EX-99.1 2 a14-5115_1ex99d1.htm EX-99.1

Exhibit 99.1

 

GRAPHIC

 

Echo Global Logistics Reports 2013 Revenue Up 16.7% Year over Year

 

CHICAGO, February 6, 2014 — Echo Global Logistics, Inc. (Nasdaq: ECHO), a leading provider of technology-enabled transportation and supply chain management services, reported today financial results for the quarter and year ended December 31, 2013.

 

Full Year 2013 Summary

 

·                  Total revenue grew 16.7% to $884.2 million

·                  Transactional revenue grew 17.1% to $616.6 million

·                  Enterprise revenue grew 15.9% to $267.6 million, fueled by the addition of 26 new accounts

·                  Transactional revenue per sales person increased by 12.1% and total revenue per full time employee increased by 10.6%

·                  Truckload revenue grew by 19.8% to $395.5 million; LTL revenue grew by 8.7%

·                  Non-GAAP fully diluted EPS totaled $0.61, decreasing 1.8%*

 

“Our core business exhibited considerable strength in 2013, with the productivity of our sales force continuing to climb,” commented Doug Waggoner, Chief Executive Officer of Echo.  Waggoner added, “We are confident in our long term growth strategy and believe we have the right leadership in place to drive results in 2014 and beyond.”

 

Fourth Quarter 2013 Summary

 

·                  Total revenue increased 4.8% to $221.3 million from the fourth quarter of 2012

·                  Non-GAAP operating income totaled $4.1 million, decreasing 32.0% from the fourth quarter of 2012*

·                  Non-GAAP operating margin was 11.2%, down 438 basis points from the fourth quarter of 2012*

·                  Non-GAAP net income totaled $2.5 million, decreasing 27.9% from the fourth quarter of 2012*

·                  Non-GAAP fully diluted EPS was $0.11, decreasing 29.1% from the fourth quarter of 2012*

 

* All non-GAAP financial measures exclude the effects of changes in contingent consideration payable, the loss associated with the Shipper Direct acquisition in 2012 and non-recurring settlement costs in 2012. For a reconciliation of each non-GAAP financial measure to the nearest comparable GAAP financial measure, see “Reconciliation to GAAP Operating Income, Operating Margin, Net Income and Fully Diluted EPS” included in this release.

 

Results include a previously discussed $0.02 charge for the effects of separation costs associated with changes in certain senior management.

 

“Our top line results were negatively impacted by weak demand in November, which only partially recovered in December,” Waggoner continued. “Since we are a growth company, committed to long term market share gains, many of our operating costs are fixed long term investments in our people, technology, and services.  This dynamic makes our quarterly earnings subject to short term market fluctuations, and resulted in a decrease in our fourth quarter earnings both on a year over year basis, and sequentially. Despite this, our top line revenue

 

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growth rate accelerated in December and in January, and our 2013 growth rate of 16.7% reflects the continued strength of our business.”

 

Acquisition of Online Freight Services, Inc.

 

On January 24, 2014, Echo acquired substantially all of the assets of Online Freight Services, Inc. (“OFS”), an approximately $50 million annual revenue third party logistics company headquartered in Mendota Heights, MN.  Specializing in Truckload transportation services, OFS provides Echo a base of experienced truckload sales professionals and management talent, as well as a portfolio of small and middle market shippers having no substantial overlap with existing Echo clients.

 

“The OFS team strengthens our existing truckload talent base and capabilities while expanding our national presence,” commented Dave Menzel, Chief Operating Officer of Echo.  Menzel added, “This acquisition better positions Echo to penetrate new accounts while growing existing relationships across all transportation modes.”

 

Summarized financial results and select operating metrics follow:

 

2


 

 

 

 

Three months ended
December 31,

 

 

 

Years ended
December 31,

 

 

 

Amounts in 000,000s, except per share data

 

2013

 

2012

 

% change

 

2013

 

2012

 

% change

 

 

 

(unaudited)

 

 

 

(unaudited)

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Transactional

 

$

151.8

 

$

149.9

 

1.3

%

$

616.6

 

$

526.8

 

17.1

%

Enterprise

 

$

69.5

 

$

61.3

 

13.4

%

$

267.6

 

$

230.9

 

15.9

%

Total Revenue

 

221.3

 

211.2

 

4.8

%

884.2

 

757.7

 

16.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

37.0

 

39.1

 

-5.4

%

155.6

 

143.1

 

8.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions

 

9.4

 

10.6

 

-11.4

%

39.5

 

40.4

 

-2.3

%

Selling, general and administrative

 

20.8

 

19.7

 

5.1

%

82.2

 

70.0

 

17.6

%

Depreciation and amortization

 

2.7

 

2.7

 

1.4

%

10.6

 

9.1

 

15.6

%

Total operating expenses (1)

 

32.9

 

33.0

 

-0.5

%

132.3

 

119.5

 

10.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Operating income (1)

 

4.1

 

6.1

 

-32.0

%

23.3

 

23.6

 

-1.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense

 

0.0

 

0.1

 

7.7

%

0.4

 

0.4

 

-17.9

%

Non-GAAP Income before taxes (1)

 

4.1

 

6.0

 

-32.5

%

22.9

 

23.2

 

-1.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes (1)

 

1.6

 

2.5

 

-39.0

%

8.6

 

9.0

 

-3.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income (2)

 

2.5

 

3.5

 

-27.9

%

14.3

 

14.2

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Fully Diluted EPS (2)

 

$

0.11

 

$

0.15

 

-29.1

%

$

0.61

 

$

0.62

 

-1.8

%

Diluted shares

 

23.6

 

23.2

 

 

 

23.4

 

22.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation to GAAP Operating Income, Operating Margin, Net income and Fully Diluted EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Operating Income (1)

 

4.1

 

6.1

 

-32.0

%

23.3

 

23.6

 

-1.4

%

Change in contingent consideration payable

 

0.4

 

(0.3

)

209.5

%

(0.1

)

0.1

 

-178.1

%

Loss associated with Shipper Direct acquisition

 

—

 

—

 

—

 

—

 

(2.5

)

#N/A

 

Non-recurring settlement costs

 

—

 

—

 

—

 

—

 

(0.7

)

#N/A

 

Operating Income

 

4.5

 

5.8

 

-22.4

%

23.2

 

20.5

 

13.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Operating Margin (1)

 

11.2

%

15.6

%

(438

)bps

15.0

%

16.5

%

(154

)bps

Effect of change in contingent consideration payable, loss associated with Shipper Direct acquisition and non-recurring settlement costs

 

0.9

%

-0.8

%

173

bps

-0.1

%

-2.2

%

211

bps

Operating Margin (% of Net Revenue)

 

12.1

%

14.8

%

(265

)bps

14.9

%

14.3

%

56

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Net Income (2)

 

2.5

 

3.5

 

-27.9

%

14.3

 

14.2

 

0.4

%

Change in contingent consideration payable, loss associated with Shipper Direct acquisition and non-recurring settlement costs, net of tax effect

 

0.2

 

(0.2

)

217.1

%

(0.1

)

(1.9

)

-96.5

%

Net Income

 

2.7

 

3.3

 

-17.4

%

14.2

 

12.3

 

15.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Fully Diluted EPS (2)

 

$

0.11

 

$

0.15

 

-29.1

%

$

0.61

 

$

0.62

 

-1.8

%

Change in contingent consideration payable, loss associated with Shipper Direct acquisition and non-recurring settlement costs, net of tax effect

 

0.01

 

(0.01

)

215.1

%

(0.00

)

(0.08

)

-96.6

%

Fully diluted EPS

 

$

0.12

 

$

0.14

 

-18.8

%

$

0.61

 

$

0.54

 

12.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue margin

 

16.7

%

18.5

%

(180

)bps

17.6

%

18.9

%

(129

)bps

Non-GAAP Operating margin (% of net revenue) (1)

 

11.2

%

15.6

%

(438

)bps

15.0

%

16.5

%

(154

)bps

Shipment volume

 

448,778

 

426,095

 

5.3

%

1,834,679

 

1,649,338

 

11.2

%

Total employees

 

1,297

 

1,364

 

-4.9

%

1,297

 

1,364

 

-4.9

%

Sales employees and agents

 

825

 

870

 

-5.2

%

825

 

870

 

-5.2

%

Less Than Truckload (LTL) Revenue %

 

41.1

%

40.8

%

22

bps

41.5

%

44.5

%

(307

)bps

Truckload (TL) Revenue %

 

44.1

%

43.1

%

104

bps

44.7

%

43.6

%

116

bps

Intermodal Revenue %

 

7.4

%

8.6

%

(120

)bps

7.3

%

4.9

%

235

bps

 

(1)         Amounts shown exclude the effects of changes in contingent consideration, the loss associated with the Shipper Direct acquisition in 2012 and non-recurring settlement costs in 2012.

(2)         Amounts shown exclude the tax effected changes in contingent consideration payable, the loss associated with the Shipper Direct acquisition in 2012 and non-recurring settlement costs in 2012.

 

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Milestone $1 Billion Revenue Run Rate in Sight

 

“We continue to execute our long term growth strategy by remaining steadfastly focused on growing revenue and profitability,” stated Kyle Sauers, Chief Financial Officer of Echo.  Sauers continued, “In 2014, we anticipate delivering total revenue in the range of $1.02 billion to $1.08 billion.”

 

Conference Call

 

A conference call, with accompanying presentation slides, will be broadcast live on February 6, 2014 at 4:00 p.m. Central Time (5:00 p.m. Eastern Time).  Doug Waggoner, Chief Executive Officer, Dave Menzel, Chief Operating Officer, and Kyle Sauers, Chief Financial Officer, will host the call.  To participate in the call, dial (877) 303-6235 (toll free) or (631) 291-4837 (toll) and reference “Echo Global Logistics.”  To listen to a live webcast of the call, visit the Echo website at http://ir.echo.com.  A replay of the webcast will be available for one year following the live webcast in the Investor Relations section of the Echo website.

 

Non-GAAP Financial Measures

 

This release includes the following financial measures defined as “non-GAAP financial measures” by the Securities and Exchange Commission (the “SEC”): Non-GAAP Operating Income, Non-GAAP Operating Margin, Non-GAAP Net Income and Non-GAAP Fully Diluted EPS. We refer to these Non-GAAP financial measures to describe earnings and earnings per share excluding the effects of changes in contingent consideration payable, the loss associated with the Shipper Direct acquisition in 2012 and non-recurring settlement charges in 2012.  We believe such measures provide useful information to investors because they provide information about the financial performance of the Company’s ongoing business.

 

Non-GAAP Operating Income, Non-GAAP Operating Margin, Non-GAAP Net Income and Non-GAAP Fully Diluted EPS are used by management in its financial and operational decision-making and evaluation of overall operating performance. These measures may be different from similar measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. For a reconciliation of each non-GAAP financial measure to the nearest comparable GAAP financial measure, see “Reconciliation to GAAP Operating Income, Operating Margin, Net Income and Fully Diluted EPS” included in this release.

 

Forward-Looking Statements

 

This release contains statements relating to future results. These statements are forward-looking statements under the federal securities laws. We can give no assurance that any future results discussed in these statements will be achieved. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from the statements contained in this release. For a discussion of important factors that could affect our actual results, please refer to our SEC filings, including the “Risk Factors” section of the most recent Form 10-K we filed with the SEC.

 

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Echo Global Logistics, Inc.

Condensed Consolidated Statements of Operations

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

(Unaudited)

 

(Unaudited)

 

REVENUE

 

$

221,322,456

 

$

211,150,018

 

$

884,193,289

 

$

757,687,585

 

 

 

 

 

 

 

 

 

 

 

COSTS AND EXPENSES

 

 

 

 

 

 

 

 

 

Transportation costs

 

184,367,194

 

172,087,274

 

728,543,525

 

614,562,437

 

Selling, general, and administrative expenses

 

29,783,336

 

30,639,074

 

121,881,168

 

113,454,258

 

Depreciation and amortization

 

2,696,123

 

2,658,971

 

10,564,657

 

9,139,232

 

INCOME FROM OPERATIONS

 

4,475,803

 

5,764,699

 

23,203,939

 

20,531,658

 

OTHER EXPENSE

 

(79,563

)

(73,570

)

(355,837

)

(433,401

)

INCOME BEFORE PROVISION FOR INCOME TAXES

 

4,396,240

 

5,691,129

 

22,848,102

 

20,098,257

 

INCOME TAX EXPENSE

 

(1,655,200

)

(2,370,645

)

(8,645,488

)

(7,776,843

)

NET INCOME

 

$

2,741,040

 

$

3,320,484

 

$

14,202,614

 

$

12,321,414

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 

$

0.12

 

$

0.15

 

$

0.62

 

$

0.55

 

Diluted net income per share

 

$

0.12

 

$

0.14

 

$

0.61

 

$

0.54

 

 

Echo Global Logistics, Inc.

Condensed Consolidated Balance Sheets

 

 

 

December 31,

 

December 31,

 

 

 

2013

 

2012

 

 

 

(unaudited)

 

 

 

Cash and cash equivalents

 

$

52,506,560

 

$

41,780,984

 

Accounts receivable, net of allowance for doubtful accounts

 

109,662,529

 

96,623,553

 

Prepaid expenses

 

2,510,791

 

2,491,955

 

Other current assets

 

2,402,323

 

843,009

 

Total long term assets

 

78,064,390

 

77,743,563

 

Total assets

 

$

245,146,593

 

$

219,483,064

 

 

 

 

 

 

 

Accounts payable — trade

 

$

65,322,807

 

$

58,889,437

 

Current maturities of capital lease obligations

 

—

 

24,086

 

Other current liabilites

 

14,085,896

 

11,142,583

 

Deferred income taxes

 

3,547,426

 

1,915,847

 

Long term liabilities

 

2,960,433

 

6,525,701

 

Stockholders’ equity

 

159,230,031

 

140,985,410

 

Total liabilities and stockholders’ equity

 

$

245,146,593

 

$

219,483,064

 

 

5


 

Echo Global Logistics, Inc.

Condensed Consolidated Statements of Cash Flows

 

 

 

Year Ended December 31,

 

 

 

2013

 

2012

 

 

 

(Unaudited)

 

Net cash provided by operating activities

 

$

24,803,118

 

$

22,787,967

 

 

 

 

 

 

 

Net cash used in investing activities

 

(11,197,042

)

(25,285,290

)

 

 

 

 

 

 

Net cash used in financing activities

 

(2,880,500

)

(2,729,002

)

 

 

 

 

 

 

Increase (Decrease) in cash and cash equivalents

 

10,725,576

 

(5,226,325

)

Cash and cash equivalents, beginning of period

 

41,780,984

 

47,007,309

 

Cash and cash equivalents, end of period

 

$

52,506,560

 

$

41,780,984

 

 

About Echo Global Logistics

 

Echo Global Logistics, based in Chicago, is a leading provider of technology-enabled transportation and supply chain management services.  Echo maintains a proprietary web-based technology platform that compiles and analyzes data from its network of over 24,000 transportation providers to serve its clients’ transportation and supply chain management needs. Echo services clients across a wide range of industries, such as manufacturing, construction, consumer products and retail. For more information on Echo, visit: www.echo.com.

 

ECHO: Earnings

 

INVESTOR RELATIONS CONTACT:

Suzanne Karpick, Echo Global Logistics, (312) 784-7414

 

MEDIA CONTACT:

Hanni Itah, SSPR, (847) 415-9324

 

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