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Oct 24,2018

Echo Global Logistics Reports Record Third Quarter Revenue; Up 27% Year over Year

CHICAGO, Oct. 24, 2018 (GLOBE NEWSWIRE) -- Echo Global Logistics, Inc. (NASDAQ: ECHO), a leading provider of technology-enabled transportation management services, today reported financial results for the quarter ended September 30, 2018.

"We have achieved our sixth quarter in a row with record revenue, while at the same time improving profitability," said Doug Waggoner, Chairman of the Board of Directors and Chief Executive Officer at Echo. "The combination of our highly integrated technology and talented team continues to drive value for our shippers and carriers."

Third Quarter 2018 Highlights

  • Revenue increased 26.6% to $644.8 million from the third quarter of 2017
  • Truckload ("TL") (includes Partial TL) revenue increased 28.3% and less than truckload ("LTL") revenue increased 22.6% from the third quarter of 2017
  • Transactional revenue increased 27.2% to $510.3 million and Managed Transportation revenue increased 24.1% to $134.5 million from the third quarter of 2017
  • Net revenue(1) increased 28.3% to $111.2 million from the third quarter of 2017
  • Net income increased to $9.4 million, compared to $2.4 million in the third quarter of 2017
  • Fully diluted EPS increased to $0.33 in the third quarter of 2018; non-GAAP fully diluted EPS(1) increased to $0.55 in the third quarter of 2018
  • Adjusted EBITDA(1) grew 68.3% to $28.2 million, compared to $16.8 million in the third quarter of 2017

_____________________
(1)Represents a non-GAAP financial measure. For the definition and a discussion of each non-GAAP financial measure contained in this release, see "Non-GAAP Financial Measures." 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 are as follows:

         
    Three Months Ended September 30,    
Dollars in millions, except per share data   2018   2017   % change
    (unaudited)    
Transactional revenue   $ 510.3     $ 401.2     27.2 %
Managed Transportation revenue   134.5     108.4     24.1 %
Revenue   644.8     509.5     26.6 %
             
Transportation costs   533.6     422.8     26.2 %
Net revenue (1)   111.2     86.7     28.3 %
             
Commission expense   33.2     26.5     25.4 %
Change in contingent consideration   0.1     0.3     (83.6) %
Acquisition-related transaction costs   0.3         100.0 %
Stock compensation expense   2.4     2.0     15.8 %
Other selling, general and administrative   49.9     43.5     14.6 %
Selling, general and administrative expenses   85.7     72.3     18.6 %
             
Depreciation   6.0     4.6     30.5 %
Amortization   3.3     3.6     (8.0) %
Depreciation and amortization   9.2     8.1     13.6 %
             
Income from operations   16.3     6.3     158.7 %
             
Cash interest expense   1.6     1.6     (0.9) %
Non-cash interest expense   2.2     2.0     6.0 %
Interest expense, net   3.8     3.7     2.9 %
Income before provision for income taxes   12.5     2.6     377.5 %
Income tax expense   (3.1 )   (0.2 )   NM  
Net income   $ 9.4     $ 2.4     292.3 %
             
Fully diluted EPS   $ 0.33     $ 0.09     284.2 %
Diluted shares(1)   28.2     27.6      
Note: Amounts may not foot due to rounding.            
             
 
(1)See the "Reconciliation of Non-GAAP Financial Measures" and "Non-GAAP Financial Measures" sections of this Press Release.


           
Reconciliation of Non-GAAP Financial Measures   Three Months Ended September 30,      
Dollars in millions, except per share data   2018   2017   % change  
    (unaudited)      
Revenue   $ 644.8     $ 509.5     26.6 %  
Transportation costs   533.6     422.8     26.2 %  
Net revenue (1)   $ 111.2     $ 86.7     28.3 %  
               
Net income   $ 9.4     $ 2.4     292.3 %  
Depreciation   6.0     4.6     30.5 %  
Amortization   3.3     3.6     (8.0) %  
Non-cash interest expense   2.2     2.0     6.0 %  
Cash interest expense   1.6     1.6     (0.9) %  
Income tax expense   3.1     0.2     NM    
EBITDA (1)   $ 25.5     $ 14.4     76.9 %  
Acquisition-related transaction costs   0.3         100.0 %  
Change in contingent consideration   0.1     0.3     (83.6) %  
Stock compensation expense   2.4     2.0     15.8 %  
Adjusted EBITDA (1)   $ 28.2     $ 16.8     68.3 %  
               
Fully diluted EPS   $ 0.33     $ 0.09     284.2 %  
Change in contingent consideration   0.00     0.01     (83.9) %  
Amortization   0.12     0.13     (9.9) %  
Acquisition-related transaction costs   0.01         100.0 %  
Non-cash interest expense   0.08     0.07     3.7 %  
Stock compensation expense   0.08     0.07     13.4 %  
Tax effect of adjustments   (0.07 )   (0.11 )   31.5 %  
Non-GAAP fully diluted EPS (1)   $ 0.55     $ 0.27     105.4 %  
               
Operating Metrics              
Net revenue margin   17.2 %   17.0 %   23   bps
Total employees   2,651     2,472     7.2 %  
Sales employees and agents   1,761     1,679     4.9 %  
Truckload (TL) revenue %   69.1 %   68.2 %   95   bps
Less than truckload (LTL) revenue %   25.8 %   26.6 %   (83)   bps
Note: Amounts may not foot due to rounding.              
               
 
(1)See the "Non-GAAP Financial Measures" section of this Press Release for the definition and a discussion of each Non-GAAP financial measure.
 

2018 Fourth Quarter and Full Year Guidance

“We expect revenue for the fourth quarter to be between $570 million and $610 million and we are updating our full year 2018 revenue guidance range to $2.425 billion to $2.465 billion, up $20 million at the midpoint,” said Kyle Sauers, Chief Financial Officer at Echo.

Conference Call

A conference call, with accompanying presentation slides, will be broadcast live on October 24, 2018 at 4:00 p.m. Central Time (5:00 p.m. Eastern Time). Doug Waggoner, Chairman of the Board of Directors 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 5077054. The audio replay will be available through October 31, 2018.

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, EBITDA, Adjusted EBITDA and Non-GAAP fully diluted EPS. Net revenue is calculated as revenue less transportation costs. EBITDA is defined as net income excluding the effects of depreciation, amortization, cash and non-cash interest expense and income taxes. Adjusted EBITDA is defined as EBITDA (as previously defined) excluding the effects of acquisition-related transaction costs, changes in contingent consideration and stock compensation expense. 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, 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, EBITDA, Adjusted 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

All statements made in this release, other than statements of historical fact, are or may be deemed to be forward-looking statements. 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. These statements are based on current plans and expectations of Echo Global Logistics and involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be different from any future results, performance or achievements expressed or implied by these statements. Information concerning these risks, uncertainties and other factors is contained under the headings "Risk Factors" and "Forward-Looking Statements" and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2017, and other filings with the SEC.

Echo Global Logistics, Inc.

Condensed Consolidated Statements of Operations

       
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2018   2017   2018   2017
In thousands, except per share data (unaudited)   (unaudited)
Revenue $ 644,821     $ 509,531     $ 1,856,723     $ 1,395,368  
               
Costs and expenses:              
Transportation costs 533,601     422,830     1,538,791     1,152,556  
Selling, general and administrative expenses 85,709     72,284     250,871     209,720  
Depreciation and amortization 9,230     8,124     27,168     24,139  
Income from operations 16,281     6,293     39,893     8,954  
Interest expense, net (3,780 )   (3,675 )   (11,284 )   (10,976 )
Income (Loss) before provision for income taxes 12,501     2,618     28,609     (2,022 )
Income tax (expense) benefit (3,118 )   (226 )   (6,821 )   1,297  
Net income (loss) $ 9,383     $ 2,392     $ 21,788     $ (726 )
               
Basic earnings (loss) per share $ 0.34     $ 0.09     $ 0.79     $ (0.03 )
Diluted earnings (loss) per share $ 0.33     $ 0.09     $ 0.78     $ (0.03 )
Note: Amounts may not foot due to rounding.              
               

Echo Global Logistics, Inc.

Condensed Consolidated Balance Sheets

  September 30, 2018   December 31, 2017
In thousands (unaudited)    
Cash and cash equivalents $ 60,542     $ 23,515  
Accounts receivable, net of allowance for doubtful accounts 385,059     309,733  
Other current assets 13,454     15,053  
Total noncurrent assets 488,345     489,778  
Total assets $ 947,400     $ 838,079  
       
Accounts payable $ 252,483     $ 193,749  
Other current liabilities 52,239     40,579  
Convertible notes, net 216,748     210,919  
Other noncurrent liabilities 34,916     33,960  
Stockholders’ equity 391,014     358,872  
Total liabilities and stockholders’ equity $ 947,400     $ 838,079  
       

Echo Global Logistics, Inc.

Condensed Consolidated Statements of Cash Flows

  Nine Months Ended September 30,
  2018   2017
In thousands (unaudited)
Net cash provided by operating activities $ 63,009     $ 41,215  
Net cash used in investing activities (27,220 )   (14,745 )
Net cash provided by (used in) financing activities 1,239     (21,904 )
Increase in cash and cash equivalents 37,028     4,566  
Cash and cash equivalents, beginning of period 23,515     16,646  
Cash and cash equivalents, end of period $ 60,542     $ 21,213  
Note: Amounts may not foot due to rounding.      
       

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 truckload, partial truckload, LTL, intermodal and expedited. Echo maintains a proprietary, web-based technology platform that compiles and analyzes data from its network of over 40,000 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
VP of Strategy
Echo Global Logistics
312-784-2046

MEDIA RELATIONS:

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

Echo_Logo_Tagline_RGB_FullColor.png

Source: Echo Global Logistics, Inc.

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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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