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Jul 27,2016

Echo Global Logistics Reports Record Second Quarter Results; Revenue Up 19% Year Over Year

CHICAGO, IL -- (Marketwired) -- 07/27/16 -- Echo Global Logistics, Inc. (NASDAQ: ECHO), a leading provider of technology-enabled transportation management services, today reported financial results for the quarter ended June 30, 2016.

"Echo posted another strong quarter of record volumes and revenue in a market with continuing soft demand and capacity," said Doug Waggoner, Chairman and Chief Executive Officer of Echo. "We are very pleased with this growth and believe it highlights the value we bring to both shippers and carriers in any environment. We are excited to soon begin to enjoy the benefits of the full integration of our Command acquisition in the coming months."

Second Quarter 2016 Highlights

  • Total revenue increased by 19% to $444 million from the second quarter of 2015; net revenue increased by 22% to $85 million from the second quarter of 2015 (1)
  • Net income increased 383% to $1.9 million; non-GAAP EBITDA(1) grew 10% to $18.5 million, or 28% to $21.5 million after excluding $3.1 million of Command integration costs
  • Fully diluted EPS increased to $0.07 in the second quarter of 2016; non-GAAP fully-diluted EPS(1) decreased to $0.27 in the second quarter of 2016, or increased to $0.33 after excluding $3.1 million of Command integration costs
  • Truckload volume increased by 60% from the second quarter of 2015

(1) Represents a non-GAAP financial measure. For a reconciliation of each non-GAAP financial measure to the nearest comparable GAAP financial measure, see the "Reconciliation of Non-GAAP Financial Measures" section of this Press Release.

Summarized financial results and select operating metrics follow:

Dollars in millions, except per share data Three months ended June 30,
2016 2015 % change
(unaudited)
Transactional revenue $ 362.0 $ 295.3 22.6 %
Managed transportation revenue 81.8 76.3 7.2 %
Revenue 443.8 371.6 19.4 %
Transportation costs 358.6 302.1 18.7 %
Net revenue (1) 85.2 69.5 22.5 %
Commission expense 25.2 20.4 23.5 %
Change in contingent consideration 0.0 0.3 (87.9 %)
Acquisition-related transaction costs - 5.9 (100.0 %)
Stock compensation expense 3.8 2.6 45.1 %
Other selling, general and administrative 41.5 32.3 28.4 %
Selling, general and administrative expense 70.5 61.5 14.8 %
Depreciation 3.6 3.0 22.8 %
Amortization 4.0 2.3 72.8 %
Depreciation and amortization 7.6 5.3 44.7 %
Operating income 7.0 2.8 148.1 %
Cash interest expense 1.6 1.1 55.5 %
Non-cash interest expense 1.9 1.3 49.5 %
Term Loan B commitment fees (non-recurring interest expense) - 2.0 (100.0 %)
Other expense - 0.1 (100.0 %)
Interest and other expense 3.5 4.4 (19.9 %)
Income (Loss) before provision for income taxes 3.5 (1.6 ) 325.7 %
Income tax expense (benefit) 1.6 (0.9 ) 281.0 %
Net income (loss) 1.9 (0.7 ) 383.3 %
Fully diluted income (loss) per share $ 0.07 $ (0.03 ) 333.3 %
Diluted shares 29.6 27.7
(1) See the "Reconciliation of Non-GAAP Financial Measures" and "Non-GAAP Financial Measures" sections of this Press Release.
Three months ended June 30,
2016 2015 % change
Reconciliation of Non-GAAP Financial Measures (unaudited)
Total revenue $ 443.8 $ 371.6 19.4 %
Transportation costs 358.6 302.1 18.7 %
Net revenue (1) $ 85.2 $ 69.5 22.5 %
Net income (loss) $ 1.9 $ (0.7 ) 383.3 %
Change in contingent consideration 0.0 0.3 (87.9 %)
Depreciation 3.6 3.0 22.8 %
Amortization 4.0 2.3 72.8 %
Acquisition-related transaction costs - 5.9 (100.0 %)
Non-cash interest expense 1.9 1.3 49.5 %
Term Loan B commitment fees (non-recurring interest expense) - 2.0 (100.0 %)
Stock compensation expense 3.8 2.6 45.1 %
Cash interest expense 1.6 1.1 55.5 %
Other expense - 0.1 (100.0 %)
Income tax expense (benefit) 1.6 (0.9 ) 281.0 %
Non-GAAP EBITDA (1) $ 18.5 $ 16.8 9.8 %
Fully diluted income (loss) per share $ 0.07 $ (0.03 ) 333.3 %
Change in contingent consideration 0.00 0.01 (88.7 %)
Amortization 0.13 0.08 61.9 %
Acquisition-related transaction costs - 0.21 (100.0 %)
Non-cash interest expense 0.06 0.05 40.0 %
Term Loan B commitment fees (non-recurring interest expense) - 0.07 (100.0 %)
Stock compensation expense 0.13 0.09 35.9 %
Tax effect of adjustments (0.12 ) (0.18 ) (31.8 %)
Non-GAAP fully diluted EPS (1) $ 0.27 $ 0.30 (10.0 %)
Operating Metrics
Net revenue margin 19.2 % 18.7 % 48 bps
Total employees 2,389 2,430 (1.7 %)
Sales employees and agents 1,654 1,687 (2.0 %)
Truckload (TL) revenue % 67.5 % 61.3 % 623 bps
Less Than Truckload (LTL) revenue % 26.5 % 32.0 % (540 ) bps
Intermodal revenue % 4.4 % 4.9 % (55 ) bps
(1) See the "Non-GAAP Financial Measures" section of this Press Release for the definition, and a discussion of, each Non-GAAP financial measure.

2016 Full Year Guidance

"Considering both our strong volume trends and persistently lower rates, we are updating our full year 2016 total revenue guidance to be in the range of $1.70 billion to $1.76 billion," said Kyle Sauers, Chief Financial Officer of Echo.

Conference Call

A conference call, with accompanying presentation slides, will be broadcast live on July 27, 2016 at 4:00 p.m. Central Time (5:00 p.m. Eastern Time). Doug Waggoner, Chairman and Chief Executive Officer, Dave Menzel, President and 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. To listen to an audio replay, call 855-859-2056 (toll free) or 404-537-3406 (toll) and enter conference ID 45114857. The audio replay will be available through August 3, 2016.

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"): Net Revenue, Non-GAAP EBITDA and Non-GAAP Fully Diluted EPS. Net revenue is calculated as total revenue less transportation costs. Non-GAAP EBITDA is defined as net income excluding the effects of changes in contingent consideration, depreciation, amortization, acquisition-related transaction costs, Term Loan B commitment fees, stock compensation expense, cash and non-cash interest expense, other expense and income taxes. Non-GAAP Fully Diluted EPS is defined as fully diluted EPS excluding changes in contingent consideration, amortization, acquisition-related transaction costs, non-cash interest expense, Term Loan B commitment fees, stock compensation expense and the tax effect of these adjustments. We believe such measures provide useful information to investors because they provide information about the financial performance of the Company's ongoing business.

Net revenue, Non-GAAP EBITDA 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 of Non-GAAP Financial Measures" 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 our Annual Report on Form 10-K for the year ended December 31, 2015.

Echo Global Logistics, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended June 30, Six Months Ended June 30,
2016 2015 2016 2015
(unaudited) (unaudited)
REVENUE $ 443,829,924 $ 371,642,242 $ 849,107,456 $ 655,133,816
COSTS AND EXPENSES
Transportation costs 358,652,347 302,100,945 683,103,064 532,340,803
Selling, general, and administrative expenses 70,532,891 61,450,284 140,009,379 105,478,097
Depreciation and amortization 7,598,376 5,251,020 15,127,709 9,124,157
INCOME FROM OPERATIONS 7,046,310 2,839,993 10,867,304 8,190,759
INTEREST / OTHER EXPENSE (3,524,166 ) (4,400,621 ) (7,027,561 ) (4,490,610 )
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES 3,522,144 (1,560,628 ) 3,839,743 3,700,149
INCOME TAX (EXPENSE) BENEFIT (1,591,375 ) 879,000 (1,646,363 ) (1,054,000 )
NET INCOME (LOSS) $ 1,930,769 $ (681,628 ) $ 2,193,380 $ 2,646,149
Basic net income (loss) per share $ 0.07 $ (0.03 ) $ 0.08 $ 0.10
Diluted net income (loss) per share $ 0.07 $ (0.03 ) $ 0.07 $ 0.10
Echo Global Logistics, Inc.
Condensed Consolidated Balance Sheets
June 30, December 31,
2016 2015
(unaudited)
Cash and cash equivalents $ 40,114,570 $ 56,522,194
Accounts receivable, net of allowance for doubtful accounts 228,663,211 196,420,614
Other current assets 9,140,796 7,881,156
Total noncurrent assets 482,093,654 485,685,818
Total assets $ 760,012,231 $ 746,509,782
Accounts payable $ 133,142,622 $ 103,985,783
Other current liabilities 33,339,460 33,406,353
Convertible notes, net 200,057,163 196,659,354
Other noncurrent liabilities 24,973,667 17,208,718
Stockholders' equity 368,499,319 395,249,574
Total liabilities and stockholders' equity $ 760,012,231 $ 746,509,782
Echo Global Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30,
2016 2015
(unaudited)
Net cash provided by operating activities $ 33,405,125 $ 34,666,999
Net cash used in investing activities (12,827,953 ) (397,116,949 )
Net cash (used in) provided by financing activities (36,984,796 ) 387,555,001
(Decrease) Increase in cash and cash equivalents (16,407,624 ) 25,105,051
Cash and cash equivalents, beginning of period 56,522,194 32,542,119
Cash and cash equivalents, end of period $ 40,114,570 $ 57,647,170

About Echo Global Logistics

Echo Global Logistics, Inc. (NASDAQ: ECHO) is a leading provider of technology-enabled transportation and supply chain management services. Headquartered in Chicago with more than 30 offices around the country, Echo offers freight brokerage and Managed Transportation solutions for all major modes, including TL, partial TL, LTL, intermodal, and expedited. Echo maintains a proprietary, web-based technology platform that compiles and analyzes data from its network of over 30,000 transportation providers to serve clients across a wide range of industries and simplify the critical tasks involved in transportation management. For more information on Echo Global Logistics, visit: www.echo.com.

ECHO: Earnings

INVESTOR RELATIONS CONTACTS:
Kyle Sauers
Chief Financial Officer
Echo Global Logistics
312-784-7695

Zach Jecklin
Director of Finance
Echo Global Logistics
312-784-2046

MEDIA CONTACTS:
Christopher Clemmensen
SVP of Marketing
Echo Global Logistics
312-784-2132

Source: Echo Global Logistics

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Contact Investor Relations
600 West Chicago Avenue, #725
Chicago, IL 60654
zjecklin@echo.com
312-784-2046

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