February 14, 2012

Echo Global Logistics Announces Fourth Quarter and Full Year 2011 Results

CHICAGO, Feb. 14, 2012 (GLOBE NEWSWIRE) -- 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, 2011.

"I'm very pleased with the results Echo delivered in 2011," said Doug Waggoner, Chief Executive Officer of Echo. Waggoner added, "Echo posted another quarter and full year of steadily increasing revenues and improved profitability. Our consistent and reliable execution of our strategy is working to bring about sustainable long term growth."

Fourth Quarter Highlights

  • Total revenue increased by 43.1% in the fourth quarter of 2011 to $162.9 million compared with $113.8 million in the fourth quarter of 2010.
  • Non-GAAP operating income increased by 60.8% in the fourth quarter of 2011 to $5.2 million compared with $3.2 million in the fourth quarter of 2010.*
  • Non-GAAP operating margin increased by 205 basis points to 16.3% in the fourth quarter of 2011 from 14.3% in the fourth quarter of 2010.*
  • Non-GAAP net income increased by 68.5% in the fourth quarter of 2011 to $3.5 million compared with $2.1 million in the fourth quarter of 2010.*

Full Year Highlights

  • Total revenue increased by 41.4% in 2011 to $602.8 million compared with $426.4 million in 2010.
  • Non-GAAP operating income increased by 113.2% in 2011 to $18.7 million compared with $8.8 million in 2010.*
  • Non-GAAP operating margin increased by 515 basis points to 15.9% in 2011 from 10.8% in 2010.*
  • Non-GAAP net income increased by 118.4% in 2011 to $11.9 million compared with $5.4 million in 2010.*

* All non-GAAP measures exclude the effects of changes in contingent consideration payable. For a reconciliation of these non-GAAP financial measures to the nearest comparable GAAP measure, see "Reconciliation to GAAP Operating Income, Operating Margin, Net Income and EPS" included in this release.

Summarized financial results and select operating metrics follow:

         
  Three months ended December 31,   Years ended December 31,  
  2010 2011 change   2010 2011 change  
Amounts in 000,000s, except per share data (unaudited)       (unaudited)    
Revenue:                
Transactional  $ 73.2  $ 110.5 50.9%    $ 260.9  $ 409.0 56.8%  
Enterprise  40.6  $ 52.4 29.0%    165.3  $ 193.8 17.1%  
Total Revenue  113.8  162.9 43.1%    426.4  602.8 41.4%  
                 
Net revenue  22.6  31.8 40.6%    81.2  117.2 44.4%  
                 
Operating expenses                
Commissions  6.8  9.9 45.2%    24.9  35.9 44.2%  
Selling, general and administrative  10.7  14.5 35.8%    40.6  54.3 33.8%  
Depreciation and amortization  1.9  2.2 16.8%    6.9  8.3 20.3%  
Total operating expenses (1)  19.4  26.6 37.2%    72.4  98.5 36.1%  
                 
Non-GAAP Operating income (1)  3.2  5.2 60.8%    8.8  18.7 113.2%  
                 
Other expense  0.1  0.1 -46.5%    0.3  0.3 -6.0%  
Non-GAAP Income before taxes (1)  3.1  5.1 64.2%    8.5  18.4 117.3%  
                 
Income taxes (1)  1.0  1.6 55.7%    3.0  6.5 115.5%  
                 
Non-GAAP net income (1)  $ 2.1  $ 3.5 68.5%    $ 5.4  $ 11.9 118.4%  
                 
Non-GAAP EPS (1)  $ 0.09  $ 0.16 66.2%    $ 0.24  $ 0.53 115.1%  
Diluted shares  22.3  22.6 1.3%          
                 
Reconciliation to GAAP Operating Income, Operating Margin, Net Income and EPS            
Non-GAAP Operating Income (1)  $ 3.2  $ 5.2 60.8%    $ 8.8  $ 18.7 113.2%  
Change in contingent consideration payable  0.9  (0.0) -100.0%    4.7  0.2 -94.7%  
Operating Income  4.1  5.2 29.9%    13.5  18.9 40.7%  
                 
Non-GAAP Operating Margin (1) 14.3% 16.3%  205 bps 10.8% 15.9%  515 bps
Effect of change in contingent consideration payable 3.6% 0.0%     5.8% 0.3%    
Operating Margin 17.9% 16.3% (160)  bps 16.6% 16.2% (40)  bps
                 
Non-GAAP Net Income (1)  2.1  3.5 68.5%    5.4  11.9 118.4%  
Change in contingent consideration payable, net of tax effect  0.5  (0.0) NA    3.0  0.1 NA  
Net Income  $ 2.6  $ 3.5 33.4%    $ 8.4  $ 12.0 43.3%  
                 
EPS  $ 0.12  $ 0.16 31.6%    $ 0.38  $ 0.53 41.2%  
                 
Operating Metrics                
Net revenue margin 19.9% 19.5%  (34) bps 19.0% 19.4%  41 bps
Operating margin (% of net revenue) (1) 14.3% 16.3%  205 bps 10.8% 15.9%  515 bps
                 
Shipment volume 274,757 354,595 29.1%   1,034,690 1,376,006 33.0%  
Number of enterprise clients 148 177 19.6%   148 177 19.6%  
Total employees 929 1,157 24.5%   929 1,157 24.5%  
Salaried employees 327 400 22.3%   327 400 22.3%  
Commissioned sales employees 397 513 29.2%   397 513 29.2%  
Sales agents 205 244 19.0%   205 244 19.0%  
Less Than Truckload (LTL) Revenue % 46.5% 45.7%  (81) bps 45.1% 47.5%  245 bps
Truckload (TL) Revenue % 44.1% 44.3%  23 bps 44.8% 43.6%  (119) bps
(1) Amounts shown exclude the effects of changes in contingent consideration payable.

"We are pleased with our growth in gross revenues and profitability while we continue to build our sales organization and operating platform," said Dave Menzel, Chief Financial Officer of Echo. "The investments we are making will further leverage our existing resources and allow us to capture a larger share of wallet from our target market of small and middle market businesses."

Business Outlook

"We remain committed to our five-year financial goals which are benchmarked against our 2010 financial results. These goals are: annual total revenue in the range of $1.3 to $1.5 billion; operating margins of 30%-35%; and, 50% compound annual growth in earnings," stated Waggoner. He added, "The investments we make during 2012 will drive our ability to reach these objectives, as we continue on our path toward becoming the leading provider of transportation management solutions for small and middle market companies, by delivering technology that drives efficiency, capacity and insight to both shippers and carriers." 

Conference Call

A conference call, with accompanying presentation slides, will be broadcast live on Tuesday, February 14, 2012, 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 42202209. 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 EPS. We refer to Non-GAAP Operating Income, Non-GAAP Operating Margin, Non-GAAP Net Income and Non-GAAP EPS to describe earnings and earnings per share excluding the effects of changes in contingent consideration payable. We believe that Non-GAAP Operating Income, Non-GAAP Operating Margin, Non-GAAP Net Income and Non-GAAP EPS provide useful information to investors because they provide information about the estimated financial performance of the Company's ongoing business.

Non-GAAP Operating Income, Non-GAAP Operating Margin, Non-GAAP Net Income and Non-GAAP 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 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 these non-GAAP financial measures to the nearest comparable GAAP measures, see "Reconciliation to GAAP Operating Income, Operating Margin, Net Income and 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 December 31,   Years Ended December 31,
  2010 2011   2010 2011
  (unaudited)     (unaudited)
REVENUE  $ 113,832,095  $ 162,857,428    $ 426,373,975  $ 602,763,471
           
COSTS AND EXPENSES:          
Transportation costs   91,226,411  131,072,715    345,208,575  485,546,842
Selling, general, and administrative expenses   16,686,235  24,412,069    60,778,106  89,952,126
Depreciation and amortization   1,864,394  2,177,074    6,926,118  8,329,836
INCOME FROM OPERATIONS  4,055,055  5,195,570    13,461,176  18,934,667
OTHER EXPENSE  (101,887)  (53,885)    (291,375)  (273,176)
INCOME BEFORE PROVISION FOR INCOME TAXES  3,953,168  5,141,685    13,169,801  18,661,491
INCOME TAX EXPENSE  (1,305,689)  (1,609,727)    (4,765,163)  (6,613,319)
NET INCOME  $ 2,647,479  $ 3,531,958    $ 8,404,638  $ 12,048,172
           
Basic net income per share   $ 0.12  $ 0.16    $ 0.38  $ 0.54
Diluted net income per share   $ 0.12  $ 0.16    $ 0.38  $ 0.53
     
     
Echo Global Logistics, Inc.
Condensed Consolidated Balance Sheets
     
     
  December 31, December 31,
  2010 2011
    (unaudited)
Cash and cash equivalents  $ 43,218,164  $ 47,007,309
Accounts receivable, net of allowance for doubtful accounts  60,316,454  89,191,456
Prepaid expenses   8,063,892  4,634,612
Other current assets  396,613  800,648
 Total long term assets  49,553,058  58,864,061
Total assets   $ 161,548,181  $ 200,498,086
     
Accounts payable — trade   $ 40,097,083  $ 59,949,927
Current maturities of capital lease obligations   274,282  175,166
Other liabilites  6,244,248  10,474,434
Deferred income taxes   2,734,894  2,979,483
 Long term liabilities  7,219,661  7,597,478
 Stockholders' equity  104,978,013  119,321,598
Total liabilities and stockholders' equity  $ 161,548,181  $ 200,498,086
     
     
Echo Global Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
     
   
  Years Ended December 31,
  2010 2011
    (unaudited)
Net cash provided by operating activities   $ 8,642,339  $ 15,749,580
     
Net cash used in investing activities   (14,838,026)  (11,344,927)
     
Net cash provided by (used in) financing activities   1,610,147  (615,508)
     
(Decrease) increase in cash and cash equivalents   (4,585,540)  3,789,145
Cash and cash equivalents, beginning of period  47,803,704  43,218,164
Cash and cash equivalents, end of period  $ 43,218,164  $ 47,007,309

About Echo Global Logistics

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

The Echo Global Logistics, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5293

CONTACT: INVESTOR RELATIONS CONTACT:

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



         MEDIA CONTACT:

         Hanni Itah, SSPR, (847) 415 - 9324

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Source: Echo Global Logistics, Inc.

 

 

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