Pacer International Announces New Arrangements with Union Pacific and Reports Third-Quarter 2009 Results

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CONCORD, Calif.--(Business Wire)--
Pacer International, Inc. (Nasdaq: PACR), the asset-light North American freight
transportation and logistics services provider, today announced that it has
entered into new arrangements with Union Pacific Railroad (UP) that will further
accelerate Pacer`s transformation into a fully-integrated, door-to-door
intermodal service provider. In addition, Pacer reported today its financial
results for the three- and nine-month periods ending September 30, 2009.

NEW ARRANGEMENTS BETWEEN PACER AND UNION PACIFIC

* Multi-year arrangements provide continued access to the entire UP intermodal
rail network and establishes a new rate structure.
* Pacer increases focus on door-to-door integrated intermodal services with
seamless coordination and control of equipment, technology, and service
delivery.
* Pacer`s full portfolio of intermodal, trucking, and logistics services is
positioned to meet shipper requirements.

"We are delighted to announce that Pacer and UP have entered into new multi-year
arrangements that provide Pacer with continued access to the entire UP network,"
said Michael E. Uremovich, chairman and CEO of Pacer. "This is a significant
positive development for Pacer and our customers. The direct beneficiaries of
the arrangements are companies seeking door-to-door intermodal services who
demand a higher degree of service delivery integration and greater efficiency."

The new arrangements provide Pacer with continued access to the entire UP
intermodal network, featuring a multi-year line-haul services extension that
replaces the parties` current terms for domestic big-box shipments that were to
expire in 2011. In addition, it resolves outstanding claims between Pacer and UP
relating to domestic container transportation; facilitates a more efficient
equipment model through a fleet-sharing arrangement that provides customers
access to equipment of both companies; and allows Pacer to strategically focus
on its direct-to-customer intermodal service offering. The multi-faceted
arrangements form a firm foundation for intermodal service growth by both
organizations.

Pacer will utilize the $30 million cash payment received in connection with the
new arrangements to reduce outstanding debt under its revolving credit facility,
a reduction of nearly 50 percent, providing the Company with additional
availability under the facility.

The increased focus on high-value, door-to-door service is expected to result in
long-term benefits for Pacer, though a substantial reduction in revenues from
third-party, ramp-to-ramp services is anticipated due to the new arrangements`
terms and conditions.

"Pacer`s strategy recognizes that shippers favor direct control over each
element of the transportation process. This is an exciting and dynamic time
because intermodal has emerged as a key growth sector in the transportation
industry. We are positioned for growth as one of the largest intermodal services
providers with the most diverse container fleet in North America and focused on
what the customer demands-seamless coordination and control of equipment,
technology, and service delivery," said Uremovich.

"We continue to offer our premier array of transportation and logistics
services, through our cartage, highway, warehousing, and ocean carrier and
freight forwarding businesses; and we continue to dedicate ourselves to
delivering the very highest service with confidence every day," said Uremovich.

Pacer will discuss its new arrangements during its earnings call that is
scheduled for Wednesday, November 4th at 8 a.m. ET. Details for analysts who
would like to participate in the call are below.

THIRD-QUARTER FINANCIAL RESULTS

* Revenues decreased $139.1 million to $418.7 million compared to $557.8 million
for the quarter ended September 19, 2008.
* Income from operations declined $28.6 million to an income of $0.7 million
compared to an income of $29.3 million in the 2008 quarter.
* Net income declined from $20.8 million in the 2008 quarter to a net income of
$0.6 million in the 2009 quarter.
* During the quarter the Company completed an amendment to its credit agreement,
closed the sale of certain assets of its truck services unit and recorded a gain
of $1.4 million on the transaction in Selling, General and Administrative
Expenses. In addition, it continued its cost cutting efforts during the quarter
with a reduction of 253 people and recorded $2.0 million in severance expense.

********

* Intermodal segment income from operations decreased $30.0 million from the
2008 quarter to an income of $4.9 million compared to an income of $34.9 million
in the 2008 quarter. Volumes showed improvement from the second quarter of 2009,
especially automotive volumes, but are still below the 2008 quarter. Results
include $1.0 million for severance expense.
* Logistics segment income from operations declined $1.9 million to a loss of
$0.2 million compared to an income of $1.7 million in the 2008 quarter. Losses
at the truck services unit were the primary cause of the decrease.

* SG&A expenses declined by $8.9 million due in part to the Company`s continued
cost reduction programs.
* Sale of Truck Services-On August 17, 2009, the Company sold certain assets of
its truck services business to Universal Truckload Services, Inc. and UTS
Leasing, Inc.

"We are very pleased with our progress and return to profitability in the
third-quarter given that the transportation markets and overall economic
conditions remained extremely challenging," said Brian C. Kane, chief financial
officer of Pacer. "We successfully amended and extended our credit facility and
closed the sale of certain assets of Pacer Transport, our flatbed and heavy haul
truck services company, during the quarter. We also implemented a number of
additional organizational initiatives that we believe will further improve our
operational execution and the focus on our door-to-door integrated intermodal
product while reducing our costs. Though we remain in challenging economic
times, we are very encouraged by our financial and organizational progress
during the third-quarter, and by our new arrangements with UP which will allow
us to continue to deliver unparalleled value to our customers."

YEAR-TO-DATE FINANCIAL RESULTS

* Revenues for the nine months ended September 30, 2009 decreased $423.2 million
to $1,154.0 million compared to $1,577.2 million for the nine months ended
September 19, 2008.
* Income from operations, which includes a $200.4 million pre-tax, non-cash
goodwill impairment charge (of which $31.4 million related to our logistics
segment and $169.0 million related to our intermodal segment), was a loss of
$234.2 million compared to income of $75.3 million in the 2008 period. Excluding
the first quarter impairment charge, income from operations was a loss of $33.8
million. Included in income from operations in the 2009 period is $4.3 million
for severance expense.
* Net income declined from $47.6 million in the 2008 period to a net loss of
$184.1 million, or $5.30 per diluted share, in the 2009 period. Net income
includes the impact of the goodwill impairment charge ($161.2 million after-tax,
or $4.64 per share). Excluding the impairment charge, net income was a loss of
$22.9 million, or $0.66 per diluted share.

********

* Intermodal segment income from operations decreased $281.3 million from the
2008 period to a loss of $184.5 million (including a $169.0 million goodwill
impairment charge) compared to an operating income of $96.8 million in the 2008
period. Excluding the impairment charge, the intermodal segment recorded a $15.5
million operating loss.
* Logistics segment income from operations decreased $35.6 million to a loss of
$36.3 million (including a $31.4 million goodwill impairment charge) compared to
a loss of $0.7 million in the 2008 period. Excluding the impairment charge, the
logistics segment recorded a $4.9 million operating loss due primarily to our
truck services unit.
* SG&A expenses declined by $13.3 million due in part to the Company`s continued
cost reduction programs.

Note: A tabular reconciliation detailing the adjustments made to arrive at the
adjusted financial results set forth above and elsewhere in this press release
from financial results determined in accordance with accounting principles
generally accepted in the United States of America ("GAAP") is contained in the
financial summary statements attached to this press release.

Pacer International will hold a conference call for investors, analysts,
business and trade media, and other interested parties at 8:00 a.m. ET, tomorrow
(Wednesday, November 4). Pacer will discuss both its third-quarter financial
results and its new arrangements with UP. Details for parties who would like to
participate in the call are below.

CONFERENCE CALL INFORMATION-NOVEMBER 4, 2009, 8:00 a.m. ET

Conference call participation
Please call five minutes early
(800) 553-0326 (domestic) and(612) 332-0819 (international)
Ask for "Pacer International Third-Quarter Earnings Call"

Webcast access
Simultaneous audio-only of the live conference call
Select the Investors link on the Company's Web site at www.pacer.com

For persons unable to participate in either the conference call or the Webcast,
a digitized replay will be available from November 4 at 10:30 a.m. ET to
December 4 at 11:59 p.m. ET. For the replay, dial (800) 475-6701(domestic) or
(320) 365-3844 (international), using access code 120963. During such period,
the replay can also be accessed through the Investors link on the Company`s Web
site at www.pacer.com.

ABOUT PACER INTERNATIONAL (www.pacer.com)

Pacer International, a leading asset-light North American freight transportation
and logistics provider, through its intermodal and logistics operating segments,
offers a broad array of services to facilitate the movement of freight from
origin to destination. The intermodal segment offers wholesale intermodal
services to transportation intermediaries, and retail intermodal services
directly to beneficial cargo owners. The logistics segment provides other
logistics services to beneficial cargo owners through its truck brokerage,
warehousing and distribution, international freight forwarding and supply-chain
management services units. Pacer International is headquartered in Concord,
California. Its intermodal and logistics operating segments are headquartered in
Concord, California, and in Dublin, Ohio, respectively.

USE OF NON-GAAP FINANCIAL MEASURES: This press release contains "non-GAAP
financial measures" as defined by the Securities and Exchange Commission,
including adjusted diluted earnings per share, adjusted net income and adjusted
income from operations for the logistics and intermodal segments and on a
consolidated basis. These non-GAAP measures which exclude the effect of the
Company`s goodwill impairment write-off in the first quarter of 2009 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 (as such term is defined in the Private Securities
Litigation Reform Act of 1995). 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 length and severity of the current economic recession; industry
trends, including changes in the costs of services from rail and motor
transportation providers; our ability to borrow amounts under our credit
agreement due to borrowing base limitations and/or to comply with the financial
ratio and other covenants in our credit agreement; increases in interest rates;
the loss of one or more of our major customers; the success of our operational
consolidation and other cost reduction initiatives in improving our operating
results and cash flows without affecting customer service levels; the effect of
the current economic recession on our customers including reduced transportation
needs and an inability to pay us on time or at all; the impact of competitive
pressures in the marketplace; the frequency and severity of accidents,
particularly involving our trucking operations; changes in the terms of
contracts with our underlying rail carriers that are less favorable to us
relative to our current contracts as these expire; revenue losses and cost
impacts associated with the new UP arrangements; the failure to comply with,
government regulation; changes in our business strategy, development plans or
cost savings plans; congestion, work stoppages, equipment and capacity
shortages, weather related issues and service disruptions affecting our rail and
motor transportation providers; changes in fuel prices; our ability to
successfully defend or resolve customer and vendor rate and volume adjustment
claims against us; changes in international and domestic shipping patterns;
availability of qualified personnel; difficulties in maintaining or enhancing
our information technology systems including selecting, developing and
implementing applications and solutions to update our diverse legacy systems;
increases in our leverage; and terrorism and acts of war. Additional information
about these and other factors that could affect the Company's business is set
forth in the Company's various filings with the Securities and Exchange
Commission (the "SEC"), including those set forth in the Company's annual report
on Form 10-K for the year ended December 26, 2008 filed with the SEC on February
17, 2009 and the Form 10-Q for the quarter ended June 30, 2009 filed with the
SEC on August 6, 2009. 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.
Consolidated Balance Sheet
($ millions)

September 30, 2009
(Unaudited)
Assets

Current assets
Cash and cash equivalents $ 3.2
Accounts receivable, net 169.0
Prepaid expenses and other 27.9
Deferred income taxes 18.4
Total current assets 218.5

Property and equipment
Property, plant & equipment at cost 106.0
Accumulated depreciation (63.8 )
Property and equipment, net 42.2

Other assets
Goodwill, net -
Deferred income taxes 26.8
Other assets 17.1
Total other assets 43.9

Total assets $ 304.6

Liabilities & Equity

Current liabilities
Current maturities of long-term debt and capital leases $ 0.3
Book overdraft 6.1
Accounts payable and accrued liabilities 155.2
Total current liabilities 161.6

Long-term liabilities
Long-term debt and capital leases 54.5
Other 1.3
Total long-term liabilities 55.8

Stockholders' equity
Common stock 0.4
Paid In capital 301.3
Accumulated deficit (214.3 )
Accumulated other comprehensive loss (0.2 )
Total stockholders' equity 87.2

Total liabilities and equity $ 304.6

Pacer International, Inc.

Unaudited Consolidated Statement of Cash Flows

Nine Months
($ in millions) 2009

Cash Flows from Operating Activities
Net loss $ (184.1 )
Adjustments to net loss

Depreciation and amortization 5.2
Gain on sale of property, equipment and other assets (2.2 )
Deferred taxes (47.5 )
Goodwill impairment charge 200.4
Stock based compensation expense 1.9
Change in receivables 14.5
Change in other current assets (0.7 )
Change in current liabilities (8.2 )
Other (0.1 )

Net cash used for operating activities (20.8 )

Cash Flows from Investing Activities
Capital expenditures (7.2 )
Proceeds from software license amendment 22.5
Proceeds from sales of property, equipment and other assets 2.6

Net cash provided by investing activities 17.9

Cash Flows from Financing Activities
Net borrowings under line of credit agreement, net of debt issuance costs paid to lenders 8.0
Debt issuance costs paid to other third parties (1.4 )
Repurchase and retirement of common stock (0.1 )
Debt and capital lease obligation repayment (0.2 )
Dividends paid to shareholders (5.2 )

Net cash provided by financing activities 1.1

Effect of exchange rate changes on cash -

Net change in cash and cash equivalents (1.8 )

Cash at beginning of period 5.0
Cash at end of period $ 3.2

Pacer International, Inc.

Reconciliation of GAAP Financial Results to Adjusted Financial Results
For the Nine Months Ended September 30, 2009 and September 19, 2008
In millions, except share and per share amounts

Adjusted
Nine Months 2009 Nine Months Variance
GAAP Adjusted 2008 2009 vs
Item Results Adjustments Results Results 4/ 2008 %

Income (loss) from operations - intermodal 5/ $ (184.5 ) $ 169.0 1/ $ (15.5 ) $ 96.8 $ (112.3 ) -116.0 %
Income (loss) from operations - logistics (36.3 ) 31.4 2/ (4.9 ) (0.7 ) (4.2 ) 600.0 %
Income (loss) from operations - corporate (13.4 ) - (13.4 ) (20.8 ) 7.4 -35.6 %
Income (loss) from operations - total (234.2 ) 200.4 (33.8 ) 75.3 (109.1 ) -144.9 %
Interest expense 2.9 - 2.9 2.0 0.9 45.0 %
Income (loss) before income taxes (237.1 ) 200.4 (36.7 ) 73.3 (110.0 ) -150.1 %
Income tax (benefit) (53.0 ) 39.2 3/ (13.8 ) 25.7 (39.5 ) -153.7 %
Net income (loss) $ (184.1 ) $ 161.2 $ (22.9 ) $ 47.6 $ (70.5 ) -148.1 %

Diluted earnings (loss) per share $ (5.30 ) $ 4.64 $ (0.66 ) $ 1.36 $ (2.02 ) -148.7 %
Weighted average shares outstanding 34,760,659 34,760,659 34,760,659 34,917,677 (157,018 ) -0.4 %

1/ Intermodal segment goodwill impairment charge.
2/ Logistics segment goodwill impairment charge.
3/ Actual tax impact of the goodwill impairment charge excluding the permanent difference.

4/ 2008 amounts have been adjusted for the change in revenue recognition policy for the Stacktrain business unit to conform to the 2009 presentation.

5/ Beginning in the first quarter of 2009, the company`s Stacktrain business unit changed its revenue recognition method to a completed service basis from the percent of completed service basis used in prior periods. This change has been retrospectively applied to all prior period amounts. In addition, prior to 2009, the company`s fiscal year was the 52- or 53-week annual accounting period ending on the last Friday in December. Following the implementation of the SAP accounting modules during the 2009 first
quarter, the company`s fiscal year was changed to end on December 31 of each year. Amounts for the transition period between December 27, 2008 and December 31, 2008 are included in the 2009 first quarter.

Pacer International, Inc.
Unaudited Consolidated Statements of Operations
($ millions)

3rd Quarter 2009 Year-to-Date
Intermodal 1/ Logistics Corp./Elim. Consolidated Intermodal 1/ Logistics Corp./Elim. Consolidated
($ in millions) ($ in millions)

Revenues $ 314.9 $ 104.4 $ (0.6 ) $ 418.7 $ 864.8 $ 290.7 $ (1.5 ) $ 1,154.0

Cost of purchased transportation 252.4 90.1 (0.6 ) 341.9 703.3 247.5 (1.5 ) 949.3
Direct operating expenses 31.1 - 31.1 94.1 - - 94.1
Selling, general & admin. expenses 25.2 14.2 3.9 43.3 78.9 47.1 13.2 139.2
Goodwill impairment charge - - - - 169.0 31.4 - 200.4
Depreciation expense 1.3 0.3 0.1 1.7 4.0 1.0 0.2 5.2

Loss from operations 4.9 (0.2 ) (4.0 ) 0.7 (184.5 ) (36.3 ) (13.4 ) (234.2 )

Interest expense/income 1.7 2.9

Loss before income taxes (1.0 ) (237.1 )

Income tax benefit (1.6 ) (53.0 )

Net income (loss) $ 0.6 $ (184.1 )
Diluted Earnings (Loss) Per Share $ 0.02 $ (5.30 )

1/ Beginning in the first quarter of 2009, the company`s Stacktrain business unit changed its revenue recognition method to a completed service basis from the percent of completed service basis used in prior periods. This change has been retrospectively applied to all prior period amounts. In addition, prior to 2009, the company`s fiscal year was the 52- or 53-week annual accounting period ending on the last Friday in December. Following the implementation of the SAP accounting modules during the 2009 first
quarter, the company`s fiscal year was changed to end on December 31 of each year. Amounts for the transition period between December 27, 2008 and December 31, 2008 are included in the 2009 first quarter.

Pacer International, Inc.
Unaudited Consolidated Statements of Operations
($ millions, except per share amounts)

3rd Quarter Year-to-Date
2009 2008 1/ Variance % 2009 2008 1/ Variance %

Segments

Revenues
Intermodal $ 314.9 $ 431.9 $ (117.0 ) -27.1 % $ 864.8 $ 1,235.8 $ (371.0 ) -30.0 %
Logistics 104.4 126.7 (22.3 ) -17.6 % 290.7 342.7 (52.0 ) -15.2 %
Cons. Entries (0.6 ) (0.8 ) 0.2 -25.0 % (1.5 ) (1.3 ) (0.2 ) 15.4 %
Total $ 418.7 $ 557.8 $ (139.1 ) -24.9 % $ 1,154.0 $ 1,577.2 $ (423.2 ) -26.8 %

Income (loss) from Operations 2/
Intermodal $ 4.9 $ 34.9 $ (30.0 ) -86.0 % $ (184.5 ) $ 96.8 $ (281.3 ) -290.6 %
Logistics (0.2 ) 1.7 (1.9 ) -111.8 % (36.3 ) (0.7 ) (35.6 ) 5085.7 %
Corporate (4.0 ) (7.3 ) 3.3 -45.2 % (13.4 ) (20.8 ) 7.4 -35.6 %
Total $ 0.7 $ 29.3 $ (28.6 ) -97.6 % $ (234.2 ) $ 75.3 $ (309.5 ) -411.0 %

Net Income (Loss) 2/ $ 0.6 $ 20.8 $ (20.2 ) -97.1 % $ (184.1 ) $ 47.6 $ (231.7 ) -486.8 %
Diluted Earnings (Loss) per Share 2/ $ 0.02 $ 0.59 $ (0.57 ) -96.6 % $ (5.30 ) $ 1.36 $ (6.66 ) -489.7 %

1/ 2008 amounts have been adjusted for the change in revenue recognition policy for the Stacktrain business unit to conform with the 2009 presentation.

2/ Nine month 2009 amounts include an intermodal segment goodwill impairment charge of $169.0 million and a logistics segment goodwill impairment charge of $31.4 million, a total of $200.4 million, $161.2 million net of tax, or $4.64 per diluted share.

INVESTOR CONTACT:
Joseph B. Doherty
EVP, Investor Relations and Treasurer
Pacer International
(925) 887-1582
joe.doherty@pacer.com
or
MEDIA CONTACT:
Bill Fahrenwald
James Street Associates
(708) 371-0110 X 1#
bfahrenwald@jamesstreetassoc.com

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