Pacer International Reports 3rd Quarter 2005 Results: Income from Operations Up 26.7 Percent; Net Income Up 29.2 Percent
November 01 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 nine-month
periods ended September 23, 2005. THIRD QUARTER RESULTS For the
quarter ended September 23, 2005, income from operations increased
by $5.5 million, or 26.7 percent, to $26.1 million compared to
$20.6 million in the same quarter of 2004, reflecting growth in
both the wholesale and retail segments. Net income increased by
$3.3 million, or 29.2 percent, to $14.6 million compared to $11.3
million in the same quarter of 2004. Diluted earnings per share for
the quarter increased to $0.38 from $0.30 a year earlier. The
company had $37.1 million of cash flow from operations in the third
quarter, an improvement of $27.9 million from the same period in
2004, and paid down $16.0 million of debt. "We see continued
progress in the company's on-going business," said Don Orris,
chairman and chief executive officer. "Income from operations for
our retail segment more than doubled for the third quarter of 2005
compared to the like quarter of 2004, notwithstanding a 9.5 percent
decrease in segment revenues due primarily to the previously
announced loss of a large but low-margin customer. Also, income
from operations for our wholesale segment rose more than 20 percent
on revenue growth of more than 15 percent," added Orris.
YEAR-TO-DATE RESULTS For the nine months ended September 23, 2005,
on an as-reported basis, revenues increased to $1,356.3 million
from $1,277.3 million in the same period of 2004. Net income
increased to $30.5 million from $30.2 million in the same period
last year. Diluted earnings per share increased to $0.80 from $0.79
a year earlier, and income from operations increased by $0.8
million, or 1.4 percent, compared to the 2004 period. The 2005
results include the previously announced write-off of $11.3 million
of software development costs and the $1.9 million of pre-tax
charges related to legal cases settled during the second quarter of
this year. Net income for the 2005 period, adjusted to exclude the
$11.3 million of pre-tax costs ($6.8 million after-tax) related to
the software write-off, increased to $37.3 million from $30.2
million in the 2004 period, a gain of 23.5 percent. Adjusted
diluted earnings per share increased to $0.98 from $0.79 in the
2004 period, up 24.1 percent. Adjusted income from operations for
the 2005 period increased 21.5 percent to $68.3 million from $56.2
million a year earlier. Note: A tabular reconciliation of the
differences between the adjusted financial results set forth above
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. 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, November 1). To participate, please call five
minutes early by dialing (877) 209-0397 (in USA) and ask for "Pacer
Third 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 November 1 at 10:15 p.m. Eastern Time to December
1 at 11:59 p.m. Eastern Time. For the replay, dial (800)
475-6701(USA) or (320) 365-3844 (international), using access code
798338. 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. 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) September 23, 2005
----------------------------------------------------------------------
(Unaudited) Assets Current assets Cash and cash equivalents $ 9.0
Accounts receivable,net 200.3 Prepaid expenses and other 6.7
Deferred income taxes 3.4 -------------------- Total current assets
219.4 Property and equipment Property, plant & equipment at
cost 92.9 Accumulated depreciation (57.0) --------------------
Property and equipment, net 35.9 Other assets Intangible assets,
net 288.3 Deferred income taxes 11.8 Other assets 15.5
-------------------- Total other assets 315.6 --------------------
Total assets $ 570.9 ==================== Liabilities & Equity
Current liabilities Current maturities of long-term debt and
capital leases $ - Book overdraft - Accounts payable and accrued
liabilities 169.3 -------------------- Total current liabilities
169.3 Long-term liabilities Long-term debt and capital leases 108.0
Other 2.4 -------------------- Total long-term liabilities 110.4
Stockholders' equity Common stock 0.4 Paid In capital 277.2 Other
(0.1) Retained earnings 13.9 Accumulated other comprehensive loss
(0.2) -------------------- Total stockholders' equity 291.2
-------------------- Total liabilities and equity $ 570.9
==================== Pacer International, Inc. Unaudited
Consolidated Statement of Cash Flows
----------------------------------------------------------------------
9 Months ($ in millions) 2005
----------------------------------------------------------------------
Cash Flows from Operating Activities Net income $ 30.5 Adjustments
to net income Depreciation and amortization 5.2 Deferred income
taxes 0.4 Write-off of computer software 11.3 Change in receivables
31.8 Change in other current assets 3.5 Change in current
liabilities (2.3) Other (4.7)
----------------------------------------------------------------------
Net cash provided by operating activities 75.7
----------------------------------------------------------------------
Cash Flows from Investing Activities Capital expenditures (3.3)
Proceeds from sales of property and equipment 0.1
----------------------------------------------------------------------
Net cash used for investing activities (3.2)
----------------------------------------------------------------------
Cash Flows from Financing Activities Book overdraft (18.6) Proceeds
from issuance of common stock 1.3 Debt, revolver, net and capital
lease payments (46.0)
----------------------------------------------------------------------
Net cash used for financing activities (63.3)
----------------------------------------------------------------------
Effect of exchange rate changes on cash (0.2)
----------------------------------------------------------------------
Net change in cash and cash equivalents 9.0 Cash at beginning of
period -
----------------------------------------------------------------------
Cash at end of period $ 9.0
======================================================================
Reconciliation of As Reported Financial Results to As Adjusted
Financial Results For the Nine Months Ended September 23, 2005 and
September 17, 2004 In millions, except share and per share amounts
Unaudited Nine Months 2005 ----------------------------------------
As Reported As Adjusted Item Results Adjustments Results
---------------------------- ------------ -------------
------------ Income from operations - wholesale segment $ 63.7 $
11.3 1/ $ 75.0 Income from operations - retail segment 7.5 - 7.5
Income from operations - corporate (14.2) - (14.2) Interest expense
6.3 - 6.3 ------------ ------------- ------------ Income before
income taxes 50.7 11.3 62.0 Income taxes 20.2 4.5 2/ 24.7
------------ ------------- ------------ Net income $ 30.5 $ 6.8 $
37.3 ============ ============= ============ Diluted earnings per
share $ 0.80 $ 0.18 $ 0.98 ============ ============= ============
Weighted average shares outstanding 38,021,710 38,021,710
38,021,710 ============ ============= ============
---------------------------- Nine Months As 2004 Adjusted
----------- Variance As Reported 2005 vs Item Results 2004 %
----------------------------------------- ----------- ---------
------ Income from operations - wholesale segment $ 61.8 $ 13.2
21.4% Income from operations - retail segment 5.2 2.3 44.2% Income
from operations - corporate (10.8) (3.4) 31.5% Interest expense 7.1
(0.8) -11.3% ----------- --------- ------ Income before income
taxes 49.1 12.9 26.3% Income taxes 18.9 5.8 30.7% -----------
--------- ------ Net income $ 30.2 $ 7.1 23.5% ===========
========= ====== Diluted earnings per share $ 0.79 $ 0.19 24.1%
=========== ========= ====== Weighted average shares outstanding
38,140,098 (118,388) -0.3% =========== ========= ======
----------------------------------------- 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) 3rd Quarter 2005
--------------------------------------------- Wholesale Retail
Corp./Elim. Consolidated
----------------------------------------------------------------------
GAAP Revenues $ 269.0 $ 213.2 $ (40.6) $ 441.6 Cost of purchased
transportation 196.2 182.7 (40.6) 338.3 Direct operating expenses
26.5 - 26.5 Selling, general & admin. expenses 16.9 27.6 4.5
49.0 Write-off of computer software - - - - Depreciation expense
0.8 0.8 0.1 1.7
----------------------------------------------------------------------
Income from operations 28.6 2.1 (4.6) 26.1 Interest expense 1.9
----------------------------------------------------------------------
Income before income taxes 24.2 Income tax 9.6
----------------------------------------------------------------------
Net income $ 14.6
======================================================================
Diluted Earnings Per Share $ 0.38 Nine Months 2005
--------------------------------------------- Wholesale Retail
Corp./Elim. Consolidated
----------------------------------------------------------------------
GAAP Revenues $ 794.1 $ 683.3 $ (121.1) $ 1,356.3 Cost of purchased
transportation 579.4 590.5 (121.1) 1,048.8 Direct operating
expenses 84.4 - - 84.4 Selling, general & admin. expenses 52.7
82.8 14.1 149.6 Write-off of computer software 11.3 - - 11.3
Depreciation expense 2.6 2.5 0.1 5.2
----------------------------------------------------------------------
Income from operations 63.7 7.5 (14.2) 57.0 Interest expense 6.3
----------------------------------------------------------------------
Income before income taxes 50.7 Income tax 20.2
----------------------------------------------------------------------
Net income $ 30.5
======================================================================
Diluted Earnings Per Share $ 0.80 Pacer International, Inc.
Unaudited Consolidated Statements of Operations ($ millions, except
per share amounts) 3rd Quarter ------------------------------ 2005
2004 Variance % -----------------------------------------------
------ --------- -- GAAP Segments Revenues Wholesale 269.0 233.4
35.6 15.3% Retail 213.2 235.7 (22.5) -9.5% Cons. Entries (40.6)
(30.9) (9.7) 31.4%
----------------------------------------------------------------------
Total 441.6 438.2 3.4 0.8% Income from Operations Wholesale 28.6
23.6 5.0 21.2% Retail 2.1 1.0 1.1 110.0% Corporate (4.6) (4.0)
(0.6)-15.0%
----------------------------------------------------------------------
Total 26.1 20.6 5.5 26.7% Net Income 14.6 11.3 3.3 29.2% Diluted
Earnings per Share $ 0.38 $ 0.30 $ 0.08 26.7% Nine Months
-------------------------------- 2005 2004 Variance %
------------------------------------------------------ --------
------ GAAP Segments Revenues Wholesale 794.1 695.8 98.3 14.1%
Retail 683.3 669.4 13.9 2.1% Cons. Entries (121.1) (87.9) (33.2)
37.8%
----------------------------------------------------------------------
Total 1,356.3 1,277.3 79.0 6.2% Income from Operations Wholesale
63.7 61.8 1.9 3.1% Retail 7.5 5.2 2.3 44.2% Corporate (14.2) (10.8)
(3.4) -31.5%
----------------------------------------------------------------------
Total 57.0 56.2 0.8 1.4% Net Income 30.5 30.2 0.3 1.0% Diluted
Earnings per Share $ 0.80 $ 0.79 $ 0.01 1.3% *T
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