CHICAGO, IL--(Marketwired - Oct 26, 2016) - 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,
2016.
"Echo posted another strong quarter of market share gains in a softer freight market, as we continued growing volumes and
revenue," said Doug Waggoner, Chairman of the Board of Directors and Chief Executive Officer of Echo. "Softer pricing resulting
from prolonged market weakness contributed to net revenue margin decline, which impacted our profitability. At the same
time, we remain confident in our long-term strategy, as the combination of our new technology platform and integrated
organization makes us excited about our growth prospects ahead."
Third Quarter 2016 Highlights
- Total revenue increased by 2% to $460.2 million from the third quarter of 2015; net revenue(1) decreased by 7%
to $80.9 million from the third quarter of 2015
- Net income decreased 32% to $2.4 million; non-GAAP EBITDA(1) declined 21% to $16.7 million, or declined 10% to
$20.2 million after excluding $3.5 million of Command integration costs from the third quarter of 2015
- Fully diluted EPS decreased to $0.08 in the third quarter of 2016; non-GAAP fully-diluted EPS(1) decreased to
$0.25 in the third quarter of 2016, or decreased to $0.33 after excluding $3.5 million of Command integration costs
- Truckload volume increased by 11% from the third quarter of 2015 and LTL volume increased 6% from the third 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 September 30, |
|
|
|
|
2016 |
2015 |
|
% change |
|
|
(unaudited) |
|
|
|
Transactional revenue |
$ |
373.1 |
|
$ |
375.3 |
|
(0.6 |
)% |
Managed transportation revenue |
|
87.1 |
|
|
74.7 |
|
16.6 |
% |
Revenue |
|
460.2 |
|
|
450.0 |
|
2.3 |
% |
|
|
|
|
|
|
|
|
Transportation costs |
|
379.3 |
|
|
362.6 |
|
4.6 |
% |
Net revenue (1) |
|
80.9 |
|
|
87.4 |
|
(7.5 |
)% |
|
|
|
|
|
|
|
|
Commission expense |
|
23.8 |
|
|
26.5 |
|
(9.9 |
)% |
Change in contingent consideration |
|
0.0 |
|
|
(0.0 |
) |
360.5 |
% |
Acquisition-related transaction costs |
|
-- |
|
|
0.2 |
|
(100.0 |
)% |
Stock compensation expense |
|
2.0 |
|
|
4.7 |
|
(56.5 |
)% |
Other selling, general and administrative |
|
40.3 |
|
|
39.9 |
|
1.0 |
% |
Selling, general and administrative expense |
|
66.3 |
|
|
71.3 |
|
(7.0 |
)% |
|
|
|
|
|
|
|
|
Depreciation |
|
4.6 |
|
|
3.4 |
|
38.1 |
% |
Amortization |
|
3.9 |
|
|
4.1 |
|
(4.4 |
)% |
Depreciation and amortization |
|
8.5 |
|
|
7.4 |
|
14.7 |
% |
|
|
|
|
|
|
|
|
Operating income |
|
6.0 |
|
|
8.6 |
|
(30.0 |
)% |
|
|
|
|
|
|
|
|
Cash interest expense |
|
1.6 |
|
|
1.6 |
|
0.0 |
% |
Non-cash interest expense |
|
1.9 |
|
|
1.8 |
|
8.5 |
% |
Interest and other expense |
|
3.6 |
|
|
3.4 |
|
4.4 |
% |
Income before provision for income taxes |
|
2.5 |
|
|
5.2 |
|
(52.6 |
)% |
Income tax expense |
|
0.1 |
|
|
1.7 |
|
(94.3 |
)% |
Net income |
|
2.4 |
|
|
3.5 |
|
(31.7 |
)% |
|
|
|
|
|
|
|
|
Fully diluted income per share |
$ |
0.08 |
|
$ |
0.11 |
|
(28.7 |
)% |
Diluted shares |
|
29.1 |
|
|
30.3 |
|
|
|
|
|
|
|
|
|
|
|
(1) See the "Reconciliation of Non-GAAP Financial Measures" and " Non-GAAP Financial
Measures" sections of this Press Release. |
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
|
|
|
2016 |
|
2015 |
|
% change |
|
|
Reconciliation of Non-GAAP Financial Measures |
(unaudited) |
|
|
|
|
Total revenue |
$ |
460.2 |
|
$ |
450.0 |
|
2.3 |
% |
|
Transportation costs |
|
379.3 |
|
|
362.6 |
|
4.6 |
% |
|
Net revenue (1) |
$ |
80.9 |
|
$ |
87.4 |
|
(7.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
2.4 |
|
$ |
3.5 |
|
(31.7 |
)% |
|
Change in contingent consideration |
|
0.0 |
|
|
(0.0 |
) |
360.5 |
% |
|
Depreciation |
|
4.6 |
|
|
3.4 |
|
38.1 |
% |
|
Amortization |
|
3.9 |
|
|
4.1 |
|
(4.4 |
)% |
|
Acquisition-related transaction costs |
|
-- |
|
|
0.2 |
|
(100.0 |
)% |
|
Non-cash interest expense |
|
1.9 |
|
|
1.8 |
|
8.5 |
% |
|
Stock compensation expense |
|
2.0 |
|
|
4.7 |
|
(56.5 |
)% |
|
Cash interest expense |
|
1.6 |
|
|
1.6 |
|
0.0 |
% |
|
Income tax expense |
|
0.1 |
|
|
1.7 |
|
(94.3 |
)% |
|
Non-GAAP EBITDA (1) |
$ |
16.7 |
|
$ |
21.0 |
|
(20.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
Fully diluted income per share |
$ |
0.08 |
|
$ |
0.11 |
|
(28.7 |
)% |
|
Change in contingent consideration |
|
0.00 |
|
|
(0.00 |
) |
371.8 |
% |
|
Amortization |
|
0.13 |
|
|
0.14 |
|
(0.3 |
)% |
|
Acquisition-related transaction costs |
|
-- |
|
|
0.01 |
|
(100.0 |
)% |
|
Non-cash interest expense |
|
0.07 |
|
|
0.06 |
|
13.2 |
% |
|
Stock compensation expense |
|
0.07 |
|
|
0.16 |
|
(54.6 |
)% |
|
Tax effect of adjustments |
|
(0.11 |
) |
|
(0.13 |
) |
(17.5 |
)% |
|
Non-GAAP fully diluted EPS (1) |
$ |
0.25 |
|
$ |
0.34 |
|
(25.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
Operating Metrics |
|
|
|
|
|
|
|
|
|
Net revenue margin |
|
17.6 |
% |
|
19.4 |
% |
(185 |
) |
bps |
Total employees |
|
2,382 |
|
|
2,397 |
|
(0.6 |
)% |
|
Sales employees and agents |
|
1,634 |
|
|
1,671 |
|
(2.2 |
)% |
|
Truckload (TL) revenue % |
|
67.8 |
% |
|
67.1 |
% |
68 |
|
bps |
Less than truckload (LTL) revenue % |
|
26.0 |
% |
|
26.5 |
% |
(46 |
) |
bps |
Intermodal revenue % |
|
4.4 |
% |
|
4.8 |
% |
(43 |
) |
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 Fourth Quarter Guidance
"We expect fourth quarter revenue to be between $405 and $425 million, in the middle of our previously guided range," said
Kyle Sauers, Chief Financial Officer at Echo.
Conference Call
A conference call, with accompanying presentation slides, will be broadcast live on October 26, 2016 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 94978638. The
audio replay will be available through November 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, 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, 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, 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 September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
REVENUE |
|
$ |
460,191,903 |
|
|
$ |
449,993,415 |
|
|
$ |
1,309,299,359 |
|
|
$ |
1,105,127,231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation costs |
|
|
379,329,380 |
|
|
|
362,614,918 |
|
|
|
1,062,432,444 |
|
|
|
894,955,721 |
|
Selling, general, and administrative expenses |
|
|
66,292,712 |
|
|
|
71,318,890 |
|
|
|
206,302,091 |
|
|
|
176,796,987 |
|
Depreciation and amortization |
|
|
8,543,002 |
|
|
|
7,448,076 |
|
|
|
23,670,711 |
|
|
|
16,572,233 |
|
INCOME FROM OPERATIONS |
|
|
6,026,809 |
|
|
|
8,611,531 |
|
|
|
16,894,113 |
|
|
|
16,802,290 |
|
INTEREST / OTHER EXPENSE |
|
|
(3,565,093 |
) |
|
|
(3,414,826 |
) |
|
|
(10,592,654 |
) |
|
|
(7,905,436 |
) |
INCOME BEFORE PROVISION FOR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAXES |
|
|
2,461,716 |
|
|
|
5,196,705 |
|
|
|
6,301,459 |
|
|
|
8,896,854 |
|
INCOME TAX EXPENSE |
|
|
(99,666 |
) |
|
|
(1,738,000 |
) |
|
|
(1,746,029 |
) |
|
|
(2,792,000 |
) |
NET INCOME |
|
$ |
2,362,050 |
|
|
$ |
3,458,705 |
|
|
$ |
4,555,430 |
|
|
$ |
6,104,854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per share |
|
$ |
0.08 |
|
|
$ |
0.12 |
|
|
$ |
0.16 |
|
|
$ |
0.23 |
|
Diluted net income per share |
|
$ |
0.08 |
|
|
$ |
0.11 |
|
|
$ |
0.15 |
|
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Echo Global Logistics, Inc. |
Condensed Consolidated Balance Sheets |
|
|
September 30, |
|
December 31, |
|
2016 |
|
2015 |
|
(unaudited) |
|
|
|
Cash and cash equivalents |
$ |
34,210,795 |
|
$ |
56,522,194 |
|
Accounts receivable, net of allowance for doubtful accounts |
|
245,924,827 |
|
|
196,420,614 |
|
Other current assets |
|
11,796,269 |
|
|
7,881,156 |
|
Total noncurrent assets |
|
497,863,964 |
|
|
485,685,818 |
Total assets |
$ |
789,795,855 |
|
$ |
746,509,782 |
|
|
|
|
|
|
|
Accounts payable |
$ |
145,682,069 |
|
$ |
103,985,783 |
|
Other current liabilities |
|
35,956,994 |
|
|
33,406,353 |
|
Convertible notes, net |
|
201,796,741 |
|
|
196,659,354 |
|
Other noncurrent liabilities |
|
35,238,348 |
|
|
17,208,718 |
|
Stockholders' equity |
|
371,121,703 |
|
|
395,249,574 |
Total liabilities and stockholders' equity |
$ |
789,795,855 |
|
$ |
746,509,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Echo Global Logistics, Inc. |
|
Condensed Consolidated Statements of Cash Flows |
|
|
|
|
Nine Months Ended September 30, |
|
|
2016 |
|
|
2015 |
|
|
(unaudited) |
|
Net cash provided by operating activities |
$ |
55,111,562 |
|
|
$ |
52,796,523 |
|
Net cash used in investing activities |
|
(37,248,736 |
) |
|
|
(400,544,885 |
) |
Net cash (used in) provided by financing activities |
|
(40,174,225 |
) |
|
|
357,993,883 |
|
(Decrease) Increase in cash and cash equivalents |
|
(22,311,399 |
) |
|
|
10,245,521 |
|
Cash and cash equivalents, beginning of period |
|
56,522,194 |
|
|
|
32,542,119 |
|
Cash and cash equivalents, end of period |
$ |
34,210,795 |
|
|
$ |
42,787,640 |
|
|
|
|
|
|
|
|
|
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