Echo Global Logistics
Echo Global Logistics, Inc. (Form: 8-K, Received: 04/26/2017 16:12:31)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): April 26, 2017

 

ECHO GLOBAL LOGISTICS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware
(State or other jurisdiction
of incorporation)

 

001-34470
(Commission
File Number)

 

20-5001120
(I.R.S. Employer
Identification No.)

 

600 West Chicago Avenue
Suite 725
Chicago, Illinois
(Address of principal executive offices)

 

60654
(Zip Code)

 

(800) 354-7993

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

o Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act (17 CFR 240.12b-2)

 

o Indicate by check mark if the registrant has elected not to use the extended transition period for complying with new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act (17 CFR 240.13(a)-1)

 

 

 



 

Item 2.02 Results of Operations and Financial Condition.*

 

On April 26, 2017, Echo Global Logistics, Inc. issued a press release announcing financial results for its fiscal quarter ended March 31, 2017. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)                                  Exhibits:

 

Exhibit No.

 

Description

 

 

 

99.1*

 

Press Release dated April 26, 2017.

 


*The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

2



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

ECHO GLOBAL LOGISTICS, INC.

 

 

 

Dated: April 26, 2017

By

/s/ Kyle Sauers

 

Name:

Kyle Sauers

 

Title:

Chief Financial Officer

 

3



 

Exhibit Index

 

Exhibit No.

 

Description

 

 

 

99.1*

 

Press Release dated April 26, 2017.

 


*The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

4


Exhibit 99.1

 

 

April 26, 2017

 

Echo Global Logistics Reports Record First Quarter Revenue; Up 3% Year over Year

 

CHICAGO, IL — (Marketwired) — 04/26/2017 — Echo Global Logistics, Inc. (NASDAQ: ECHO), a leading provider of technology-enabled transportation management services, today reported financial results for the quarter ended March 31, 2017.

 

“Our record first quarter revenue was led by strong growth in our Managed Transportation business. We signed another $56 million of new contracts during the quarter,” said Doug Waggoner, Chairman of the Board of Directors and Chief Executive Officer of Echo. “Many of these wins are a strong reflection of the combined benefits of our integration with Command. We have now achieved more than $70 million of our revenue synergy goal through additional modes and offerings to the Command client base.”

 

First Quarter 2017 Highlights

 

·                   Total revenue increased by 3% to $415.8 million from the first quarter of 2016; net revenue (1)  was $74.5 million in the first quarter of 2017, compared to $80.8 million in the first quarter of 2016

 

·                   Net loss was $2.9 million in the first quarter of 2017, compared to net income of $0.3 million in the first quarter of 2016; non-GAAP EBITDA (1)  was $10.0 million in the first quarter of 2017, compared to $16.5 million in the first quarter of 2016

 

·                   Fully diluted loss per share was $0.10 in the first quarter of 2017, compared to fully diluted EPS of $0.01 in the first quarter of 2016; non-GAAP fully diluted EPS (1)  decreased to $0.09 in the first quarter of 2017, compared to $0.24 in the first quarter of 2016

 

·                   Less-than-truckload (“LTL”) volume increased 4.2% and Truckload (“TL”) (includes Partial TL) volume increased 0.5% from the first quarter of 2016

 


(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:

 

 

 

Three months ended March 31,

 

 

 

Dollars in millions, except per share data

 

2017

 

2016

 

% change

 

 

 

(unaudited)

 

 

 

Transactional revenue

 

$

333.0

 

$

332.0

 

0.3

    %

Managed transportation revenue

 

82.8

 

73.3

 

13.0

    %

Revenue

 

415.8

 

405.3

 

2.6

    %

 

 

 

 

 

 

 

 

Transportation costs

 

341.3

 

324.5

 

5.2

    %

Net revenue (1)

 

74.5

 

80.8

 

(7.8

)%

 

 

 

 

 

 

 

 

Commission expense

 

22.4

 

24.8

 

(9.9

)%

Change in contingent consideration

 

0.1

 

(0.2

)

160.0

    %

Stock compensation expense

 

2.7

 

5.3

 

(50.1

)%

Other selling, general and administrative

 

42.1

 

39.5

 

6.7

    %

Selling, general and administrative expense

 

67.2

 

69.5

 

(3.2

)%

 

 

 

 

 

 

 

 

Depreciation

 

4.5

 

3.5

 

26.4

    %

Amortization

 

3.6

 

4.0

 

(10.6

)%

Depreciation and amortization

 

8.0

 

7.5

 

6.8

    %

 

 

 

 

 

 

 

 

(Loss) Income from operations

 

(0.8

)

3.8

 

(120.3

)%

 

 

 

 

 

 

 

 

Cash interest expense

 

1.7

 

1.6

 

0.6

    %

Non-cash interest expense

 

2.0

 

1.9

 

5.9

    %

Interest expense

 

3.6

 

3.5

 

3.4

    %

(Loss) Income before provision for income taxes

 

(4.4

)

0.3

 

(1,485.9

)%

Income tax (benefit) expense

 

(1.5

)

0.1

 

(2,881.4

)%

Net (loss) income

 

(2.9

)

0.3

 

(1,193.6

)%

 

 

 

 

 

 

 

 

Fully diluted (loss) earnings per share

 

$

(0.10

)

$

0.01

 

(1,258.2

)%

Diluted shares (1)(2)

 

28.2

 

29.8

 

 

 

 


(1) See the “Reconciliation of Non-GAAP Financial Measures” and “Non-GAAP Financial Measures” sections of this Press Release.

 

(2) For the three months ended March 31, 2017, 423,796 incremental shares related to stock-based awards were not included in the computation of diluted loss per share because of the net loss during the period. Diluted shares used in the reconciliation of non-GAAP fully diluted EPS was 28,579,093.

 



 

Reconciliation of Non-GAAP Financial Measures

 

Three months ended March 31,

 

 

 

 

Dollars in millions, except per share data

 

2017

 

2016

 

% change

 

 

 

 

(unaudited)

 

 

 

 

Total revenue

 

$

415.8

 

$

405.3

 

2.6

    %

 

Transportation costs

 

341.3

 

324.5

 

5.2

    %

 

Net revenue (1)

 

$

74.5

 

$

80.8

 

(7.8

)%

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(2.9

)

$

0.3

 

(1,193.6

)%

 

Change in contingent consideration

 

0.1

 

(0.2

)

160.0

    %

 

Depreciation

 

4.5

 

3.5

 

26.4

    %

 

Amortization

 

3.6

 

4.0

 

(10.6

)%

 

Non-cash interest expense

 

2.0

 

1.9

 

5.9

    %

 

Stock compensation expense

 

2.7

 

5.3

 

(50.1

)%

 

Cash interest expense

 

1.7

 

1.6

 

0.6

    %

 

Income tax (benefit) expense

 

(1.5

)

0.1

 

(2,881.4

)%

 

Non-GAAP EBITDA (1)

 

$

10.0

 

$

16.5

 

(39.4

)%

 

 

 

 

 

 

 

 

 

 

Fully diluted (loss) earnings per share

 

$

(0.10

)

$

0.01

 

(1,258.2

)%

 

Change in contingent consideration

 

0.00

 

(0.01

)

162.6

    %

 

Amortization

 

0.13

 

0.13

 

(6.7

)%

 

Non-cash interest expense

 

0.07

 

0.06

 

10.5

    %

 

Stock compensation expense

 

0.09

 

0.18

 

(47.9

)%

 

Tax effect of adjustments

 

(0.10

)

(0.13

)

28.1

    %

 

Non-GAAP fully diluted EPS (1)

 

$

0.09

 

$

0.24

 

(62.5

)%

 

 

 

 

 

 

 

 

 

 

Operating Metrics

 

 

 

 

 

 

 

 

Net revenue margin

 

17.9

%

19.9

%

(202

)

bps

Total employees

 

2,415

 

2,371

 

1.9

    %

 

Sales employees and agents

 

1,643

 

1,651

 

(0.5

)%

 

Truckload (TL) revenue %

 

67.4

%

67.8

%

(32

)

bps

Less than truckload (LTL) revenue %

 

27.4

%

26.1

%

129

 

bps

Intermodal revenue %

 

3.7

%

4.4

%

(67

)

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.

 

2017 Full Year Guidance

 

“We expect total revenue for the second quarter of 2017 to be between $455 million and $485 million and also reiterate our full year 2017 total revenue guidance of $1.85 billion to $1.97 billion,” said Kyle Sauers, Chief Financial Officer of Echo.

 



 

Conference Call

 

A conference call, with accompanying presentation slides, will be broadcast live on April 26, 2017 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 6285901. The audio replay will be available through May 3, 2017.

 

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 (loss) income excluding the effects of changes in contingent consideration, depreciation, amortization, stock compensation expense, cash and non-cash interest expense and income taxes. Non-GAAP Fully Diluted EPS is defined as fully diluted EPS excluding changes in contingent consideration, amortization, 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, 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, 2016.

 



 

Echo Global Logistics, Inc.

Condensed Consolidated Statements of Operations

 

 

 

Three Months Ended March 31,

 

 

 

2017

 

2016

 

 

 

(unaudited)

 

Revenue

 

$

415,752,274

 

$

405,277,532

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Transportation costs

 

341,254,013

 

324,450,717

 

Selling, general and administrative expenses

 

67,237,322

 

69,476,488

 

Depreciation and amortization

 

8,038,259

 

7,529,333

 

(Loss) Income from operations

 

(777,320

)

3,820,994

 

Interest expense

 

(3,624,136

)

(3,503,395

)

(Loss) Income before provision for income taxes

 

(4,401,456

)

317,599

 

Income tax benefit (expense)

 

1,529,413

 

(54,988

)

Net (loss) income

 

$

(2,872,043

)

$

262,611

 

 

 

 

 

 

 

Basic (loss) earnings per share

 

$

(0.10

)

$

0.01

 

Diluted (loss) earnings per share

 

$

(0.10

)

$

0.01

 

 

Echo Global Logistics, Inc.

Condensed Consolidated Balance Sheets

 

 

 

March 31,
2017

 

December 31,
2016

 

 

 

(unaudited)

 

 

 

Cash and cash equivalents

 

$

24,255,299

 

$

16,646,089

 

Accounts receivable, net of allowance for doubtful accounts

 

232,675,128

 

231,430,645

 

Other current assets

 

21,931,400

 

20,224,140

 

Total noncurrent assets

 

495,420,461

 

498,467,042

 

Total assets

 

$

774,282,288

 

$

766,767,916

 

 

 

 

 

 

 

Accounts payable

 

$

147,062,830

 

$

135,386,424

 

Other current liabilities

 

27,929,976

 

32,554,271

 

Convertible notes, net

 

205,359,414

 

203,564,011

 

Other noncurrent liabilities

 

38,078,500

 

37,113,480

 

Stockholders’ equity

 

355,851,568

 

358,149,730

 

Total liabilities and stockholders’ equity

 

$

774,282,288

 

$

766,767,916

 

 



 

Echo Global Logistics, Inc.

Condensed Consolidated Statements of Cash Flows

 

 

 

Three Months Ended March 31,

 

 

 

2017

 

2016

 

 

 

(unaudited)

 

Net cash provided by operating activities

 

$

14,110,158

 

$

14,349,978

 

Net cash used in investing activities

 

(4,044,500

)

(4,311,663

)

Net cash used in financing activities

 

(2,456,448

)

(23,041,832

)

Increase (Decrease) in cash and cash equivalents

 

7,609,210

 

(13,003,517

)

Cash and cash equivalents, beginning of period

 

16,646,089

 

56,522,194

 

Cash and cash equivalents, end of period

 

$

24,255,299

 

$

43,518,677

 

 

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 Finance

Echo Global Logistics

312-784-2046

 

MEDIA RELATIONS:

Christopher Clemmensen

SVP of Marketing

Echo Global Logistics

312-784-2132