Roadrunner Transportation Restates Results Downward for 2016

Roadrunner Transportation Systems, Inc., a leading asset-right transportation and asset-light logistics service provider, announced that has completed its restatement of previously reported financial results.

As a result, the company filed its amended Annual Report on Form 10-K/A for the year ended December 31, 2015, and its amended Quarterly Reports on Form 10-Q/A for the quarterly periods ended March 31, 2016, June 30, 2016 and September 30, 2016. The company also concurrently filed its Annual Report on Form 10-K for the year ended December 31, 2016.

Restatement Summary

The restatement is the result of an internal investigation undertaken by the Audit Committee of Roadrunner’s Board of Directors (the “internal investigation”) into certain accounting discrepancies announced on January 30, 2017.

The internal investigation found that the company overstated its net income by approximately $66.5 million from 2011 through the third quarter of 2016.

The internal investigation initially focused on two operating entities and the 2014 through 2016 reporting periods. However, during the course of the internal investigation, the scope expanded to include the 2011 through 2016 reporting periods, other operating companies and corporate headquarters. The internal investigation identified accounting errors that substantially impacted all financial statement line items and disclosures, and identified material weaknesses in the company’s internal control over financial reporting.

“This financial restatement is a difficult, but important, step forward for Roadrunner. Our board and new leadership team take seriously the need to correct our historical financial information and ensure our go-forward reporting obligations are met with the highest standards of accuracy and transparency. We are working to implement the necessary corrective actions to improve our internal controls,” said Curtis W. Stoelting, Chief Executive Officer of Roadrunner.

Stoelting continued, “Despite the challenges of the past year, we continued to provide excellent customer service and not only maintained long-standing customer relationships, but expanded our key customer base. I personally would like to thank all of our business partners and team members, including our drivers, pilots and independent contractors for their ongoing trust and support.”

Roadrunner has begun the process to remediate what it calls “weaknesses in its internal controls.” Additionally, the company has taken the following steps to improve its corporate governance, leadership and finance teams, compliance programs and financial position.  It describes these steps as follows:

• “Appointed a new independent Chairman of the Board.
• Replaced the former management team by naming a new, experienced executive leadership team, including the Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and Chief Information Officer all of whom are contributing to a positive change in the tone from the top.
• Hired new financial leaders at corporate headquarters and certain operating companies.
• Began to strengthen internal compliance processes, including expanded internal controls, improved company-wide policies and procedures as well as detailed periodic reviews of subsidiary financial statements focusing on high-risk areas and key accounting judgments and estimates.Committed to building world-class finance, internal audit and information technology teams that will positively influence business operations and results.
• Stabilized the company’s capital structure by raising more than $540 million of new financing in the form of a preferred stock investment and an asset-based lending (“ABL”) facility.
• Reduced debt and created additional liquidity by selling Unitrans, a non-core business unit, for cash considerations of $95 million.”

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