consisted of the following (in thousands):
Certain Terms of the Preferred Stock
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Fair Value Measurement (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of beginning and ending Level 3 financial liability balance | The table below sets forth a reconciliation of the Company’s beginning and ending Level 3 preferred stock liability balance for the three and six months ended June 30, 2018 and 2017.
(1)Change in fair value of preferred stock is reported in interest expense - preferred stock |
Stockholders' Investment (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in stockholders' investment | Changes in stockholders’ investment for the three and six months ended June 30, 2018 and 2017 consisted of the following (in thousands):
|
Segment Reporting (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial data of reportable segments | The following table reflects certain financial data of the Company’s segments for the three and six months ended June 30, 2018 and 2017 and as of June 30, 2018 and December 31, 2017 (in thousands):
(1) Operations restructuring charges of $4.7 million are included within TES for the three and six months ended June 30, 2018. See Note 13 for additional information. (2) Includes non-cash capital leases. (3) Eliminations represents intercompany trade receivable balances between the three segments. |
Organization Nature of Business and Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Operations [Line Items] | |||
Retained deficit | $ (357,415) | $ (292,703) | |
Difference between Revenue Guidance in Effect before and after Topic 606 | |||
Operations [Line Items] | |||
Retained deficit | $ 900 |
(Intangible Assets Acquired from Business Acquisitions) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of Intangible Assets | $ 1,800 | $ 2,000 | $ 3,600 | $ 4,100 | |
Intangible assets | |||||
Gross Carrying Amount | 84,658 | 84,658 | $ 84,658 | ||
Accumulated Amortization | (38,596) | (38,596) | (35,010) | ||
Net Carrying Value | 46,062 | 46,062 | 49,648 | ||
TES | |||||
Intangible assets | |||||
Gross Carrying Amount | 55,008 | 55,008 | 55,008 | ||
Accumulated Amortization | (20,735) | (20,735) | (18,470) | ||
Net Carrying Value | 34,273 | 34,273 | 36,538 | ||
LTL | |||||
Intangible assets | |||||
Gross Carrying Amount | 2,498 | 2,498 | 2,498 | ||
Accumulated Amortization | (1,839) | (1,839) | (1,748) | ||
Net Carrying Value | 659 | 659 | 750 | ||
Ascent | |||||
Intangible assets | |||||
Gross Carrying Amount | 27,152 | 27,152 | 27,152 | ||
Accumulated Amortization | (16,022) | (16,022) | (14,792) | ||
Net Carrying Value | 11,130 | 11,130 | $ 12,360 | ||
Adjustments | TES And Ascent | |||||
Intangible assets | |||||
Net Carrying Value | $ 300 | $ 300 |
(Amortization of Intangibles) (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Estimated amortization expense | ||
Remainder 2018 | $ 3,537 | |
2019 | 6,819 | |
2020 | 6,447 | |
2021 | 6,265 | |
2022 | 5,826 | |
Thereafter | 17,168 | |
Net Carrying Value | $ 46,062 | $ 49,648 |
Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Senior debt: | ||
Less: Debt issuance costs and discount | $ (3,123) | $ (3,485) |
Total debt, net of debt issuance costs and discount | 188,484 | 199,410 |
Less: Current maturities | (10,012) | (9,950) |
Long-term debt, net of current maturities | 178,472 | 189,460 |
Revolving credit facility | ||
Senior debt: | ||
Total debt | 147,037 | 147,037 |
Term loans | ||
Senior debt: | ||
Total debt | 44,570 | 55,858 |
ABL Facility | ||
Senior debt: | ||
Total debt | $ 191,607 | $ 202,895 |
Fair Value Measurement Fair Value Measurement (Reconciliation of Level 3 Liabilities) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||
Balance, end of period | $ 335,979 | $ 546,858 | $ 335,979 | $ 546,858 |
Level 3 | ||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Issuances | 17,499 | 537,930 | 34,999 | 537,930 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||
Balance, beginning of period | 286,874 | 0 | 263,317 | 0 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Other Comprehensive Income (Loss) | $ 31,606 | $ 8,928 | $ 37,663 | $ 8,928 |
Stockholders' Investment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jan. 01, 2018 |
Dec. 31, 2017 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning balance | $ 88,538 | $ 177,940 | $ 111,733 | $ 197,468 | ||
Net Income | (41,955) | (37,863) | (65,598) | (57,806) | ||
Share-based compensation | 372 | 658 | 895 | 1,268 | ||
Issuance of warrants | 0 | 2,571 | 0 | 2,571 | ||
Issuance of restricted stock units, net of taxes paid | (1) | (20) | (76) | (215) | ||
Ending balance | 46,954 | $ 143,286 | 46,954 | $ 143,286 | ||
Retained Earnings (Accumulated Deficit) | $ (357,415) | $ (357,415) | $ (292,703) | |||
Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Retained Earnings (Accumulated Deficit) | $ 900 |
Earnings Per Share (Details) - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Earnings Per Share [Abstract] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,535,771 | 1,903,467 |
Income Taxes (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 8.00% | 17.10% | 4.30% | 17.50% |
Federal corporate income tax rate | 21.00% | 35.00% |
Guarantees (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Guarantor Obligations [Line Items] | |||||
Guarantees Expiration Year | 2022 | ||||
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 9.4 | $ 9.4 | |||
Loss Contingency Accrual | 1.1 | 1.1 | $ 1.8 | ||
Loss Contingency Accrual, Payments | 0.8 | $ 3.0 | 1.5 | $ 6.9 | |
Property Lease Guarantee | |||||
Guarantor Obligations [Line Items] | |||||
Guarantor Obligations, Current Carrying Value | $ 1.3 | $ 1.3 | $ 1.4 |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Loss Contingencies [Line Items] | ||
Reserves for estimated uninsured losses | $ 1,100 | $ 1,800 |
Insurance Claims | ||
Loss Contingencies [Line Items] | ||
Liability and cargo insurance coverage for claims | 1,000 | |
Cargo Claims | ||
Loss Contingencies [Line Items] | ||
Liability and cargo insurance coverage for claims | 100 | |
Workers Compensation | ||
Loss Contingencies [Line Items] | ||
Self insurance | 1,000 | |
Uninsured Risk | ||
Loss Contingencies [Line Items] | ||
Reserves for estimated uninsured losses | 29,600 | 28,400 |
Legal Reserve | ||
Loss Contingencies [Line Items] | ||
Reserves for estimated uninsured losses | 13,900 | $ 13,200 |
General Liability | ||
Loss Contingencies [Line Items] | ||
Liability for Claims and Claims Adjustment Expense | $ 100,000 |
Related Party Transactions (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Sep. 12, 2011 |
|
Advisory Agreement | |||||
Related Party Transaction [Line Items] | |||||
Annual advisory fee | $ 0.1 | ||||
Dedicated Carriers | |||||
Related Party Transaction [Line Items] | |||||
Related party payment | $ 6.6 | $ 3.1 | $ 13.2 | $ 5.7 | |
Facilities Lease | |||||
Related Party Transaction [Line Items] | |||||
Related party payment | 0.3 | 0.8 | 0.7 | 1.5 | |
Fuel Purchase Agreement | |||||
Related Party Transaction [Line Items] | |||||
Related party payment | 0.6 | 0.3 | 1.2 | 0.8 | |
Equipment Leases | |||||
Related Party Transaction [Line Items] | |||||
Related party payment | $ 0.8 | $ 0.3 | $ 1.5 | 0.6 | |
Central Minnesota Logistics, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 37.50% | 37.50% | |||
Central Minnesota Logistics, Inc. [Member] | Broker Commissions | |||||
Related Party Transaction [Line Items] | |||||
Related party payment | $ 0.7 | $ 1.4 | $ 1.3 |
Operating Restructuring Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Write down of assets | $ 1,300 | |||
Operations restructuring costs | 4,655 | $ 0 | $ 4,655 | $ 0 |
Accrued Expenses and Other Current Liabilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 3,400 | |||
Other Operating Expense | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Operations restructuring costs | $ 3,900 | $ 9,100 | $ 10,800 | $ 16,800 |
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