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Intermodal Q2 YTD 2011 Adjusted: Top - Excluding Loss Of International Customer In 2011, Intermodal Revenue Increased 10.7% YoY. Bottom - Excluding Loss Of International Customer In 2011, Intermodal Operating Income Increased 7.3% YoY. (Graphic: Business Wire)

CONFERENCE CALL TODAY Pacer International will hold a conference call for investors, analysts, business and trade media, and other interested parties at 8:30 a.m. ET, today (Thursday, July 26, 2012). To participate, please call five minutes early by dialing (800) 230-1059(in USA) and ask for "Pacer International Earnings Call." International callers can dial (612) 234-9959.

An audio-only, simultaneous Webcast of the live conference call can be accessed through the Investors link on the company’s website at www.pacer.com. For persons unable to participate in either the conference call or the Webcast, a digitized replay will be available from July 26, 2012 at 12:30 p.m. ET to August 26, 2012 at 11:59 p.m. ET. For the replay, dial (800) 475-6701(USA) or (320) 365-3844 (international), using access code 252020. During such period, the replay also can be accessed through the Events Calendar within the Investors link on the company's website at www.pacer.com

ABOUT PACER INTERNATIONAL ( www.pacer.com)

Pacer International, a leading asset-light North American freight transportation and logistics services provider, offers a broad array of services to facilitate the movement of freight from origin to destination through its intermodal and logistics operating segments. The intermodal segment offers container capacity, integrated local transportation services, and door-to-door intermodal shipment management. The logistics segment provides truck brokerage, warehousing and distribution, international freight forwarding, and supply-chain management services. For more information on Pacer International visit www.pacer.com.

USE OF NON-GAAP FINANCIAL MEASURES: This press release contains “non-GAAP financial measures” as defined by the Securities and Exchange Commission. These non-GAAP measures are adjusted intermodal revenue, adjusted intermodal gross margin and adjusted intermodal operating income, each of which excludes from 2011 results the impact of the previously announced volume reduction of the ocean carrier customer that transitioned its western business directly to the railroad. Non-GAAP measures 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 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, including earnings per share and revenue guidance for fiscal year 2012, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 including the current U.S. and global economic environment and the timing and strength of economic recovery in the U.S. and internationally; industry trends, including changes in the costs of services from rail, motor, ocean and air transportation providers; changes in contracts and rate agreements with rail service providers; and other risks discussed in the company’s Form 10-K and other filings with the Securities and Exchange Commission, which are incorporated herein by reference. 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.

Pacer International, Inc.

Unaudited Condensed Consolidated Balance Sheet

(in millions)

       
          June 30, 2012 December 31, 2011
 
Assets
 
Current assets
Cash and cash equivalents $ 9.0 $ 24.0
Accounts receivable, net 147.0 133.5
Prepaid expenses and other 19.3 12.3
Deferred income taxes   3.3     4.0  
Total current assets   178.6     173.8  
 
Property and equipment
Property and equipment, cost 105.8 99.8
Accumulated depreciation   (59.0 )   (56.1 )
Property and equipment, net  

46.8

    43.7  
 
Other assets
Deferred income taxes 14.4 14.1
Other assets   11.3     11.7  
Total other assets   25.7     25.8  
 
Total assets $ 251.1   $ 243.3  
 
Liabilities and Stockholders' Equity
 
Current liabilities
Accounts payable and other accrued liabilities 132.8 127.1
 
Long-term liabilities
Other 1.7 0.9
   
Total liabilities   134.5     128.0  
 
Stockholders' equity
Common stock 0.4 0.4
Additional paid-in-capital 305.4 304.7
Accumulated deficit (189.2 ) (190.2 )
Accumulated other comprehensive income   -     0.4  
Total stockholders' equity   116.6     115.3  
 
Total liabilities and stockholders' equity $ 251.1   $ 243.3  

Pacer International, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in millions, except share and per share data)

       
Three Months Ended Six Months Ended
June 30, 2012   June 30, 2011 June 30, 2012   June 30, 2011
 
 
Revenues $ 368.3 $ 386.3 $ 714.2 $ 744.7
 
Operating Expenses:
Cost of purchased transportation and services 307.1 315.5 592.9 607.8
Direct operating expenses (excluding depreciation) 22.6 24.5 44.9 48.5
Selling, general and administrative expenses 34.2 37.0 70.2 73.5
Depreciation and amortization   1.9       1.8     3.7       3.5  
Total operating expenses   365.8       378.8     711.7       733.3  
 
Income from operations 2.5 7.5 2.5 11.4
 
Interest expense   (0.3 )     (0.7 )   (0.8 )     (1.3 )
 
Income before income taxes 2.2 6.8 1.7 10.1
 
Income tax expense   (0.9 )     (2.6 )   (0.7 )     (3.9 )
 
Net income $ 1.3     $ 4.2   $ 1.0     $ 6.2  
 
 
Earnings per share:
 
Basic:
Earnings per share $ 0.04   $ 0.12   $ 0.03   $ 0.18  
Weighted average shares outstanding   35,090,580     34,987,453     35,052,353     34,968,654  
 
Diluted:
Earnings per share $ 0.04   $ 0.12   $ 0.03   $ 0.18  
Weighted average shares outstanding   35,354,393     34,999,279     35,314,237     34,982,579  

Pacer International, Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

(in millions)

     
Six Months Ended
June 30, 2012 June 30, 2011
 
Cash Flows from Operating Activities
Net income $ 1.0 $ 6.2
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization 3.7 3.5
Amortization of deferred gain on sale lease-back transactions (0.4 ) (0.3 )
Deferred taxes 0.4 3.5
Stock based compensation expense 0.9 1.0
Changes in operating assets and liabilities:
Accounts receivable, net (13.5 ) 0.4
Prepaid expenses and other (7.0 ) 2.6
Accounts payable and other accrued liabilities 4.9 (7.4 )
Other long-term assets 0.4 0.2
Other long-term liabilities   (0.7 )   (0.6 )
 
Net cash (used in) provided by operating activities   (10.3 )   9.1  
 
Cash Flows from Investing Activities
Capital expenditures (6.4 ) (3.4 )
Purchase of railcar assets (28.4 ) (17.7 )
Net proceeds from sale lease-back transaction 30.2 -
Net proceeds from sales of property and equipment   0.1     0.2  
 
Net cash used in investing activities   (4.5 )   (20.9 )
 
Cash Flows from Financing Activities
Net borrowings under revolving line of credit - 11.1
Repurchase and retirement of Pacer common stock (0.1 ) (0.1 )
Withholding tax paid upon vesting of restricted and performance stock units   (0.1 )   -  
 
Net cash (used in) provided by financing activities   (0.2 )   11.0  
 
Net decrease in cash and cash equivalents (15.0 ) (0.8 )
 
Cash and cash equivalents - beginning of period   24.0     4.2  
Cash and cash equivalents - end of period $ 9.0   $ 3.4  

Pacer International, Inc.

Unaudited Results by Segment

(in millions)

     
Three Months Ended June 30, Six Months Ended June 30,
    2012   2011   Change   % Change 2012   2011 Change   % Change
 
Revenues
Intermodal $ 306.8 $ 303.9 $ 2.9 1.0 % $ 591.7 $ 583.4 $ 8.3 1.4 %
Logistics 61.8 82.5 (20.7 ) (25.1 ) 122.9 161.5 (38.6 ) (23.9 )
Inter-segment eliminations     (0.3 )     (0.1 )     (0.2 )   N/M     (0.4 )   (0.2 )     (0.2 )   N/M  
Total 368.3 386.3 (18.0 ) (4.7 ) 714.2 744.7 (30.5 ) (4.1 )
 
Cost of purchased transportation and services
and direct operating expense 1/
Intermodal 279.1 270.6 8.5 3.1 537.2 521.4 15.8 3.0
Logistics 50.9 69.5 (18.6 ) (26.8 ) 101.0 135.1 (34.1 ) (25.2 )
Inter-segment eliminations     (0.3 )     (0.1 )     (0.2 )   N/M     (0.4 )   (0.2 )     (0.2 )   N/M  
Total 329.7 340.0 (10.3 ) (3.0 ) 637.8 656.3 (18.5 ) (2.8 )
 
Gross margin
Intermodal 27.7 33.3 (5.6 ) (16.8 ) 54.5 62.0 (7.5 ) (12.1 )
Logistics     10.9       13.0       (2.1 )   (16.2 )   21.9     26.4       (4.5 )   (17.0 )
Total $ 38.6 $ 46.3 $ (7.7 ) (16.6 )% $ 76.4 $ 88.4 $ (12.0 ) (13.6 )%
 
Gross margin percentage
Intermodal 9.0 % 11.0 % (2.0 ) % 9.2 % 10.6 % (1.4 ) %
Logistics     17.6       15.8       1.8     17.8     16.3       1.5  
Total 10.5 % 12.0 % (1.5 ) % 10.7 % 11.9 % (1.2 ) %
 
Income (loss) from operations
Intermodal 9.4 13.2 (3.8 ) (28.8 ) 17.6 21.6 (4.0 ) (18.5 )
Logistics (2.5 ) (0.2 ) (2.3 ) N/M (5.7 ) (0.4 ) (5.3 ) N/M
Corporate     (4.4 )     (5.5 )     1.1     (20.0 )   (9.4 )   (9.8 )     0.4     (4.1 )
Total $ 2.5 $ 7.5 $ (5.0 ) (66.7 )% $ 2.5 $ 11.4 $ (8.9 ) (78.1 )%
 
 
1/ Direct operating expenses are only incurred in the intermodal segment

Pacer International, Inc.

Reconciliation of GAAP Results to Adjusted Results

For the Three and Six Months Ended June 30, 2012 and June 30, 2011

(in millions)

           

Three Months EndedJune 30, 2012

Three Months Ended June 30, 2011 Adjusted Variance 2012 vs 2011 % Adjusted Variance 2012 vs 2011
    GAAP Results GAAP Results

Adjustments

Adjusted Results  
Revenues
Intermodal $ 306.8 $ 303.9 $ (22.9 ) /1 $ 281.0 $ 25.8 9.2 %
 
Cost of purchased transportation and services
and direct operating expense
Intermodal 279.1 270.6 (20.4 ) /1 $ 250.2 28.9 11.6
 
Gross margin
Intermodal 27.7 33.3 (2.5 ) 30.8 (3.1 ) (10.1 )
 
Gross margin percentage
Intermodal 9.0 % 11.0 % 11.0

%

 

11.0 % (2.0 )%
 
Income (loss) from operations
Intermodal $ 9.4 $ 13.2 $ (2.5 ) $ 10.7 $ (1.3 ) (12.1 )%
 
 
 
 

Six Months EndedJune 30, 2012

Six Months Ended June 30, 2011

Adjusted Variance 2012 vs 2011

% Adjusted Variance 2012 vs 2011
    GAAP Results GAAP Results

Adjustments

Adjusted Results  
Revenues
Intermodal $ 591.7 $ 583.4 $ (49.1 ) /1 $ 534.3 $ 57.4 10.7 %
 
Cost of purchased transportation and services

 

and direct operating expense
Intermodal 537.2 521.4 (43.9 ) /1 $ 477.5 59.7 12.5
 
Gross margin
Intermodal 54.5 62.0 (5.2 ) 56.8 (2.3 ) (4.0 )
 
Gross margin percentage
Intermodal 9.2 %

10.6

%

10.6

%

 

10.6 % (1.4 )%
 
Income (loss) from operations
Intermodal $ 17.6 $ 21.6 $ (5.2 ) $ 16.4 $ 1.2 7.3 %
 
 
1/ Adjustment to reflect previously announced reduction in volume from an ocean carrier customer that transitioned its western U.S. intermodal business directly to the railroad. Purchased transportation and direct operating expenses were adjusted at the average intermodal margin percentage for the 2011 period.

Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50353913&lang=en



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