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Echo Global Logistics Announces Third Quarter 2012 Results

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. 
INVESTOR RELATIONS CONTACT:
Suzanne Karpick
Echo Global Logistics
(312) 784-7414 
MEDIA CONTACT:
Hanni Itah
SSPR
(847) 415-9324