Roadrunner Transportation Systems Inc., an asset-light truckload and less-than-truckload (LTL) carrier, said late today it will re-state nearly the last three years of financial results due to accounting errors involving "unrecorded expenses" of cash and driver receivables.
The Cudahy, Wis.-based company said the re-statements, which cover 2014, 2015, and the first three quarters of 2016, would impact operating results by between $20 million and $25 million. However, it said the current estimate is preliminary and could change materially as the company continued an investigation into the accounting. Roadrunner disclosed the news after the financial markets had closed.
Roadrunner said it was re-evaluating its internal controls over financial reporting and compliance, and warned it may find "deficiencies" in each. It said the financial statements and associated reports over the past three years that were prepared by its accountant, Deloitte & Touche LLP, should no longer be relied upon.
Investors generally take a strong dislike to multiple years of re-statements. Not surprisingly, they punished Roadrunner stock in after-hours trading, sending its price down 12.65 percent, to $10.08 a share.
Roadrunner generates most of its revenue from truckload carriage. It also provides third-party logistics (3PL), intermodal, warehousing and distribution, and transportation management services. In the third quarter of 2016, it generated total revenue of $532 million, about $35 million above prior-year levels, as gains in truckload revenue offset weakness in LTL and its "global solutions" divisions. Operating income rose to $18.9 million from $14.3 million. Through the first three quarters, revenue declined by $23 million, to $1.48 billion. Operating income was nearly cut in half, to $38.1 million. Some or all of these numbers may be subject to re-statement, however.
As an asset-light provider, Roadrunner controls its fleet utilization, but for the most part doesn't own the equipment or have company-employee drivers. Roadrunner went public in 2010, and until the last year or so had been one of the more acquisitive transport companies.