Pacer International, Inc. Reports Second Quarter Results; Income From Operations Up 25.4 Percent for the Quarter
For the second quarter ending June 28, 2002, net revenues increased 4.5 percent to $84.4 million from $80.8 million in the same quarter of 2001. Income from operations increased 25.4 percent to $17.8 million from $14.2 million in 2001. Net income increased to $5.1 million from $2.4 million in the second quarter of last year. Diluted earnings per share increased 89 percent to $0.17 from $0.09 in 2001. Diluted earnings per share without the one-time write-off of bank fees associated with the initial public offering of June 13 would have been $0.19.
Net revenues for Pacer's Wholesale segment, which provides double-stack rail transportation services, increased by $7.9 million or 18.3 percent to $51.1 million. This strong year-over-year improvement resulted from increased domestic shipments due to increased business from Pacer's Retail segment and increased overall domestic volumes. Net revenues for the Retail segment, which provides logistics and supply-chain management services directly to manufacturers and retailers, decreased by $4.3 million, principally as a result of decreased automotive business in the truck brokerage unit, and reduced volumes in both freight consolidation and handling, and in international. Selling, general, and administrative expenses were reduced by 7.8 percent or $2.2 million in the Retail segment as a result of reduced payroll and other expenses due to the consolidation of operations.
Interest expense in 2002 decreased 3.2 percent to $9.1 million from $9.4 million in 2001. Interest expense included a one-time write-off of bank financing fees in the amount of $0.8 million ($0.02 diluted earnings per share) as a result of prepayment of debt with the proceeds of the initial public offering. Without the one-time charge, interest expense would have been reduced 11.7 percent to $8.3 million.
Don Orris, Chairman and CEO, said, "We are pleased with our year-over-year performance and our ability to exceed expectations in a challenging economic environment. Our results can be attributed to strong performance of the Wholesale segment, the benefits of the consolidation of the Retail segment, as well as some key customer wins. Projected cost savings in both the Retail and Wholesale segments have started to materialize."
For the six months ended June 28, 2002, net revenues increased 3.6 percent to $167.6 million from $161.7 million in the same period last year. Income from operations increased 30.9 percent to $33.5 million from $25.6 million in 2001. Net income increased to $8.8 million from $2.0 million in 2001. Diluted earnings per share increased to $0.30 from $0.08 in 2001.
ABOUT PACER -- Pacer International, a leading non-asset based North American third-party logistics and freight transportation provider, 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
CONFERENCE CALL -- Pacer International will hold a conference call for investors, analysts, business and trade media, and other interested parties at 12:00 Noon Eastern Time today (July 18). To participate, please call five minutes early by dialing (888) 423-3273 (in USA) and ask for "Pacer 2nd Quarter Earnings Call." International callers can dial (612) 332-0107. A digitized replay will be available from July 18 at 5:15 PM Eastern Time to July 26 at 2:59 AM Eastern Time. For the replay, dial (800) 475-6701 (USA) or (320) 365-3844 (international), access code #644811.
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; its dependence upon third parties for equipment and services essential to operate its business; regulatory changes affecting the Company's industry, operations, products and services; competitive or technological factors affecting the Company's markets, operations, products and services; shifts in market demand and general economic conditions. 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 in the past and may acquire in the future can be successfully integrated. Additional information about 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 registration statement relating to its initial public offering. 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.
Pacer International, Inc.
Consolidated Balance Sheet
($ millions)
June 28, 2002
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Assets
Current assets
Cash and cash equivalents $ -
Accounts receivable, net 205.5
Prepaid expenses and other 9.4
Deferred income taxes 2.0
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Total current assets 216.9
Property and equipment
Property, plant & equipment at cost 91.1
Accumulated depreciation (32.4)
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Property and equipment, net 58.7
Other assets
Intangible assets, net 281.5
Deferred income taxes 54.9
Other assets 8.8
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Total other assets 345.2
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Total assets $ 620.8
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Liabilities & Equity
Current liabilities
Current maturities of long-term debt and
capital leases $ 1.3
Accounts payable and accrued expenses 183.5
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Total current liabilities 184.8
Long-term liabilities
Long-term debt and capital leases 268.5
Other 3.3
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Total long-term liabilities 271.8
Minority interest - exchangeable preferred stock -
Stockholders' equity
Common stock 0.4
Paid In capital 269.9
Other (0.2)
Retained earnings (deficit) (105.5)
Other accumulated comprehensive income (0.4)
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Total stockholders' equity 164.2
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Total liabilities and equity $ 620.8
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Pacer International, Inc.
Unaudited Consolidated Statement of Operations
($ millions)
2nd Quarter 2002
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Wholesale Retail Consolidated
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Gross revenues $ 195.6 $ 229.4 $ 401.1
Cost of purchased transportation 144.5 196.1 316.7
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Net revenues 51.1 33.3 84.4
Margin 26.1% 14.5% 21.0%
Direct operating expenses 25.5 - 25.5
Selling, general & admin. expenses 12.6 26.1 38.7
Depreciation expense 1.1 1.3 2.4
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Income from operations 11.9 5.9 17.8
Interest (income) expense 5.3 3.8 9.1
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Income before income taxes 6.6 2.1 8.7
Income tax 2.7 0.9 3.6
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Net income $ 3.9 $ 1.2 $ 5.1
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EBITDA $ 13.0 $ 7.2 $ 20.2
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Six Months Ended June 28, 2002
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Wholesale Retail Consolidated
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Gross revenues $ 400.3 $ 434.3 $ 783.5
Cost of purchased transportation 296.5 370.5 615.9
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Net revenues 103.8 63.8 167.6
Margin 25.9% 14.7% 21.4%
Direct operating expenses 53.3 - 53.3
Selling, general & admin. expenses 24.8 51.0 75.8
Depreciation expense 2.4 2.6 5.0
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Income from operations 23.3 10.2 33.5
Interest (income) expense 11.5 7.4 18.9
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Income before income taxes 11.8 2.8 14.6
Income tax 4.6 1.2 5.8
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Net income $ 7.2 $ 1.6 $ 8.8
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EBITDA $ 25.7 $ 12.8 $ 38.5
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Pacer International, Inc.
Unaudited Consolidated Statements of Operations
2nd Quarter
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2002 2001 Variance %
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Segments
Revenue
Wholesale 195.6 194.4 1.2 0.6%
Retail 229.4 257.0 (27.6) -10.7%
Cons. Entries (23.9) (19.9) (4.0) -20.1%
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Total 401.1 431.5 (30.4) -7.0%
Net Revenue
Wholesale 51.1 43.2 7.9 18.3%
Retail 33.3 37.6 (4.3) -11.4%
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Total 84.4 80.8 3.6 4.5%
Operating Income
Wholesale 11.9 8.0 3.9 48.8%
Retail 5.9 6.2 (0.3) -4.8%
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Total 17.8 14.2 3.6 25.4%
EBITDA
Wholesale 13.0 9.3 3.7 39.8%
Retail 7.2 9.3 (2.1) -22.6%
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Total 20.2 18.6 1.6 8.6%
Six Months
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2002 2001 Variance %
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Segments
Revenue
Wholesale 400.3 400.0 0.3 0.1%
Retail 434.3 511.2 (76.9) -15.0%
Cons. Entries (51.1) (39.4) (11.7) -29.7%
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Total 783.5 871.8 (88.3) -10.1%
Net Revenue
Wholesale 103.8 87.7 16.1 18.4%
Retail 63.8 74.0 (10.2) -13.8%
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Total 167.6 161.7 5.9 3.6%
Operating Income
Wholesale 23.3 14.9 8.4 56.4%
Retail 10.2 10.7 (0.5) -4.7%
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Total 33.5 25.6 7.9 30.9%
EBITDA
Wholesale 25.7 17.7 8.0 45.2%
Retail 12.8 16.9 (4.1) -24.3%
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Total 38.5 34.6 3.9 11.3%
KEYWORDS -- earnings, financial results, conference call, logistics, transportation, rail, trucking, Concord, California, San Francisco Bay Area, Columbus, Dublin, Ohio.
Note: Issued by Steve Potash & Company, Alameda CA
510/865-0800 or steve@potashco.com
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