October 25, 2012

Echo Global Logistics Announces Third Quarter 2012 Results

CHICAGO, IL -- (Marketwire) -- 10/25/12 -- 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 ended September 30, 2012.

Echo reported Non-GAAP net income of $3.8 million and Non-GAAP fully diluted EPS of $0.17 per share. Excluded from these results are the effects of changes in contingent consideration payable.

"Echo posted another strong quarter in terms of its revenue growth, achieving record revenue of over $192 million, which is an increase of more than 21% from the third quarter of 2011," said Doug Waggoner, Chief Executive Officer of Echo. Waggoner added, "This strong growth has been achieved in spite of a softer than anticipated overall freight environment, and was again driven by the investments we are making in our business."

Third Quarter Highlights

  • Total revenue was $192.7 million, an increase of 21.3% from the third quarter of 2011.
  • Non-GAAP operating income totaled $6.3 million, an increase of 18.8% from the third quarter of 2011.*
  • Non-GAAP operating margin was 17.3%, down 11 bps from the third quarter of 2011.*
  • Non-GAAP net income increased 15.7% from the third quarter of 2011 to $3.8 million.*
  • Non-GAAP fully diluted EPS increased 14.1% from the third quarter of 2011 to 17 cents per share.*

* All non-GAAP measures exclude the effects of changes in contingent consideration payable. 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:






Amounts in 000,000s, except per        Three months ended

 share data                               September 30,

                                        2012        2011      % change

                                           (unaudited)

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

Revenue

  Transactional                      $    132.5  $    108.4        22.3%

  Enterprise                         $     60.2  $     50.6        19.0%

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

    Total revenue                         192.7       159.0        21.3%



Net revenue                                36.6        30.6        19.5%



Operating expenses

  Commissions                              10.4         9.3        11.7%

  Selling, general and

   administrative                          17.6        13.8        27.3%

  Depreciation and amortization             2.3         2.2         5.5%

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

    Total operating expenses (1)           30.3        25.3        19.7%



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

Non-GAAP Operating income (1)               6.3         5.3        18.8%

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



Other expense                               0.1         0.1        51.8%

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

Non-GAAP Income before taxes (1)            6.2         5.2        18.3%

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



Income taxes (1)                            2.4         1.9        22.5%



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

Non-GAAP Net income (2)                     3.8         3.3        15.7%

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



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

Non-GAAP EPS (2)                     $     0.17  $     0.15        14.1%

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

Diluted shares                             22.9        22.6



Reconciliation to GAAP Operating

 Income, Operating Margin, Net

 Income and EPS

Non-GAAP Operating income (1)               6.3         5.3        18.8%

  Change in contingent consideration

   payable                                 (0.0)        0.1       -98.1%

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

Operating income                            6.3         5.4        15.9%

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



Non-GAAP Operating margin (1)              17.3%       17.4%        (11) bps

  Effect of change in contingent

   consideration payable                    0.0%        0.4%        (42) bps

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

Operating margin (% of Net revenue)        17.3%       17.8%        (53) bps

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



Non-GAAP Net income (2)                     3.8         3.3        15.7%

  Change in contingent consideration

   payable, net of tax effect              (0.0)        0.1      -101.9%

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

Net Income                                  3.8         3.4        12.9%

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



Non-GAAP Fully diluted EPS (2)       $     0.17  $     0.15        14.1%

  Change in contingent consideration

   payable, net of tax effect             (0.00)       0.00      -101.8%

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

Fully diluted EPS                    $     0.17  $     0.15        11.3%

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



Operating Metrics

  Net revenue margin                       19.0%       19.3%        (28) bps

  Operating margin (% of net

   revenue) (1)                            17.3%       17.4%        (11) bps



  Shipment volume                       427,147     355,972        20.0%

  Number of enterprise clients              197         169        16.6%

  Total employees                         1,286       1,180         9.0%

  Salaried employees                        440         380        15.8%

  Commissioned sales employees              595         545         9.2%

  Sales agents                              251         255        -1.6%

  Less Than Truckload (LTL) Revenue

   %                                       45.7%       46.8%       (113) bps

  Truckload (TL) Revenue %                 44.7%       44.7%         (5) bps





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

    payable.

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

    consideration payable.



"Our third quarter results were largely driven by the organic growth in our business, as our enterprise revenue increased by 19% and our revenue per transactional sales representative also increased by over 15%," said Dave Menzel, Chief Financial Officer of Echo. He added, "The commitment to our long term strategy, of investing in our people and technology, has flattened operating margins in the current quarter, but we anticipate further expansion in 2013 as our business continues to scale."

Business Outlook

Waggoner stated, "Based on the current operating environment as well as the anticipated growth that will result in the fourth quarter from our recent acquisition of Sharp Freight Systems, we anticipate our fourth quarter revenue to be in the range of $200 to $215 million and fully diluted EPS, excluding the tax effected changes in contingent consideration payable, to be in the range of $0.16 to $0.18." This EPS estimate includes approximately $0.02 to $0.03 related to deal and integration costs associated with our acquisition of Sharp.

Conference Call

A conference call, with accompanying presentation slides, will be broadcast live on Thursday, October 25, 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 "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. 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        Nine Months Ended

                              September 30,             September 30,

                            2012         2011         2012         2011

                               (Unaudited)               (Unaudited)

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

REVENUE                 $192,737,761 $158,956,001 $546,537,567 $439,906,043



COSTS AND EXPENSES

  Transportation costs   156,145,239  128,336,597  442,475,163  354,474,127

  Selling, general, and

   administrative

   expenses               27,977,727   22,994,195   80,324,572   65,540,057

  Depreciation and

   amortization            2,294,608    2,174,371    6,510,261    6,152,762

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

INCOME FROM OPERATIONS     6,320,187    5,450,838   17,227,571   13,739,097

OTHER EXPENSE               (121,857)     (80,273)    (359,831)    (219,291)

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

INCOME BEFORE PROVISION

 FOR INCOME TAXES          6,198,330    5,370,565   16,867,740   13,519,806

INCOME TAX EXPENSE        (2,381,394)  (1,991,064)  (6,336,180)  (5,003,592)

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

NET INCOME              $  3,816,936 $  3,379,501 $ 10,531,560 $  8,516,214

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



Basic net income per

 share                  $       0.17 $       0.15 $       0.47 $       0.38

Diluted net income per

 share                  $       0.17 $       0.15 $       0.46 $       0.38







                         Echo Global Logistics, Inc.

                    Condensed Consolidated Balance Sheets



                                                September 30,  December 31,

                                                    2012           2011

                                                 (Unaudited)

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

  Cash and cash equivalents                    $   48,167,633 $   47,007,309

  Accounts receivable, net of allowance for

   doubtful accounts                              100,442,704     89,191,456

  Prepaid expenses                                  2,465,107      4,634,612

  Other current assets                                139,419        800,648

  Total long term assets                           63,189,069     58,864,061

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

Total assets                                   $  214,403,932 $  200,498,086

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



  Accounts payable - trade                     $   60,331,993 $   59,949,927

  Current maturities of capital lease

   obligations                                         43,398        175,166

  Other liabilites                                 12,026,484     10,474,434

  Deferred income taxes                             2,613,046      2,979,483

  Long term liabilities                             5,808,848      7,597,478

  Stockholders' equity                            133,580,163    119,321,598

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

Total liabilities and stockholders' equity     $  214,403,932 $  200,498,086

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







                        Echo Global Logistics, Inc.

              Condensed Consolidated Statements of Cash Flows



                                                    Nine Months Ended

                                                       September 30,

                                                    2012           2011

                                                (Unaudited)    (Unaudited)

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

Net cash provided by operating activities      $  13,045,704  $   8,944,787



Net cash used in investing activities            (10,435,299)    (7,717,889)



Net cash provided by (used in) financing

 activities                                       (1,450,081)      (254,679)

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



Increase/(decrease) in cash and cash

 equivalents                                       1,160,324        972,219

Cash and cash equivalents, beginning of period    47,007,309     43,218,164

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

Cash and cash equivalents, end of period       $  48,167,633  $  44,190,383

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





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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