Pacer International Reports 1st Quarter 2006 Net Income Up 21.9 Percent
For the quarter ended April 7, 2006, net income increased by $2.5 million, or 21.9 percent, to $13.9 million, compared to $11.4 million in the same quarter of 2005. Income from operations increased by $3.2 million, or 15.1 percent, to $24.4 million, compared to $21.2 million in the same quarter of 2005. Diluted earnings per share for the quarter increased to $0.36 from $0.30 a year earlier, up 20.0 percent. The company generated $10.9 million of cash flow from operations in the first quarter, an improvement of $4.3 million from the same period in 2005, and paid down $7.0 million of debt. During the first quarter, the company also paid its fourth-quarter 2005 dividend to shareholders of $5.6 million.
"Our performance for the first quarter of 2006 met our objectives and showed substantial improvement over last year's first quarter," said Don Orris, chairman and chief executive officer. "Our wholesale segment continues to be a strong growth engine for the company, with income from operations expanding by more than 25 percent compared to the first quarter of 2005. The softer performance of our retail segment during the 2006 quarter resulted, in part, from reduced rail incentives that we forego by driving increased volumes to our Stacktrain unit and from the settlement of a legal case. Our cash flow remains strong and enabled us to pay down our debt to a balance of $83.0 million from $90.0 million in addition to paying the $5.6 million dividend," added Orris.
CONFERENCE CALL TODAY -- Pacer International will hold a conference call for investors, analysts, business and trade media, and other interested parties at 5:00 p.m. Eastern Time today (Tuesday, May 2). To participate, please call five minutes early by dialing (877) 209-0397 (in USA) and ask for "Pacer First Quarter 2006 Earnings Call." International callers can dial (612) 332-1213.
Alternatively, an audio-only, simultaneous Web cast of the live conference call can be accessed through the Investor Relations link on the company's Web site at www.pacer-international.com. For persons unable to participate in either the conference call or the Web cast, a digitized replay will be available from May 2 at 10:15 p.m. Eastern Time to June 2 at 11:59 p.m. Eastern Time. For the replay, dial (800) 475-6701(USA) or (320) 365-3844 (international), using access code 825693. Alternatively, a replay can be accessed through the Investor Relations link on the company's Web site at www.pacer-international.com.
ABOUT PACER INTERNATIONAL -- Pacer International, a leading non-asset based North America third-party logistics and freight transportation provider, offers a broad array of logistics and other services through its subsidiaries and divisions to facilitate the movement of freight from origin to destination. Its wholesale services include Stacktrain (cost-efficient, two-tiered rail transportation for containerized shipments) and cartage (local trucking) services, and its retail services include intermodal marketing, truck brokerage, truck services, warehousing and distribution, international freight forwarding, and supply-chain management services. Pacer International is headquartered in Concord, California. Its business units Pacer Stacktrain and Pacer Global Logistics are headquartered in Concord, California, and in Dublin, Ohio, respectively. Web sites: www.pacer-international.com, www.pacerstack.com, and www.pacerglobal.com.
CERTAIN FORWARD-LOOKING STATEMENTS -- This press release contains or may contain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). These forward-looking statements are based on the company's current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions. Among the important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements are general economic and business conditions; congestion, work stoppages, equipment and capacity shortages, weather related issues and service disruptions affecting our rail and motor transportation providers; industry trends, including changes in the costs of services from rail and motor transportation providers; the loss of one or more of our major customers; the impact of competitive pressures in the marketplace; the frequency and severity of accidents, particularly involving our trucking operations; changes in our business strategy, development plans or cost savings plans; our ability to integrate acquired businesses; availability of qualified personnel; changes in, or the failure to comply with, government regulation; increases in interest rates; difficulties in maintaining or enhancing our information technology systems; terrorism and acts of war; and increases in our leverage. Additional information about these and other factors that could affect the company's business is set forth in the company's various filings with the Securities and Exchange Commission, including those set forth in the company's annual report on Form 10-K for the year ended December 30, 2005 filed with the SEC on March 2, 2006. Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described herein as anticipated, believed, expected or intended. Except as otherwise required by federal securities laws, the company does not undertake any obligation to update such forward-looking statements whether as a result of new information, future events or otherwise.
Note to editors: Issued by Steve Potash and Company, tel. 510/865-0800, or steve@potashco.com
Pacer International, Inc.
Consolidated Balance Sheet
($ millions)
April 7, 2006
----------------------------------------------------------
(Unaudited)
Assets
Current assets
Cash and cash equivalents $ 7.4
Accounts receivable,net 215.3
Prepaid expenses and other 12.1
Deferred income taxes 4.0
--------------
Total current assets 238.8
Property and equipment
Property, plant & equipment at cost 95.7
Accumulated depreciation (60.4)
--------------
Property and equipment, net 35.3
Other assets
Intangible assets, net 288.3
Deferred income taxes 7.3
Other assets 19.4
--------------
Total other assets 315.0
--------------
Total assets $ 589.1
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Liabilities & Equity
Current liabilities
Current maturities of long-term debt and
capital leases $ -
Accounts payable and accrued liabilities 184.2
--------------
Total current liabilities 184.2
Long-term liabilities
Long-term debt and capital leases 83.0
Other 5.3
--------------
Total long-term liabilities 88.3
Stockholders' equity
Common stock 0.4
Paid In capital 279.4
Retained earnings 37.0
Accumulated other comprehensive loss (0.2)
--------------
Total stockholders' equity 316.6
--------------
Total liabilities and equity $ 589.1
==============
Pacer International, Inc.
Unaudited Consolidated Statement of Cash Flows
----------------------------------------------------------
1st Quarter
($ in millions) 2006
----------------------------------------------------------
Cash Flows from Operating Activities
Net income $ 13.9
Adjustments to net income
Depreciation and amortization 1.8
Deferred income taxes 2.0
Stock based compensation expense 0.4
Excess tax benefit from exercise of
stock options (0.4)
Change in receivables 4.0
Change in other current assets (7.2)
Change in current liabilities (3.6)
Other -
----------------------------------------------------------
Net cash provided by operating activities 10.9
----------------------------------------------------------
Cash Flows from Investing Activities
Capital expenditures (1.0)
Proceeds from sales of property and
equipment -
----------------------------------------------------------
Net cash used for investing activities (1.0)
----------------------------------------------------------
Cash Flows from Financing Activities
Book overdraft -
Proceeds from issuance of common stock 0.6
Excess tax benefit from exercise of stock
options 0.4
Dividends paid to shareholders (5.6)
Debt, revolver, net and capital lease
payments (7.0)
----------------------------------------------------------
Net cash used for financing activities (11.6)
----------------------------------------------------------
Effect of exchange rate changes on cash -
----------------------------------------------------------
Net change in cash and cash equivalents (1.7)
Cash at beginning of period 9.1
----------------------------------------------------------
Cash at end of period $ 7.4
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Pacer International, Inc.
Unaudited Consolidated Statements of Operations
($ millions)
1st Quarter 2006
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Wholesale Retail Corp./Elim. Consolidated
----------------------------------------------------------------------
GAAP
Revenues $ 313.3 $ 202.9 $ (46.8) $ 469.4
Cost of purchased
transportation 234.1 174.8 (46.8) 362.1
Direct operating
expenses 32.3 - 32.3
Selling, general &
admin. expenses 17.3 27.2 4.3 48.8
Depreciation
expense 0.9 0.9 - 1.8
----------------------------------------------------------------------
Income from
operations 28.7 (0.0) (4.3) 24.4
Interest expense,
net 1.7
----------------------------------------------------------------------
Income before
income taxes 22.7
Income taxes 8.8
----------------------------------------------------------------------
Net income $ 13.9
======================================================================
Diluted Earnings
Per Share $ 0.36
Pacer International, Inc.
Unaudited Consolidated Statements of Operations
($ millions, except per share amounts)
1st Quarter
-----------------------------------------------
2006 2005 Variance %
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GAAP
Segments
Revenues
Wholesale 313.3 263.2 50.1 19.0%
Retail 202.9 235.3 (32.4) -13.8%
Cons. Entries (46.8) (38.4) (8.4) 21.9%
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Total 469.4 460.1 9.3 2.0%
Income from Operations
Wholesale 28.7 22.9 5.8 25.3%
Retail - 2.4 (2.4) -100.0%
Corporate (4.3) (4.1) (0.2) -4.9%
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Total 24.4 21.2 3.2 15.1%
Net Income 13.9 11.4 2.5 21.9%
Diluted Earnings per
Share $ 0.36 $ 0.30 $ 0.06 20.0%
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