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Feb 07,2013

Echo Global Logistics Announces Fourth Quarter and Full Year 2012 Results

CHICAGO, IL -- (Marketwire) -- 02/07/13 -- 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, 2012.

Echo reported Non-GAAP net income of $3.5 million and Non-GAAP fully diluted EPS of $0.15 per share in the fourth quarter of 2012. Included in these results is the effect of a higher income tax rate in the fourth quarter of 2012 of $0.01 per share; excluded are the effects of changes in contingent consideration payable.

"Echo posted total revenue of over $211 million in the fourth quarter of 2012, an increase of almost 30% from the fourth quarter of 2011," said Doug Waggoner, Chief Executive Officer of Echo. Waggoner added, "This growth was achieved despite a soft freight environment, and was driven by the investments we are making in our business."

Fourth Quarter Highlights

  • Total revenue was $211.2 million, an increase of 29.7% from the fourth quarter of 2011.
  • Non-GAAP operating income totaled $6.1 million, an increase of 17.0% from the fourth quarter of 2011.*
  • Non-GAAP operating margin was 15.6%, down 79 bps from the fourth quarter of 2011.*
  • Non-GAAP net income was $3.5 million, a decrease of 0.8% from the fourth quarter of 2011.*
  • Non-GAAP fully diluted EPS was $0.15, a decrease of $0.01 from the fourth quarter of 2011.*

Full Year Highlights

  • Total revenue increased 25.7% in 2012 to $757.7 million compared with $602.8 million in 2011.
  • Non-GAAP operating income increased 26.5% in 2012 to $23.6 million compared with $18.7 million in 2011.*
  • Non-GAAP operating margin increased 57 basis points to 16.5% in 2012 from 15.9% in 2011.*
  • Non-GAAP net income increased 19.5% in 2012 to $14.2 million compared with $11.9 million in 2011.*
  • Non-GAAP fully diluted EPS was $0.62, increasing 17.9% from 2011.*

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

Summarized financial results and select operating metrics follow:






       ---------------------------      -------------------------------

       Three months ended                 Year ended December

          December 31,                            31,

                              %                                    %

         2012      2011     change         2012        2011      change

Amount

 s in

 000,0

 00s,

 excep

 t per

 share

 data      (unaudited)                        (unaudited)

       ---------------------------      -------------------------------

Revenu

 e:

 Trans

  acti

  onal $  149.9  $  110.5     35.7%     $    526.8  $    409.0     28.8%

 Enter

  pris

  e    $   61.3  $   52.4     16.9%     $    230.9  $    193.8     19.2%

       --------  --------  -------      ----------  ----------  -------

  Tota

   l

   Rev

   enu

   e      211.2     162.9     29.7%          757.7       602.8     25.7%



Net

 reven

 ue        39.1      31.8     22.9%          143.1       117.2     22.1%



Operat

 ing

 expen

 ses

 Commi

  ssio

  ns       10.6       9.9      6.7%           40.4        35.9     12.6%

 Selli

  ng,

  gene

  ral

  and

  admi

  nist

  rati

  ve       19.7      14.5     36.2%           70.0        54.3     28.8%

 Depre

  ciat

  ion

  and

  amor

  tiza

  tion      2.7       2.2     22.1%            9.1         8.3      9.7%

       --------  --------  -------      ----------  ----------  -------

  Tota

   l

   ope

   rat

   ing

   exp

   ens

   es

   (1)     33.0      26.6     24.1%          119.5        98.5     21.3%



       --------  --------  -------      ----------  ----------  -------

Non-

 GAAP

 Opera

 ting

 incom

 e (1)      6.1       5.2     17.0%           23.6        18.7     26.5%

       --------  --------  -------      ----------  ----------  -------



Other

 expen

 se         0.1       0.1     35.4%            0.4         0.3     58.3%

       --------  --------  -------      ----------  ----------  -------

Non-

 GAAP

 Incom

 e

 befor

 e

 taxes

 (1)        6.0       5.1     16.8%           23.2        18.4     26.0%

       --------  --------  -------      ----------  ----------  -------



Income

 taxes

 (1)        2.5       1.6     55.4%            9.0         6.5     37.8%



       --------  --------  -------      ----------  ----------  -------

Non

 GAAP

 net

 incom

 e (2)      3.5       3.5     -0.8%           14.2        11.9     19.5%

       ========  ========  =======      ==========  ==========  =======



       --------  --------  -------      ----------  ----------  -------

Non

 GAAP

 EPS

 (2)   $   0.15  $   0.16     -3.2%     $     0.62  $     0.53     17.9%

       ========  ========  =======      ==========  ==========  =======

Dilute

 d

 share

 s         23.2      22.6                     22.9        22.6



       --------  --------  -------      ----------  ----------  -------

Reconc

 iliat

 ion

 to

 GAAP

 Opera

 ting

 Incom

 e,

 Opera

 ting

 Margi

 n,

 Net

 incom

 e and

 EPS

       --------  --------  -------      ----------  ----------  -------

Non-

 GAAP

 Opera

 ting

 Incom

 e (1)      6.1       5.2     17.0%           23.6        18.7     26.5%

 Chang

  e in

  cont

  inge

  nt

  cons

  ider

  atio

  n

  paya

  ble      (0.3)     (0.0) 80473.5%            0.1         0.2    -47.5%

 Loss

  asso

  ciat

  ed

  with

  Ship

  per

  Dire

  ct

  acqu

  isit

  ion         -         -      n/a            (2.5)          -      n/a

 Non-

  recu

  rrin

  g

  sett

  leme

  nt

  cost

  s           -         -      n/a            (0.7)          -      n/a

       --------  --------  -------      ----------  ----------  -------

Operat

 ing

 Incom

 e          5.8       5.2     11.0%           20.5        18.9      8.4%

       --------  --------  -------      ----------  ----------  -------



Non-

 GAAP

 Opera

 ting

 Margi

 n (1)     15.6%     16.3%     (79) bps       16.5%       15.9%      57  bps

 Effec

  t of

  chan

  ge

  in

  cont

  inge

  nt

  cons

  ider

  atio

  n

  paya

  ble,

  loss

  asso

  ciat

  ed

  with

  Ship

  per

  Dire

  ct

  acqu

  isit

  ion,

  and

  non-

  recu

  rrin

  g

  sett

  leme

  nt

  cost

  s        -0.8%      0.0%     (80) bps       -2.2%        0.3%    (238) bps

       --------  --------  -------      ----------  ----------  -------

Operat

 ing

 Margi

 n (%

 of

 Net

 Reven

 ue)       14.8%     16.3%    (159) bps       14.3%       16.2%    (181) bps

       --------  --------  -------      ----------  ----------  -------



Non-

 GAAP

 Net

 Incom

 e (2)      3.5       3.5     -0.8%           14.2        11.9     19.5%

 Chang

  e in

  cont

  inge

  nt

  cons

  ider

  atio

  n

  paya

  ble,

  loss

  asso

  ciat

  ed

  with

  Ship

  per

  Dire

  ct

  acqu

  isit

  ion,

  and

  non-

  recu

  rrin

  g

  sett

  leme

  nt

  cost

  s,

  net

  of

  tax

  effe

  ct       (0.2)     (0.0) 74517.4%           (1.9)        0.1  -1318.8%

       --------  --------  -------      ----------  ----------  -------

Net

 Incom

 e          3.3       3.5     -6.0%           12.3        12.0      2.3%

       ========  ========  =======      ==========  ==========  =======



Non-

 GAAP

 Fully

 Dilut

 ed

 EPS

 (2)   $   0.15  $   0.16     -3.2%     $     0.62  $     0.53     17.9%

 Chang

  e in

  cont

  inge

  nt

  cons

  ider

  atio

  n

  paya

  ble,

  loss

  asso

  ciat

  ed

  with

  Ship

  per

  Dire

  ct

  acqu

  isit

  ion,

  and

  non-

  recu

  rrin

  g

  sett

  leme

  nt

  cost

  s,

  net

  of

  tax

  effe

  ct      (0.01)    (0.00) 72737.6%          (0.08)       0.00  -1301.6%

       --------  --------  -------      ----------  ----------  -------

Fully

 dilut

 ed

 EPS   $   0.14  $   0.16     -8.2%     $     0.54  $     0.53      0.8%

       ========  ========  =======      ==========  ==========  =======



       --------  --------  -------      ----------  ----------  -------

Operat

 ing

 Metri

 cs

       --------  --------  -------      ----------  ----------  -------

 Net

  reve

  nue

  marg

  in       18.5%     19.5%    (102) bps       18.9%       19.4%     (56) bps

 Opera

  ting

  marg

  in

  (%

  of

  net

  reve

  nue)

  (1)      15.6%     16.3%     (79) bps       16.5%       15.9%      57  bps



 Shipm

  ent

  volu

  me    426,095   354,595     20.2%      1,649,338   1,376,006     19.9%

 Numbe

  r of

  ente

  rpri

  se

  clie

  nts       203       177     14.7%            203         177     14.7%

 Total

  empl

  oyee

  s       1,364     1,157     17.9%          1,364       1,157     17.9%

 Sales

  empl

  oyee

  s

  and

  agen

  ts        873       757     15.3%            873         757     15.3%

 Less

  Than

  Truc

  kloa

  d

  (LTL

  )

  Reve

  nue

  %        40.8%     45.7%    (481) bps       44.5%       47.5%    (297) bps

 Truck

  load

  (TL)

  Reve

  nue

  %        43.1%     44.3%    (119) bps       43.6%       43.6%      (5) bps

 Inter

  moda

  l

  Reve

  nue

  %         8.6%      2.7%     592  bps        4.9%        1.9%     299  bps



(1) Amounts shown exclude the effects of changes in contingent consideration

 payable, non-recurring settlement costs, and the loss associated with the

 Shipper Direct acquisition

(2) Amounts shown exclude the tax effected changes in contingent

 consideration payable, non-recurring settlement costs, and the loss

 associated with the Shipper Direct acquisition







Included in our full year results is a $0.07 charge for an acquisition related loss on the acquisition of Shipper Direct. We have filed a Form 8-K reflecting the impact on our third quarter results. We intend to file a Form 10QA as soon as practically possible.

"Our fourth quarter results reflect the resiliency of our market strategy in all phases of the economic cycle," said Dave Menzel, Chief Financial Officer of Echo. He added, "Our Sharp acquisition supplemented our organic growth strategy with $18.5 million of revenue during the quarter, while our Enterprise business complemented our transactional client base in the fourth quarter, growing by 16.9% compared to the fourth quarter of 2011. As we made investments in our sales force and technology to support our long term growth objectives, our diversified sales strategy continued to deliver double digit total revenue growth."

Business Outlook
Waggoner stated, "Our investments in our people and our service capabilities during 2012 position us well for continued growth and improving profitability in 2013. We are focused on generating returns from these investments while continuing to execute our long term strategy."

"In 2013, we anticipate delivering total revenue in the range of $940 million to $980 million and earnings per share in the range of $0.82 to $0.90," Mr. Waggoner continued. "We anticipate operating margin increases in the second half of the year."

Conference Call
A conference call, with accompanying presentation slides, will be broadcast live on February 7, 2013 at 4:00 p.m. Central Time (5:00 p.m. Eastern Time). Doug Waggoner, Chief Executive Officer, and Dave Menzel, Chief Financial Officer, will host the call. To participate in the call, dial (877) 303-6235 (toll free) or (631) 291-4837 (toll) and provide conference ID "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: Non-GAAP Operating Income, Non-GAAP Operating Margin, Non-GAAP Net Income and Non-GAAP Fully Diluted EPS. We refer to Non-GAAP Operating Income, Non-GAAP Operating Margin, Non-GAAP Net Income and Non-GAAP Fully Diluted EPS to describe earnings and earnings per share excluding the effects of changes in contingent consideration payable, non-recurring settlement costs and the charge for a loss related to the acquisition of Shipper Direct. We believe that Non-GAAP Operating Income, Non-GAAP Operating Margin, Non-GAAP Net Income and Non-GAAP Fully Diluted EPS 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. Non-GAAP Operating Income, Non-GAAP Operating Margin, Non-GAAP Net Income and Non-GAAP Fully Diluted EPS 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 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.


                        Echo Global Logistics, Inc.

              Condensed Consolidated Statements of Operations





                         Three Months Ended          Twelve Months Ended

                            December 31,                December 31,

                         2012          2011          2012          2011

                             (Unaudited)          (Unaudited)

                     --------------------------  --------------------------

REVENUE              $211,150,018  $162,857,428  $757,687,585  $602,763,471



COSTS AND EXPENSES

 Transportation

  costs               172,087,274   131,072,715   614,562,437   485,546,842

 Selling, general,

  and administrative

  expenses             30,639,074    24,412,069   113,454,258    89,952,126

 Depreciation and

  amortization          2,658,971     2,177,074     9,139,232     8,329,836

                     ------------  ------------  ------------  ------------

INCOME FROM

 OPERATIONS             5,764,699     5,195,570    20,531,658    18,934,667

OTHER EXPENSE             (73,570)      (53,885)     (433,401)     (273,176)

                     ------------  ------------  ------------  ------------

INCOME BEFORE

 PROVISION FOR

 INCOME TAXES           5,691,129     5,141,685    20,098,257    18,661,491

INCOME TAX EXPENSE     (2,370,645)   (1,609,727)   (7,776,843)   (6,613,319)

                     ------------  ------------  ------------  ------------

NET INCOME           $  3,320,484  $  3,531,958  $ 12,321,414  $ 12,048,172

                     ============  ============  ============  ============



Basic net income per

 share               $       0.15  $       0.16  $       0.55  $       0.54

Diluted net income

 per share           $       0.14  $       0.16  $       0.54  $       0.53







                         Echo Global Logistics, Inc.

                    Condensed Consolidated Balance Sheets



                                               December 31,    December 31,

                                                   2012            2011

                                               (Unaudited)

                                             --------------- ---------------

  Cash and cash equivalents                  $    41,780,984 $    47,007,309

  Accounts receivable, net of allowance for

   doubtful accounts                              96,623,553      89,191,456

  Prepaid expenses                                 2,491,955       4,634,612

  Other current assets                               843,009         800,648

  Total long term assets                          77,743,563      58,864,061

                                             --------------- ---------------

Total assets                                 $   219,483,064 $   200,498,086

                                             =============== ===============



  Accounts payable - trade                   $    58,889,437 $    59,949,927

  Current maturities of capital lease

   obligations                                        24,086         175,166

  Other liabilites                                12,074,645      10,474,434

  Deferred income taxes                            1,915,847       2,979,483

  Long term liabilities                            5,593,639       7,597,478

  Stockholders' equity                           140,985,410     119,321,598

                                             --------------- ---------------

Total liabilities and stockholders' equity   $   219,483,064 $   200,498,086

                                             =============== ===============



                                                           -               -





                        Echo Global Logistics, Inc.

              Condensed Consolidated Statements of Cash Flows



                                          Twelve Months Ended December 31,

                                               2012              2011

                                            (Unaudited)

                                         ----------------  ----------------

Net cash provided by operating

 activities                              $     22,787,967  $     15,749,580



Net cash used in investing activities         (25,285,290)      (11,344,927)



Net cash provided by (used in) financing

 activities                                    (2,729,002)         (615,508)

                                         ----------------  ----------------



Increase/(decrease) in cash and cash

 equivalents                                   (5,226,325)        3,789,145

Cash and cash equivalents, beginning of

 period                                        47,007,309        43,218,164

                                         ----------------  ----------------

Cash and cash equivalents, end of period $     41,780,984  $     47,007,309

                                         ================  ================





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.

Source: Echo Global Logistics

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