Pacer International Reports 4th Quarter 2005 Net Income Up 20.0 Percent
February 08 2006 - 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-months and fiscal
year ended December 30, 2005. FOURTH QUARTER RESULTS For the
quarter ended December 30, 2005, net income increased by $3.4
million, or 20.0 percent, to $20.4 million compared to $17.0
million in the same quarter of 2004, reflecting growth in both the
wholesale and retail segments. Income from operations increased by
$5.8 million, or 19.1 percent, to $36.1 million compared to $30.3
million in the same quarter of 2004. Diluted earnings per share for
the quarter increased to $0.54 from $0.44 a year earlier, up 22.7
percent. The company had $25.2 million of cash flow from operations
in the fourth quarter, an improvement of $17.7 million from the
same period in 2004, and paid down $18.1 million of debt. In
addition, the company's first dividend to shareholders of $5.6
million was paid during the fourth quarter of 2005. Also during the
fourth quarter of 2005, the company declared a second dividend of
$5.6 million to shareholders which was paid in January 2006. "We
continue to see strong year-over-year financial results in our
company," said Don Orris, chairman and chief executive officer.
"Income from operations for our retail segment more than doubled
for the fourth quarter of 2005 compared to the like quarter of 2004
and is up 63.8 percent for the year. For the year, our wholesale
segment's revenues exceeded $1 billion and consolidated income from
operations, excluding the previously announced $11.3 million
software write-off, exceeded $100 million for the year. Our strong
cash flow enabled us to repay $64 million of our debt and to pay
our first dividend," added Orris. YEAR-TO-DATE RESULTS For the
fiscal year ended December 30, 2005, on an as-reported basis,
revenues increased to $1,860.1 million from $1,808.1 million in
2004. Net income increased to $50.9 million from $47.2 million last
year. Diluted earnings per share increased to $1.34 from $1.24 a
year earlier, and income from operations increased by $6.6 million,
or 7.6 percent, compared to 2004. The 2005 results include the
write-off of $11.3 million of software development costs and $3.3
million of pre-tax charges related to legal cases during the last
half of 2005. Cash provided by operating activities exceeded $100
million and $64.1 million was paid on long-term debt bringing the
debt balance to $90.0 million. Net income for 2005, adjusted to
exclude the $11.3 million of pre-tax costs ($6.8 million after-tax)
related to the software write-off, increased to $57.7 million from
$47.2 million in 2004, a gain of 22.2 percent. Adjusted diluted
earnings per share increased to $1.52 from $1.24 in 2004, up 22.6
percent. Adjusted income from operations for 2005 increased 20.7
percent to $104.4 million from $86.5 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 (Wednesday, February 8). To
participate, please call five minutes early by dialing (888)
428-4479 (in USA) and ask for "Pacer Fourth Quarter and Year 2005
Earnings Call." International callers can dial (612) 234-9960.
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 February 8 at
10:15 p.m. Eastern Time to March 8 at 11:59 p.m. Eastern Time. For
the replay, dial (800) 475-6701(USA) or (320) 365-3844
(international), using access code 814966. 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; our ability to
integrate acquired businesses; changes in, or the failure to comply
with, government regulations; changes 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 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) December 30, 2005
---------------------------------------------------------------------
(Unaudited) Assets Current assets Cash and cash equivalents $ 9.1
Accounts receivable,net 219.3 Prepaid expenses and other 10.8
Deferred income taxes 4.0 ------------------ Total current assets
243.2 Property and equipment Property, plant & equipment at
cost 94.8 Accumulated depreciation (58.7) ------------------
Property and equipment, net 36.1 Other assets Intangible assets,
net 288.3 Deferred income taxes 9.1 Other assets 13.5
------------------ Total other assets 310.9 ------------------
Total assets $ 590.2 ================== Liabilities & Equity
Current liabilities Current maturities of long-term debt and
capital leases $ - Book overdraft - Accounts payable and accrued
liabilities 188.2 ------------------ Total current liabilities
188.2 Long-term liabilities Long-term debt and capital leases 90.0
Other 5.3 ------------------ Total long-term liabilities 95.3
Stockholders' equity Common stock 0.4 Paid In capital 277.8
Retained earnings 28.7 Accumulated other comprehensive loss (0.2)
------------------ Total stockholders' equity 306.7
------------------ Total liabilities and equity $ 590.2
================== Pacer International, Inc. Unaudited Consolidated
Statement of Cash Flows
----------------------------------------------------------------------
($ in millions) 2005
----------------------------------------------------------------------
Cash Flows from Operating Activities Net income $ 50.9 Adjustments
to net income Depreciation and amortization 6.9 Deferred income
taxes 2.5 Loss on write-off of computer software 11.3 Change in
receivables 12.8 Change in other current assets (0.6) Change in
current liabilities 16.5 Other 0.6
----------------------------------------------------------------------
Net cash provided by operating activities 100.9
----------------------------------------------------------------------
Cash Flows from Investing Activities Capital expenditures (5.3)
Proceeds from sales of property and equipment 0.3
----------------------------------------------------------------------
Net cash used for investing activities (5.0)
----------------------------------------------------------------------
Cash Flows from Financing Activities Book overdraft (18.6) Proceeds
from issuance of common stock 1.8 Dividends paid to shareholders
(5.6) Debt, revolver, net and capital lease payments (64.1)
----------------------------------------------------------------------
Net cash used for financing activities (86.5)
----------------------------------------------------------------------
Effect of exchange rate changes on cash (0.3)
----------------------------------------------------------------------
Net change in cash and cash equivalents 9.1 Cash at beginning of
period -
----------------------------------------------------------------------
Cash at end of period $ 9.1
======================================================================
Pacer International, Inc. Reconciliation of As Reported Financial
Results to As Adjusted Financial Results For the Year Ended
December 30, 2005 and December 31, 2004 In millions, except share
and per share amounts Unaudited 2005
---------------------------------------- As Reported As Adjusted
Item Results Adjustments Results ----------------------------
------------ ------------- ------------ Income from operations $
93.1 $ 11.3 1/ $ 104.4 Interest expense 8.2 - 8.2 ------------
------------ ------------ Income before income taxes 84.9 11.3 96.2
Income taxes 34.0 4.5 2/ 38.5 ------------ ------------
------------ Net income $ 50.9 $ 6.8 $ 57.7 ============
============ ============ Diluted earnings per share $ 1.34 $ 0.18
$ 1.52 ============ ============ ============ Weighted average
shares outstanding 38,042,454 38,042,454 38,042,454 ============
============ ============ As 2004 Adjusted ----------- Variance As
Reported 2005 vs Item Results 2004 %
---------------------------------------- ------------ --------
------ Income from operations $ 86.5 $ 17.9 20.7% Interest expense
9.6 (1.4) -14.6% ------------ --------- ------ Income before income
taxes 76.9 19.3 25.1% Income taxes 29.7 8.8 29.6% ------------
--------- ------ Net income $ 47.2 $ 10.5 22.2% ============
========= ====== Diluted earnings per share $ 1.24 $ 0.28 22.6%
============ ========= ====== Weighted average shares outstanding
38,140,409 (97,955) -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) 4th Quarter 2005
---------------------------------------------- Wholesale Retail
Corp./Elim. Consolidated
----------------------------------------------------------------------
GAAP Revenues $ 330.1 $ 218.3 $ (44.6) $ 503.8 Cost of purchased
transportation 236.7 187.7 (44.6) 379.8 Direct operating expenses
31.0 - 31.0 Selling, general & admin. expenses 19.9 27.7 7.6
55.2 Write-off of computer software - - - - Depreciation expense
0.8 0.9 - 1.7
----------------------------------------------------------------------
Income from operations 41.7 2.0 (7.6) 36.1 Interest expense 1.9
----------------------------------------------------------------------
Income before income taxes 34.2 Income tax 13.8
----------------------------------------------------------------------
Net income $ 20.4
======================================================================
Diluted Earnings Per Share $ 0.54 Year
----------------------------------------------- Wholesale Retail
Corp./Elim. Consolidated
----------------------------------------------------------------------
GAAP Revenues $ 1,124.2 $ 901.6 $ (165.7) $ 1,860.1 Cost of
purchased transportation 816.1 778.2 (165.7) 1,428.6 Direct
operating expenses 115.4 - - 115.4 Selling, general & admin.
expenses 72.6 110.5 21.7 204.8 Write-off of computer software 11.3
- - 11.3 Depreciation expense 3.4 3.4 0.1 6.9
----------------------------------------------------------------------
Income from operations 105.4 9.5 (21.8) 93.1 Interest expense 8.2
----------------------------------------------------------------------
Income before income taxes 84.9 Income tax 34.0
----------------------------------------------------------------------
Net income $ 50.9
======================================================================
Diluted Earnings Per Share $ 1.34 Pacer International, Inc.
Unaudited Consolidated Statements of Operations ($ millions, except
per share amounts) 4th Quarter
-------------------------------------- 2005 2004 Variance %
---------------------------- ----------- --------- --------- ------
GAAP Segments Revenues Wholesale 330.1 303.4 26.7 8.8% Retail 218.3
261.0 (42.7) -16.4% Cons. Entries (44.6) (33.6) (11.0) 32.7%
---------------------------- ----------- --------- --------- ------
Total 503.8 530.8 (27.0) -5.1% Income from Operations Wholesale
41.7 37.3 4.4 11.8% Retail 2.0 0.6 1.4 233.3% Corporate (7.6) (7.6)
- 0.0% ---------------------------- ----------- --------- ---------
------ Total 36.1 30.3 5.8 19.1% Net Income 20.4 17.0 3.4 20.0%
Diluted Earnings per Share $ 0.54 $ 0.44 $ 0.10 22.7% Year
----------------------------------------- 2005 2004 Variance %
--------------------------- ----------- -------- --------- ------
GAAP Segments Revenues Wholesale 1,124.2 999.2 125.0 12.5% Retail
901.6 930.4 (28.8) -3.1% Cons. Entries (165.7) (121.5) (44.2) 36.4%
--------------------------- ----------- -------- --------- ------
Total 1,860.1 1,808.1 52.0 2.9% Income from Operations Wholesale
105.4 99.1 6.3 6.4% Retail 9.5 5.8 3.7 63.8% Corporate (21.8)
(18.4) (3.4) -18.5% --------------------------- -----------
-------- --------- ------ Total 93.1 86.5 6.6 7.6% Net Income 50.9
47.2 3.7 7.8% Diluted Earnings per Share $ 1.34 $ 1.24 $ 0.10 8.1%
*T
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