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Reports organic growth in excess of soft demand and lower fuel surcharges
Roadrunner Transportation Systems, Inc. reported financial results for the three and twelve months ended December 31, 2015. Revenues for the year ended December 31, 2015 increased 6.5% to US$1,995.0 million. Consolidated revenue increased primarily due to organic growth in excess of soft demand and a decrease in fuel surcharge revenue. Operating income was US$96.7 million, compared to US$95.7 million for the prior year.
Revenues for the quarter ended December 31, 2015 decreased 7.8% to US$490.9 million from US$532.5 million for the same quarter in 2014. Operating income was US$24.3 million, compared to US$24.2 million for the prior year quarter.
Roadrunner's EBITDA of US$33.7 million for the quarter ended December 31, 2015 represented an increase of 3.8% from EBITDA of US$32.5 million for the quarter ended December 31, 2014. Roadrunner's EBITDA of US$129.0 million for the year ended December 31, 2015 represented an increase of 6.8% from EBITDA of US$120.8 million for the prior year.
Looking ahead, while the focus over the past several years has been on strategic growth and acquisition initiatives to position the Company for the long term, the focus in 2016 will be to continue to enhance cash flow from operations and to reduce the leverage ratio towards a long-term goal of less than 2.5 times EBITDA.
The Company expect to achieve EBITDA in the range of US$140.0 million to US$150.0 million for 2016, assuming that the weak freight environment will begin to recover during the second half of 2016, recent new business awards will build throughout the year and it does not consummate any new acquisitions.
Roadrunner has three operating segments, truckload logistics (TL), less-than-truckload (LTL), and Global Solutions.
TL revenues decreased 2.1% to US$305.0 million for Q4, 2015 primarily due to lower fuel surcharge revenues, which decreased US$22.9 million quarter-over-quarter. Despite soft demand in certain end markets and a significant decline in spot market pricing, TL operating income increased 12.5% to a high of US$22.1 million for Q4, 2015. TL segment operating ratio improved from 93.7 in Q4, 2014 to 92.7 in Q4, 2015.
LTL revenues decreased 16.0% to US$118.4 million for Q4, 2015 due to a combination of lower fuel surcharge revenue, which decreased US$9.6 million quarter-over-quarter, and weak freight demand in general industrial markets. LTL operating income was US$1.2 million, or 1.0% of LTL revenues, for Q4, 2015, compared to US$2.8 million, or 2.0% of LTL revenues, for Q4, 2014. The Company is implementing sales and productivity initiatives in the LTL segment to mitigate the weak economic environment, but these will take several quarters to achieve their full impact.
Global Solutions revenues decreased 11.1% to US$76.2 million for Q4, 2015 primarily due to lower volumes across all customers, including a major decline in volume for a significant customer. Global Solutions operating income was US$4.9 million, or 6.5% of Global Solutions revenues, for Q4, 2015, compared to US$5.7 million, or 6.6% of Global Solutions revenues, for Q4, 2014.