Pacer International Reports 2nd Quarter 2005 Results: Revenues Up 7.8 Percent and 9.0 Percent for the 2nd Quarter and Year-To-Da
August 02 2005 - 4:05PM
Business Wire
Pacer International, Inc. (Nasdaq:PACR), the non-asset based North
American third-party logistics and freight transportation provider,
today reported financial results for the three- and six-month
periods ended July 1, 2005. SECOND QUARTER RESULTS For the quarter
ended July 1, 2005, revenues increased to $454.6 million, or 7.8
percent, from $421.6 million in the 2004 quarter, reflecting growth
in both the wholesale and retail segments. However, primarily as a
result of the company's decision to write off $11.3 million of
previously capitalized computer software development costs, on an
as-reported basis, income from operations for the second quarter of
2005 decreased by $7.8 million compared to the same quarter of
2004, and net income decreased to $4.6 million from $9.5 million in
the 2004 quarter. Diluted earnings per share decreased to $0.12
from $0.25 a year earlier. The company had $32.0 million of cash
flow from operations in the second quarter, an improvement of $15.9
million from the same period in 2004, and paid down $15.0 million
of debt. The second quarter operating results also include $1.9
million of pre-tax charges related to legal cases settled and/or
agreed in principle, equivalent to approximately $0.03 per diluted
share. Net income, adjusted to exclude the $11.3 million of pre-tax
costs ($6.7 million after-tax) related to the software write-off,
increased to $11.3 million in the second quarter of 2005 from $9.5
million in the same quarter of 2004, a gain of 18.9 percent.
Adjusted diluted earnings per share increased to $0.30 from $0.25
in the second quarter of 2004, up 20.0 percent. Similarly, adjusted
income from operations for the second quarter of 2005 increased
19.9 percent to $21.1 million from $17.6 million a year earlier.
Note: A tabular reconciliation of the differences between the
adjusted financial results set forth above and elsewhere in this
press release and financial results determined in accordance with
accounting principles generally accepted in the United States of
America ("GAAP") is contained in the financial summary statements
attached to this press release. "We are pleased with the
fundamental progress in the company's on-going business,
notwithstanding the impact of the non-cash write-off of computer
software and the costs of the legal settlements," said Don Orris,
chairman and chief executive officer. "Income from operations for
our retail segment increased more than 36 percent for the second
quarter of 2005 compared to the like quarter of 2004, and adjusted
income from operations for our wholesale segment rose almost 23
percent," added Orris. YEAR-TO-DATE RESULTS For the six months
ended July 1, 2005, on an as-reported basis, net income decreased
to $15.9 million from $18.9 million in the same period last year.
Diluted earnings per share decreased to $0.42 from $0.49 a year
earlier. Income from operations decreased by $4.7 million, or 13.2
percent, compared to the 2004 period. Revenues increased to $914.7
million from $839.1 million in the 2004 period. The 2005 results
include the write-off of the software development costs and the
$1.9 million of pre-tax litigation-related charges. Adjusted net
income, excluding the $11.3 million of pre-tax costs ($6.8 million
after-tax) related to the software write-off, increased to $22.7
million from $18.9 million in the 2004 period, a gain of 20.1
percent. Adjusted diluted earnings per share increased to $0.60
from $0.49 in the 2004 period, up 22.4 percent. Adjusted income
from operations for the 2005 period increased 18.5 percent to $42.2
million from $35.6 million a year earlier. 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, August 2). To participate,
please call five minutes early by dialing (877) 209-0397 (in USA)
and ask for "Pacer Second Quarter Earnings Call." International
callers can dial (612) 332-0932. 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 August 2 at 10:15 p.m. Eastern Time to September
2 at 11:59 p.m. Eastern Time. For the replay, dial (800) 475-6701
(USA) or (320) 365-3844 (international), using access code 787248.
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 American 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. USE OF NON-GAAP FINANCIAL MEASURES: This press
release contains "non-GAAP financial measures" as defined by the
Securities and Exchange Commission, including adjusted diluted
earnings per share, adjusted net income and adjusted income from
operations for the wholesale segment on a consolidated basis. These
non-GAAP measures, which exclude the effect of the company's
write-off of computer software in the second quarter of 2005, are
used by Management and the Board of Directors in their analysis of
the company's ongoing core operating performance. Management
believes that these non-GAAP financial measures, by excluding the
impact of the non-cash write-off, provide useful supplemental
information that is essential to a proper understanding of the
operating results of the company's core businesses and allows
investors to more easily compare operating results from period to
period. A tabular reconciliation of the differences between the
non-GAAP financial information discussed in this release and the
most directly comparable financial information calculated and
presented in accordance with GAAP is contained in the financial
summary statements attached to this press release. 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,
capacity shortages or 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; changes in our business
strategy, development plans or cost savings plans; the loss of one
or more of our major customers; competition; availability of
qualified personnel; the frequency or severity of accidents,
particularly involving our trucking operations; changes in, or the
failure to comply with, government regulations; changes in interest
rates; difficulties in maintaining or enhancing our information
technology systems; our ability to integrate acquired businesses;
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 31, 2004, filed with the SEC on March 14, 2005.
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. -0- *T Pacer International, Inc. Consolidated
Balance Sheet ($ millions) July 1, 2005
----------------------------------------------------------------------
(Unaudited) Assets Current assets Cash and cash equivalents $ -
Accounts receivable, net 206.9 Prepaid expenses and other 10.8
Deferred income taxes 2.8 ---------------- Total current assets
220.5 Property and equipment Property, plant & equipment at
cost 92.0 Accumulated depreciation (55.6) ---------------- Property
and equipment, net 36.4 Other assets Intangible assets, net 288.3
Deferred income taxes 14.9 Other assets 16.5 ---------------- Total
other assets 319.7 ---------------- Total assets $ 576.6
================ Liabilities & Equity Current liabilities
Current maturities of long-term debt and capital leases $ - Book
overdraft 11.3 Accounts payable and accrued liabilities 157.2
---------------- Total current liabilities 168.5 Long-term
liabilities Long-term debt and capital leases 124.0 Other 2.2
---------------- Total long-term liabilities 126.2 Stockholders'
equity Common stock 0.4 Paid In capital 276.8 Other (0.1) Retained
earnings 4.9 Accumulated other comprehensive loss (0.1)
---------------- Total stockholders' equity 281.9 ----------------
Total liabilities and equity $ 576.6 ================ Pacer
International, Inc. Unaudited Consolidated Statement of Cash Flows
6 Months ($ in millions) 2005
----------------------------------------------------------------------
Cash Flows from Operating Activities Net income $ 15.9 Adjustments
to net income Depreciation and amortization 3.5 Deferred income
taxes (2.1) Loss on write-off of computer software 11.3 Change in
receivables 25.2 Change in other current assets (0.6) Change in
current liabilities (8.8) Other (5.8)
----------------------------------------------------------------------
Net cash provided by operating activities 38.6
----------------------------------------------------------------------
Cash Flows from Investing Activities Capital expenditures (2.1)
Proceeds from sales of property and equipment -
----------------------------------------------------------------------
Net cash used for investing activities (2.1)
----------------------------------------------------------------------
Cash Flows from Financing Activities Book overdraft (7.3) Proceeds
from issuance of common stock 1.0 Debt, revolver, net and capital
lease payments (30.0)
----------------------------------------------------------------------
Net cash used for financing activities (36.3)
----------------------------------------------------------------------
Effect of exchange rate changes on cash (0.2)
----------------------------------------------------------------------
Net change in cash and cash equivalents 0.0 Cash at beginning of
period -
----------------------------------------------------------------------
Cash at end of period $ -
======================================================================
Pacer International, Inc. Reconciliation of As Reported Financial
Results to As Adjusted Financial Results For the Three Months Ended
July 1, 2005 and June 25, 2004 In millions, except share and per
share amounts Unaudited 2nd Quarter 2005
----------------------------------------- As Reported As Adjusted
Item Results Adjustments Results ----------------------------
------------ ------------ ------------ Income from operations --
wholesale segment $ 12.3 $ 11.3 1/ $ 23.6 Income from operations --
retail segment 3.0 - 3.0 Income from operations -- corporate (5.5)
- (5.5) Interest expense 2.0 - 2.0 ------------ ------------
------------ Income before income taxes 7.8 11.3 19.1 Income taxes
3.2 4.6 2/ 7.8 ------------ ------------ ------------ Net income
4.6 6.7 11.3 ============ ============ ============ Diluted
earnings per share $ 0.12 $ 0.18 $ 0.30 ============ ============
============ Weighted average shares outstanding 37,993,025
37,993,025 37,993,025 ============ ============ ============ As
Adjusted 2nd Quarter 2004 Variance As Reported 2005 vs Item Results
2004 % ---------------------------- ------------------ ------------
--------- Income from operations -- wholesale segment $ 19.2 $ 4.4
22.9% Income from operations -- retail segment 2.2 0.8 36.4% Income
from operations -- corporate (3.8) (1.7) 44.7% Interest expense 2.2
(0.2) -9.1% ------------------ ------------ --------- Income before
income taxes 15.4 3.7 24.0% Income taxes 5.9 1.9 32.2%
------------------ ------------ --------- Net income 9.5 1.8 18.9%
================== ============ ========= Diluted earnings per
share $ 0.25 $ 0.05 20.0% ================== ============ =========
Weighted average shares outstanding 38,163,543 (170,518) -0.4%
================== ============ ========= 1/ Write-off of costs
related to the development of stacktrain computer software. 2/
Income tax effect of the write-off at the effective rate. Pacer
International, Inc. Reconciliation of As Reported Financial Results
to As Adjusted Financial Results For the Six Months Ended July 1,
2005 and June 25, 2004 In millions, except share and per share
amounts Unaudited Six Months 2005
---------------------------------------- As Reported As Adjusted
Item Results Adjustments Results ----------------------------
------------ ------------ ------------ Income from operations --
wholesale segment $ 35.1 $ 11.3 1/ $ 46.4 Income from operations --
retail segment 5.4 - 5.4 Income from operations -- corporate (9.6)
- (9.6) Interest expense 4.4 - 4.4 ------------ ------------
------------ Income before income taxes 26.5 11.3 37.8 Income taxes
10.6 4.5 2/ 15.1 ------------ ------------ ------------ Net income
15.9 6.8 22.7 ============ ============ ============ Diluted
earnings per share $ 0.42 $ 0.18 $ 0.60 ============ ============
============ Weighted average shares outstanding 37,990,773
37,990,773 37,990,773 ============ ============ ============ Six
Months 2004 As Adjusted ------------------ Variance As Reported
2005 vs Item Results 2004 % ----------------------------
------------------ ------------ --------- Income from operations --
wholesale segment $ 38.2 $ 8.2 21.5% Income from operations --
retail segment 4.2 1.2 28.6% Income from operations -- corporate
(6.8) (2.8) 41.2% Interest expense 4.9 (0.5) -10.2%
------------------ ------------ --------- Income before income
taxes 30.7 7.1 23.1% Income taxes 11.8 3.3 28.0% ------------------
------------ --------- Net income 18.9 3.8 20.1% ==================
============ ========= Diluted earnings per share $ 0.49 $ 0.11
22.4% ================== ============ ========= Weighted average
shares outstanding 38,198,495 (207,722) -0.5% ==================
============ ========= 1/ Write-off of costs related to the
development of stacktrain computer software. 2/ Income tax effect
of the write-off at the effective rate. Pacer International, Inc.
Unaudited Consolidated Statements of Operations ($ millions) 2nd
Quarter 2005 ----------------------------------------------
Wholesale Retail Corp./Elim. Consolidated
----------------------------------------------------------------------
GAAP Revenues $ 261.9 $ 234.8 $ (42.1) $ 454.6 Cost of purchased
transportation 192.6 202.7 (42.1) 353.2 Direct operating expenses
27.1 - 27.1 Selling, general & admin. expenses 17.8 28.2 5.5
51.5 Write-off of computer software 11.3 - - 11.3 Depreciation
expense 0.8 0.9 1.7
----------------------------------------------------------------------
Income from operations 12.3 3.0 (5.5) 9.8 Interest expense 2.0
----------------------------------------------------------------------
Income before income taxes 7.8 Income tax 3.2
----------------------------------------------------------------------
Net income $ 4.6
======================================================================
Diluted Earnings Per Share $ 0.12 Six Months 2005
---------------------------------------------- Wholesale Retail
Corp./Elim. Consolidated
----------------------------------------------------------------------
GAAP Revenues $ 525.1 $ 470.1 $ (80.5) $ 914.7 Cost of purchased
transportation 383.2 407.8 (80.5) 710.5 Direct operating expenses
57.9 - - 57.9 Selling, general & admin. expenses 35.8 55.2 9.6
100.6 Write-off of computer software 11.3 - 11.3 Depreciation
expense 1.8 1.7 - 3.5
----------------------------------------------------------------------
Income from operations 35.1 5.4 (9.6) 30.9 Interest expense 4.4
----------------------------------------------------------------------
Income before income taxes 26.5 Income tax 10.6
----------------------------------------------------------------------
Net income $ 15.9
======================================================================
Diluted Earnings Per Share $ 0.42 Pacer International, Inc.
Unaudited Consolidated Statements of Operations ($ millions, except
per share amounts) 2nd Quarter
------------------------------------------ 2005 2004 Variance %
------------------------------------- ---------- -----------
--------- GAAP Segments Revenues Wholesale 261.9 224.2 37.7 16.8%
Retail 234.8 223.4 11.4 5.1% Cons. Entries (42.1) (26.0) (16.1)
-61.9%
----------------------------------------------------------------------
Total 454.6 421.6 33.0 7.8% Income from Operations Wholesale 12.3
19.2 (6.9) -35.9% Retail 3.0 2.2 0.8 36.4% Corporate (5.5) (3.8)
(1.7) -44.7%
----------------------------------------------------------------------
Total 9.8 17.6 (7.8) -44.3% Net Income 4.6 9.5 (4.9) -51.6% Diluted
Earnings per Share $ 0.12 $ 0.25 $ (0.13) -52.0% Six Months
------------------------------------------ 2005 2004 Variance %
------------------------------------- ---------- -----------
--------- GAAP Segments Revenues Wholesale 525.1 462.4 62.7 13.6%
Retail 470.1 433.7 36.4 8.4% Cons. Entries (80.5) (57.0) (23.5)
41.2%
----------------------------------------------------------------------
Total 914.7 839.1 75.6 9.0% Income from Operations Wholesale 35.1
38.2 (3.1) -8.1% Retail 5.4 4.2 1.2 28.6% Corporate (9.6) (6.8)
(2.8) -41.2%
----------------------------------------------------------------------
Total 30.9 35.6 (4.7) -13.2% Net Income 15.9 18.9 (3.0) -15.9%
Diluted Earnings per Share $ 0.42 $ 0.49 $ (0.07) -14.3% *T
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