Re: | Roadrunner Transportation Systems, Inc. Amendment No. 5 to Registration Statement on Form S-1 File No. 333-152504 Filed on April 23, 2010 |
cc: | Mark DiBlasi |
Merger | As Adjusted | Offering | As Adj. for | |||||||||||||||||
RRTS | Adjustments | for Merger | Adjustments | IPO/Merger | ||||||||||||||||
Net Tangible Book Value: |
||||||||||||||||||||
Total Assets |
$ | 290,835 | $ | 39,851 | $ | 330,686 | $ | (2,260 | ) | $ | 328,426 | |||||||||
Less: Goodwill |
210,834 | 33,837 | 244,671 | — | 244,671 | |||||||||||||||
Less: Other intangibles |
630 | 424 | 1,054 | — | 1,054 | |||||||||||||||
Less: Total Liabilities |
$ | 171,894 | $ | 21,098 | $ | 192,992 | $ | (110,680 | ) | $ | 82,312 | |||||||||
Net Tangible Book Value |
$ | (92,523 | ) | $ | (15,508 | ) | $ | (108,031 | ) | $ | 108,420 | $ | 389 | |||||||
Pro forma common stock outstanding |
17,192,595 | 3,091,515 | 20,284,110 | 9,000,000 | 29,284,110 | |||||||||||||||
Net tangible book value per share |
($5.38 | ) | $ | 0.06 | ($5.33 | ) | $ | 5.34 | $ | 0.01 | ||||||||||
Share Count | ||||
(12/31/09) | ||||
Redeemable common stock |
259,806 | |||
Series B convertible preferred stock |
2,082,766 | (a) | ||
Class A common stock |
14,567,521 | |||
Class B common stock |
282,502 | |||
Total |
17,192,595 | |||
(a) | Includes the conversion of accrued and unpaid dividends as of December 31, 2009. |
At Assumed | ||||||||
Offering Date | ||||||||
At 12/31/09 | of 5/10/10 | |||||||
Series B convertible preferred stock |
2,082,766 | (a) | 2,195,307 | (b) | ||||
Class A common stock |
14,567,521 | 14,567,521 | ||||||
Class B common stock |
282,502 | 282,502 | ||||||
Primary shares offered |
9,000,000 | 9,000,000 | ||||||
‘Newly issued common stock’ as adjusted for the offering |
25,932,789 | (c) | 26,045,330 | (c) | ||||
Plus: Exchange of GTS Shares |
3,091,515 | 3,230,324 | (d) | |||||
‘Newly issued common stock’ as adjusted for the offering and GTS merger |
29,024,304 | (c) | 29,275,654 | (c) | ||||
Plus: Redeemable common stock |
259,806 | |||||||
Common stock to be outstanding after this offering (e) |
29,535,460 | |||||||
(a) | Includes the conversion of accrued and unpaid dividends as of December 31, 2009. | |
(b) | 112,541 shares of our common stock will be issued upon the conversion of dividends that accrue on our Series B preferred stock from December 31, 2009 through an assumed offering date of May 10, 2010. | |
(c) | Excludes 259,806 shares of redeemable common stock. | |
(d) | Includes 138,809 shares that are attributable to an acquisition-related increase in outstanding GTS shares subsequent to December 31, 2009. | |
(e) | As reflected on page 6 of the prospectus under ‘The Offering’. |
Offering Adjustments | Merger and New Credit Facility Adjustments | |||||||||||||||||||||||||||||||||||||||||||
Unaccreted | Prepayment | Refinancing of | ||||||||||||||||||||||||||||||||||||||||||
Application of | Discount on | Penalty on | Existing Credit | As Adjusted | ||||||||||||||||||||||||||||||||||||||||
Primary | Junior | Junior | Facility with | for Offering | ||||||||||||||||||||||||||||||||||||||||
RRTS | Offering | Subordinated | Subordinated | As Adjusted | GTS | Use of RRTS | Transaction | Refinancing | New Credit | and GTS | ||||||||||||||||||||||||||||||||||
Actual | Proceeds | Notes | Notes | for Offering | Actual | Restricted Cash | Fees | Fees | Facility | Merger | ||||||||||||||||||||||||||||||||||
Credit facility |
$ | 70,160 | $ | (65,600 | ) | $ | 2,958 | $ | 9,862 | $ | 17,380 | $ | 10,875 | $ | (4,066 | ) | $ | — | $ | — | $ | (24,189 | ) | $ | — | |||||||||||||||||||
Senior subordinated
notes |
41,134 | (41,134 | ) | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Junior subordinated
notes |
16,766 | (16,766 | ) | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
New credit facility |
— | — | — | — | — | — | — | 3,500 | 1,000 | 24,189 | 28,689 | |||||||||||||||||||||||||||||||||
Total Debt |
$ | 128,060 | $ | (123,500 | ) | $ | 2,958 | $ | 9,862 | $ | 17,380 | $ | 10,875 | $ | (4,066 | ) | $ | 3,500 | $ | 1,000 | $ | — | $ | 28,689 |
Offering Adjustments | Merger and New Credit Facility Adjustments | |||||||||||||||||||||||||||||||
Application of | Value | As Adjusted | ||||||||||||||||||||||||||||||
Primary | Adjustment of | Exchange of | for Offering | |||||||||||||||||||||||||||||
RRTS | Offering | Redeemable | As Adjusted | GTS | GTS Shares for | Transaction | and GTS | |||||||||||||||||||||||||
Actual | Proceeds | Common Stock | for Offering | Actual | RRTS Shares | Fees | Merger | |||||||||||||||||||||||||
Additional paid-in
capital |
$ | 103,698 | $ | 137,341 | $ | (2,157 | ) | $ | 238,882 | $ | 22,135 | $ | (30 | ) | $ | (3,500 | ) | $ | 257,487 |
Offering Adjustments | Merger and New Credit Facility Adjustments | |||||||||||||||||||||||||||||||
Unaccreted | Prepayment | |||||||||||||||||||||||||||||||
Discount on | Penalty on | As Adjusted | ||||||||||||||||||||||||||||||
Write-off of | Junior | Junior | Write-off of | for Offering | ||||||||||||||||||||||||||||
RRTS | RRTS Debt | Subordinated | Subordinated | As Adjusted | GTS | GTS Debt | and GTS | |||||||||||||||||||||||||
Actual | Issue Costs | Notes | Notes | for Offering | Actual | Issue Costs | Merger | |||||||||||||||||||||||||
Retained earnings (deficit) |
$ | (597 | ) | $ | (2,260 | ) | $ | (2,958 | ) | $ | (9,862 | ) | $ | (15,677 | ) | $ | 306 | $ | (189 | ) | $ | (15,560 | ) |
(In thousands, except share and per share data) | Years Ended December 31, | |||||||||||
2007 | 2008 | 2009 | ||||||||||
Consolidated Statement of Operations Data
|
||||||||||||
Revenues
|
$ | 538,007 | $ | 537,378 | $ | 450,351 | ||||||
Operating income
|
17,934 | 7,280 | 13,202 | |||||||||
Net income (loss)
|
935 | (3,834 | ) | 167 | ||||||||
Net income (loss) available to common stockholders
|
935 | (3,834 | ) | (1,783 | ) | |||||||
Weighted average common stock outstanding:
|
||||||||||||
Basic
|
15,113,563 | 15,112,667 | 15,109,830 | |||||||||
Diluted
|
15,133,571 | 15,112,667 | 15,109,830 | |||||||||
Earnings (loss) per share available to common stockholders
|
||||||||||||
Basic
|
$ | 0.06 | $ | (0.25 | ) | $ | (0.12 | ) | ||||
Diluted
|
$ | 0.06 | $ | (0.25 | ) | $ | (0.12 | ) | ||||
Pro forma diluted earnings per
share(a)
|
$ | 0.01 | ||||||||||
Pro forma diluted earnings per share (as
adjusted)(b)
|
$ | 0.26 | ||||||||||
Other Data
|
||||||||||||
Working capital (end of period)
|
$ | 15,539 | $ | 13,467 | $ | 19,453 | ||||||
Capital expenditures
|
1,867 | 1,098 | 2,246 | |||||||||
Capital expenditures as a percentage of
revenues(c)
|
0.3 | % | 0.2 | % | 0.5 | % |
As of December 31, 2009 | ||||||||
(In thousands) |
Actual | As Adjusted(d) | ||||||
Consolidated Balance Sheet Data
|
||||||||
Cash
|
$ | 667 | $ | 667 | ||||
Total current assets
|
63,765 | 63,765 | ||||||
Property and equipment, net
|
5,292 | 5,292 | ||||||
Total assets
|
290,835 | 288,575 | (e) | |||||
Total current liabilities
|
44,312 | 36,912 | ||||||
Current maturities of long-term debt
|
7,400 | – | ||||||
Total debt (including current maturities)
|
128,060 | (f) | 17,380 | |||||
Series A preferred stock subject to mandatory redemption
|
5,000 | 5,000 | ||||||
Redeemable common stock
|
1,740 | 3,897 | (g) | |||||
Total stockholder’s investment
|
117,201 | 223,464 | (h) |
(a) | Pro forma diluted earnings per share is computed by dividing net income by the pro forma number of weighted average shares outstanding used in the calculation of diluted earnings per share, but after assuming conversion of our Series B preferred stock (including accrued but unpaid dividends) into shares of our common stock and the exercise of any dilutive stock options and warrants. | |
(b) | Pro forma diluted earnings per share (as adjusted) is computed by dividing net income, adjusted for the elimination of approximately $10.7 million in interest expense and the related tax benefit of approximately $4.1 million, assuming the retirement of approximately $123.5 million of our outstanding debt (including accrued interest and prepayment penalties), by the pro forma number of weighted average shares outstanding used in the calculation of diluted earnings per share, but after assuming conversion of our Series B preferred stock (including accrued but unpaid dividends) into shares of our common stock, the exercise of any dilutive stock options and warrants, and the issuance of shares in this offering (all of the proceeds of which issuance will be used to retire our outstanding indebtedness). | |
(c) | Our management uses capital expenditures as a percentage of revenues to evaluate our operating performance and measure the effectiveness of our non-asset based structure. We believe this financial measure is useful in evaluating the efficiency of our operating model compared to other companies in our industry. | |
(d) | The as adjusted column is unaudited and gives effect to: |
n | The conversion of all outstanding shares of our Series B preferred stock (including accrued but unpaid dividends) into shares of our common stock on a 149.314-for-one basis upon the completion of this offering; and |
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n | on an actual basis, taking into account the 149.314-for-one conversion (in the form of a stock split) of all of our outstanding shares of Class A common stock, Class B common stock, and Series B preferred stock (including accrued but unpaid dividends); | |
n | as adjusted to reflect the sale of 9,000,000 shares of common stock offered by us at an assumed public offering price of $15.00 per share, which is the midpoint of the range indicated on the cover of this prospectus, the deduction of underwriting discounts and estimated offering expenses, the application of the net proceeds we will receive from the offering in the manner described in “Use of Proceeds;” and the conversion of our Class A common stock, Class B common stock and Series B preferred stock into a single class of newly authorized common stock; and | |
n | as further adjusted to reflect the GTS merger that will occur simultaneous with the consummation of this offering. |
As of December 31, 2009 | ||||||||||||
As Adjusted for | ||||||||||||
(In thousands, except share data) |
Offering and |
|||||||||||
Actual | Offering | GTS Merger(a) | ||||||||||
Cash and cash equivalents
|
$ | 667 | $ | 667 | $ | 2,176 | (b) | |||||
Restricted cash
|
$ | 4,066 | (c) | $ | 4,066 | $ | – | |||||
Debt:
|
||||||||||||
Credit facility
|
$ | 70,160 | $ | 17,380 | $ | – | ||||||
Senior subordinated notes
|
41,134 | – | – | |||||||||
Junior subordinated notes
|
16,766 | (d) | – | – | ||||||||
New credit facility
|
– | 28,689 | (e) | |||||||||
Total debt
|
128,060 | 17,380 | 28,689 | (e) | ||||||||
Series A preferred stock subject to mandatory redemption,
$.01 par value; 5,000 shares authorized;
5,000 shares issued and outstanding, actual and as adjusted
|
5,000 | 5,000 | 5,000 | |||||||||
Redeemable common
stock(f):
|
||||||||||||
Class A common stock, $.01 par value;
259,806 shares issued and outstanding, actual; no shares
issued and outstanding, as adjusted
|
1,740 | – | – | |||||||||
Newly issued common stock, $.01 par value; no shares issued
and outstanding, actual; 259,806 shares issued and
outstanding, as adjusted
|
– | 3,897 | 3,897 | |||||||||
Stockholders’
investment(g):
|
||||||||||||
Series B convertible preferred stock, $.01 par value;
1,791,768 shares issued and outstanding, actual; no shares
issued and outstanding, as
adjusted(h)
|
13,950 | – | – | |||||||||
Class A common stock, $.01 par value;
14,567,521 shares issued and outstanding, actual; no shares
issued and outstanding, as adjusted
|
147 | – | – | |||||||||
Class B common stock, $.01 par value;
298,628 shares authorized; 282,502 shares issued and
outstanding, actual; no shares issued and outstanding, as
adjusted
|
3 | – | – | |||||||||
Newly issued common stock, $.01 par value;
100,000,000 shares authorized; no shares issued and
outstanding, actual; 25,932,789 shares issued and
outstanding, as adjusted for the offering;
29,024,304 shares issued and outstanding, as adjusted for
the offering and GTS merger
|
– | 259 | 290 | (i) | ||||||||
Additional paid-in capital
|
103,698 | 238,882 | (j) | 257,487 | (k) | |||||||
Retained deficit
|
(597 | ) | (15,677 | )(l) | (15,560 | )(m) | ||||||
Total stockholders’ investment
|
117,201 | 223,464 | 242,217 | |||||||||
Total capitalization
|
$ | 252,001 | $ | 249,741 | $ | 279,803 | ||||||
(a) | The GTS merger is conditioned upon the completion of this offering. | |
(b) | Reflects the addition of $1.5 million of cash and cash equivalents held by GTS as of December 31, 2009. | |
(c) | See Note 1 of the notes to our consolidated financial statements included elsewhere in this prospectus. We intend to use this restricted cash, which is reflected in other noncurrent assets in our consolidated balance sheet, together with borrowings under our anticipated new credit facility, to pay $3.5 million of transaction fees, to pay approximately $1.0 million of refinancing fees, and to retire the remaining balance of our outstanding debt and all of GTS’ outstanding debt. |
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