Pacer International Reports Third-quarter Results
Revenues for the Retail segment, which provides logistics and supply-chain management services directly to manufacturers and retailers, increased $105.8 million, reflecting recent acquisitions. Revenues of the Wholesale segment, which provides double-stack rail transport services, decreased $1.2 million.
Income from operations, before one-time charges discussed below, decreased $0.5 million from $18.8 million in the third quarter of 2000 to $18.3 million in the third quarter of 2001. The Wholesale segment's income from operations, before one-time charges, was $12.6 million, which accounted for a $0.4 million decrease from the prior period due to reduced automotive shipments. The Retail segment's income from operations, excluding one-time charges, was $5.7 million, a decrease of $0.1 million.
Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA), before one-time charges, increased $1.1 million from $21.5 million in the third quarter of 2000 to $22.6 million in the third quarter of 2001.
During the quarter ended September 21, 2001, the Company charged a total of $6.9 million to operating expense for one-time charges. The charges include $1.9 million for the write-off of agent balances due to the bankruptcy of an independent agent; $1.6 million for the write-off of IPO costs relating to the Company's planned IPO; $1.4 million for container and chassis return costs required as part of a program to downsize the container and chassis fleet; $1.2 million for additional merger and severance costs; $0.5 million for early container and chassis maintenance agreement termination costs; and $0.3 million for legal fees related to a lawsuit filed by the Company.
The Company's net income decreased by $5.0 million from $6.0 million in the third quarter of 2000 to $1.0 million in the third quarter of 2001 as a result of reduced operating income, the $6.9 million in one-time charges and a $0.8 million increase in interest expense due to borrowings for acquisitions.
On a year-to-date basis, Pacer International reported consolidated gross revenues for the nine-month period ended September 21, 2001 of $1,269.9 million, up $354.5 million or 38.7 percent from $915.4 million in the first nine months of 2000. Income from operations, before the one-time charge, decreased $12.5 million from $56.4 million in 2000 to $43.9 million in 2001. The Company's net income decreased by $14.3 million from $17.3 million in 2000 to $3.0 million in 2001 as a result of reduced operating income, including the $6.9 million one-time charge and a $5.0 million increase in interest expense due to borrowings for acquisitions.
Retail segment's gross revenues increased $393.1 million or 112.8 percent for the 2001 year-to-date period due to the acquisitions made in the second half of 2000, and year-to-date income from operations, before the one-time charge, increased $0.2 million to $16.4 million from $16.2 million last year. The Wholesale segment's gross revenues of $591.5 million for the nine-month period just ended were $2.1 million below revenues of $593.6 million for the same period of 2000. Income from operations for the Wholesale segment, before one-time charges, for the first nine-months of this year was $27.5 million, a decrease of $12.7 million from $40.2 million a year earlier, principally due to reduced automotive shipments and higher equipment costs.
Chairman and CEO Don Orris said: "Our third quarter results were in line with the third quarter of year 2000, which was a substantive improvement over our previous two quarters, indicating the progress we are making in the company. The economic downturn is still adversely affecting our results, especially the automotive business segments of our wholesale and retail divisions. We continue to position the company to deal with what is expected to be a very difficult economic environment."
About Pacer
Pacer International, a leading non-asset based international third-party logistics company, offers a broad array of logistics and other services to facilitate the movement of freight from origin to destination. Its services include wholesale stacktrain services (cost-efficient, two-tiered rail transportation for containerized shipments), and retail trucking, intermodal marketing, freight consolidation and handling, 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 site: www.pacer-international.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 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 the Company's leverage; regulatory changes affecting the Company's markets, operations, products and services; shifts in market demand and general economic conditions; as well as the other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. In addition, the Company has acquired businesses in the past and may consider acquiring businesses in the future that provide complementary services. There can be no assurance that the businesses that the company has acquired integrated. Should one or more of these risks or uncertainties materialize, or should underling assumptions or estimates prove incorrect, actual results may vary materially from those described herein as anticipated, believe, expected or intended.
Pacer International, Inc.
Consolidated Balance Sheet
($ millions)
September 21, 2001
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Assets
Current assets
Cash and cash equivalents $ -
Accounts receivable,net 236.5
Prepaid expenses and other 10.0
Deferred income taxes 7.3
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Total current assets 253.8
Property and equipment
Property, plant & equipment at cost 83.5
Accumulated depreciation (24.9)
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Property and equipment, net 58.6
Other assets
Intangible assets, net 284.6
Deferred income taxes 56.4
Other assets 9.9
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Total other assets 350.9
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Total assets $ 663.3
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Liabilities & Equity
Current liabilities
Current maturities of long-term debt and
capital leases $ 1.8
Accounts payable and accrued expenses 234.8
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Total current liabilities 236.6
Long-term liabilities
Long-term debt and capital leases 399.5
Deferred income taxes -
Other 3.2
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Total long-term liabilities 402.7
Minority interest - exchangeable preferred stock 25.7
Stockholders' equity
Common stock 0.1
Paid In capital 119.0
Treasury stock and other (0.7)
Retained earnings (deficit) (118.3)
Other accumulated comprehensive income (1.8)
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Total stockholders' equity (1.7)
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Total liabilities and equity $ 663.3
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Pacer International, Inc.
Unaudited Consolidated Statement of Operations
($ millions)
3rd Quarter 2001
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Wholesale Retail Consolidated
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Gross revenues $ 191.5 $ 230.3 $ 398.1
Cost of purchased
transportation 147.0 194.5 317.8
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Net revenues 44.5 35.8 80.3
Margin 23.2% 15.5% 20.2%
Direct operating expenses 20.7 - 20.7
Selling, general &
admin. expenses 9.9 27.1 37.0
Depreciation and amortization 1.3 3.0 4.3
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Operating income before
one-time charges 12.6 5.7 18.3
One-time charges 2.7 2.6 6.9
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Income from operations 9.9 3.1 11.4
Interest (income) expense 8.6
Other (income) expense -
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Income before income taxes
minority interest and
extraordinary loss 2.8
Income tax 1.8
Minority interest -
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Net income $ 1.0
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EBITDA - Before One-Time Charges $ 13.9 $ 8.7 $ 22.6
Nine Months 2001
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Wholesale Retail Consolidated
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Gross revenues $ 591.5 $ 741.5 $ 1,269.9
Cost of purchased
transportation 459.3 631.7 1,027.9
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Net revenues 132.2 109.8 242.0
Margin 22.3% 14.8% 19.1%
Direct operating expenses 69.7 - 69.7
Selling, general &
admin. expenses 30.9 84.2 115.1
Depreciation and amortization 4.1 9.2 13.3
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Operating income before
one-time charges 27.5 16.4 43.9
One-time charges 2.7 2.6 6.9
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Income from operations 24.8 13.8 37.0
Interest (income) expense 29.3
Other (income) expense -
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Income before income taxes
minority interest and
extraordinary loss 7.7
Income tax 3.9
Minority interest 0.8
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Net income $ 3.0
======================================================================
EBITDA - Before One-Time Charges $ 31.6 $ 25.6 $ 57.2
Pacer International, Inc.
Unaudited Consolidated Statements of Operations
3Q01 3Q00 Variance %
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Segments
Revenue
Wholesale 191.5 192.7 (1.2) -0.6%
Retail 230.3 124.5 105.8 85.0%
Cons. Entries (23.7) (10.0) (13.7) -137.0%
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Total 398.1 307.2 90.9 29.6%
Net Revenue
Wholesale 44.5 44.0 0.5 1.1%
Retail 35.8 22.3 13.5 60.5%
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Total 80.3 66.3 14.0 21.1%
Operating Income
Wholesale 12.6 13.0 (0.4) -3.1%
Retail 5.7 5.8 (0.1) -1.7%
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Operating Income Before
One-Time Charges 18.3 18.8 (0.5) -2.7%
One-Time Charges (6.9) - (6.9) n/m
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Total 11.4 18.8 (7.4) -39.4%
EBITDA
Wholesale 13.9 14.3 (0.4) -2.8%
Retail 8.7 7.2 1.5 20.8%
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EBITDA Before One-Time Charges 22.6 21.5 1.1 5.1%
One Time Charges (6.9) - (6.9) n/m
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Total 15.7 21.5 (5.8) -27.0%
9M01 9M00 Variance %
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Segments
Revenue
Wholesale 591.5 593.6 (2.1) -0.4%
Retail 741.5 348.4 393.1 112.8%
Cons. Entries (63.1) (26.6) (36.5) -137.2%
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Total 1,269.9 915.4 354.5 38.7%
Net Revenue
Wholesale 132.2 132.2 - 0.0%
Retail 109.8 65.5 44.3 67.6%
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Total 242.0 197.7 44.3 22.4%
Operating Income
Wholesale 27.5 40.2 (12.7) -31.6%
Retail 16.4 16.2 0.2 1.2%
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Operating Income Before
One-Time Charges 43.9 56.4 (12.5) -22.2%
One-Time Charges (6.9) - (6.9) n/m
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Total 37.0 56.4 (19.4) -34.4%
EBITDA
Wholesale 31.6 44.2 (12.6) -28.5%
Retail 25.6 20.4 5.2 25.5%
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EBITDA Before One-Time Charges 57.2 64.6 (7.4) -11.5%
One Time Charges (6.9) - (6.9) n/m
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Total 50.3 64.6 (14.3) -22.1%
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