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Echo Global Logistics Announces First Quarter 2013 Results


Echo Global Logistics Announces First Quarter 2013 Results

CHICAGO, IL -- (Marketwired) -- 04/25/13 -- 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 March 31, 2013.

Echo reported total revenue of $204 million, non-GAAP net income of $3.5 million and non-GAAP fully diluted EPS of $0.15 per share in the first quarter of 2013.

"Echo posted double digit year over year increases in revenue and non-GAAP net income for the quarter," commented Doug Waggoner, Chief Executive Officer of Echo. Waggoner added, "Our consistent growth indicates that the investments we are making are driving our success in the marketplace."

First Quarter Highlights


 
--  Total revenue increased 21.0% to $204 million from the first quarter
    of 2012.
--  Non-GAAP operating income increased 11.5% to $5.6 million from the
    first quarter of 2012.*
--  Non-GAAP operating margin was 14.6%, down 81 bps from the first
    quarter of 2012.*
--  Non-GAAP net income increased 11.2% to $3.5 million from the first
    quarter of 2012.*
--  Non-GAAP fully diluted EPS increased 9.0% to $0.15 from the first
    quarter of 2012.*

*All non-GAAP financial measures exclude the effects of changes in contingent consideration payable. For a reconciliation of each non-GAAP financial measure to the nearest comparable GAAP financial 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:


 
                                                                            
                                         --------------------  --------     
                                          Three months ended                
                                               March 31,                    
                                            2013       2012     Change      
Amounts in 000,000s, except per share                                       
 data                                         (unaudited)                   
---------------------------------------- --------------------  --------     
Revenue                                                                     
 Transactional                           $   143.1  $   115.9      23.5%    
 Enterprise                              $    60.9  $    52.7      15.5%    
                                         ---------  ---------  --------     
  Total Revenue                              204.0      168.6      21.0%    
                                                                            
Net revenue                                   38.5       32.7      17.7%    
                                                                            
Operating expenses                                                          
 Commissions                                   9.9        9.5       5.1%    
 Selling, general and administrative          20.4       16.2      25.8%    
 Depreciation and amortization                 2.6        2.0      27.9%    
                                         ---------  ---------  --------     
  Total operating expenses (1)                32.9       27.7      18.8%    
                                                                            
                                         ---------  ---------  --------     
Non-GAAP Operating Income (1)                  5.6        5.0      11.5%    
                                         ---------  ---------  --------     
                                                                            
Other expense                                  0.1        0.1     -14.1%    
                                         ---------  ---------  --------     
Non-GAAP Income before taxes (1)               5.5        4.9      12.1%    
                                         ---------  ---------  --------     
                                                                            
Income taxes (1)                               2.0        1.8      13.6%    
                                                                            
                                         ---------  ---------  --------     
Non-GAAP Net Income (2)                        3.5        3.1      11.2%    
                                         =========  =========  ========     
                                                                            
                                         ---------  ---------  --------     
Non-GAAP Fully Diluted EPS (2)           $    0.15  $    0.14       9.0%    
                                         =========  =========  ========     
Diluted shares                                23.2       22.8               
                                                                            
----------------------------------------------------------------------------
Reconciliation to GAAP Operating Income, Operating                          
 Margin, Net income and Fully Diluted EPS                                   
----------------------------------------------------------------------------
Non-GAAP Operating Income(1)                   5.6        5.0      11.5%    
 Change in contingent consideration                                         
  payable                                     (0.8)       0.3    -331.6%    
                                         ---------  ---------  --------     
Operating Income                               4.8        5.3      -9.5%    
                                         ---------  ---------  --------     
                                                                            
Non-GAAP Operating Margin (1)                 14.6%      15.4%      (81) bps
 Effect of change in contingent                                             
  consideration payable                       -2.0%       1.0%     (298) bps
                                         ---------  ---------  --------     
Operating Margin (% of Net Revenue)           12.6%      16.4%     (379) bps
                                         ---------  ---------  --------     
                                                                            
Non-GAAP Net Income (2)                        3.5        3.1      11.2%    
 Change in contingent consideration                                         
  payable, net of tax effect                  (0.5)       0.2    -329.7%    
                                         ---------  ---------  --------     
Net Income                                     3.0        3.3     -10.1%    
                                         =========  =========  ========     
                                                                            
Non-GAAP Fully Diluted EPS(2)            $    0.15  $    0.14       9.0%    
 Change in contingent consideration                                         
  payable, net of tax effect                 (0.02)      0.01    -325.2%    
                                         ---------  ---------  --------     
Fully diluted EPS                        $    0.13  $    0.15     -11.9%    
                                         =========  =========  ========     
                                                                            
----------------------------------------------------------------------------
Operating Metrics                                     
                      
----------------------------------------------------------------------------
 Net revenue margin                           18.9%      19.4%      (53) bps
 Operating margin (% of net revenue) (1)      14.6%      15.4%      (81) bps
 Shipment volume                           432,902    383,838      12.8%    
 Total employees                             1,321      1,154      14.5%    
 Sales employees and agents                    847        748      13.2%    
 Less Than Truckload (LTL) Revenue %          42.4%      46.3%     (384) bps
 Truckload (TL) Revenue %                     43.2%      42.9%       35  bps
 Intermodal Revenue %                          8.0%       3.9%      407  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 results are driven by a combination of our investments in people and technology, and by our acquisitions which have enabled us to rapidly expand our capabilities," said Dave Menzel, Chief Financial Officer of Echo. "We anticipate these investments will drive future revenue growth and improvements in operating leverage in the second half of 2013."

Business Outlook

"Our revenue growth rate for the first three weeks of April 2013 was approximately 18% over the same period in the prior year," stated Waggoner. "Our growth through the first part of 2013 is lower than we had originally anticipated, due in large part to what we believe has been a sluggish overall economic climate, and as such we are reducing our annual revenue guidance to a range of $900 million to $940 million and our full year fully diluted non-GAAP EPS to a range of $0.78 to $0.84."

Conference Call

A conference call, with accompanying presentation slides, will be broadcast live on April 25, 2013 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 these Non-GAAP financial measures to describe earnings and earnings per share excluding the effects of changes in contingent consideration payable. We believe such measures 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. 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 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 March 31,       
                                           2013                 2012        
                                                  (Unaudited)               
                                   ---------------------------------------- 
REVENUE                            $       203,977,378  $       168,569,105 
                                                                            
COSTS AND EXPENSES                                                          
 Transportation costs                      165,526,099          135,899,327 
 Selling, general, and                                                      
  administrative expenses                   31,007,144           25,283,944 
 Depreciation and amortization               2,595,311            2,029,277 
                                   -------------------  ------------------- 
INCOME FROM OPERATIONS                       4,848,824            5,356,557 
OTHER EXPENSE                                  (94,216)            (109,636)
                                   -------------------  ------------------- 
INCOME BEFORE PROVISION FOR INCOME                                          
 TAXES                                       4,754,608            5,246,921 
INCOME TAX EXPENSE                          (1,777,976)          (1,935,131)
                                   -------------------  ------------------- 
NET INCOME                         $         2,976,632  $         3,311,790 
                                   ===================  =================== 
                                                                            
Basic net income per share         $              0.13  $              0.15 
Diluted net income per share       $              0.13  $              0.15 
                                                                            
       
                                                                     
                                                                            
                         Echo Global Logistics, Inc.                        
                    Condensed Consolidated Balance Sheets                   
                                                                            
                                             --------------- ---------------
                                                March 31,      December 31, 
                                                   2013            2012     
                                               (Unaudited)                  
                                             --------------- ---------------
  Cash and cash equivalents                  $    44,082,128 $    41,780,984
  Accounts receivable, net of allowance for                                 
   doubtful accounts                             106,140,286      96,623,553
  Prepaid expenses                                 1,888,349       2,491,955
  Other current assets                             2,090,399         843,009
  Total long term assets                          78,751,263      77,743,563
                                             --------------- ---------------
Total assets                                 $   232,952,425 $   219,483,064
                                             =============== ===============
                                                                            
  Accounts payable - trade                   $    67,448,800 $    58,889,437
  Current maturities of capital lease                                       
   obligations                                        16,322          24,086
  Other liabilites                                11,529,895      12,074,645
  Deferred income taxes                            2,984,673       1,915,847
  Long term liabilities                            5,744,468       5,593,639
  Stockholders' equity                           145,228,267     140,985,410
                                             --------------- ---------------
Total liabilities and stockholders' equity   $   232,952,425 $   219,483,064
                                             =============== ===============
                                                           -               -
                                                                            
                                                                            
                                                                            
                        Echo Global Logistics, Inc.                         
              Condensed Consolidated Statements of Cash Flows               
                                                                            
                                             ------------------------------ 
                                              Three Months Ended March 31,  
                                                  2013            2012      
                                                       (Unaudited)          
                                             ------------------------------ 
Net cash provided by operating activities    $    6,243,380  $    4,425,117 
                                                                            
Net cash used in investing activities            (4,163,734)     (2,189,822)
                                                                            
Net cash provided by (used in) financing                                    
 activities                                         221,498      (1,024,428)
                                             --------------  -------------- 
                                                                            
Increase in cash and cash equivalents             2,301,144       1,210,867 
Cash and cash equivalents, beginning of                                     
 period                                          41,780,984      47,007,309 
                                             --------------  -------------- 
Cash and cash equivalents, end of period     $   44,082,128  $   48,218,176 
                                             ==============  ============== 

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

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