• Achieves 2006 Guidance

Express-1 Expedited Solutions, Inc. (Express-1, or the Company) (AMEX:XPO)today announced its financial results for the fourth quarter ended December 31, 2006 and fiscal year ended December 31, 2006.

Express-1, one of the nation's top 10 providers of ground expedited services for the manufacturing, logistics, service, automotive and other industries, reported net income of $3.9 million, or $0.15 per diluted share, on revenues of approximately $42.2 million for the 2006 fiscal year ended December 31, compared with a net loss of approximately $5.8 million, or a loss of $0.22 per diluted share, on revenues of approximately $39.8 million for the prior year.

For the fourth quarter of 2006, revenues increased to $10.7 million from $9.7 million in the fourth quarter of 2005. The Company's GAAP net income for the fourth quarter of 2006 was $1,595,000, or $0.06 per share. This compares with a GAAP net income of $597,000, or $0.02 per share, for the fourth quarter last year. The 2006 number includes approximately $1.1 million in one-time tax benefits. EBITDA for the fourth quarter of 2006 was $815,000, compared with $910,000 for the year-ago quarter. Please refer to Table 1 for a reconciliation of net income, as reported, to EBITDA.

"Express-1 continued to outperform the expedite industry this quarter on the top line and in other key areas including growth in fleet size and loaded miles," said Michael Welch, the Company's president and chief executive officer. "We continued to execute successfully on our strategy during the quarter, increasing our capacity by further expanding the size of our fleet, and growing our market share through new accounts and additional business from existing accounts. As a result, our Express-1 average fleet size increased 29% from the fourth quarter of 2005, utilization remained strong, and our core Express-1 business generated a 12% increase in revenue compared to the fourth quarter of 2005. At the same time, our Evansville contract dedicated operations remained revenue neutral in the fourth quarter of 2006 compared to the fourth quarter of 2005. With all of 2006 now complete, we are pleased that we were able to achieve our guidance for the full year."

The Company's Chief Financial Officer Mark Patterson said, "Thanks to our lean cost structure and asset-light business model, our Express-1 business continued to reflect strong gross margins and operating leverage this quarter. We continue to be cautious about adding employees and careful in our spending, and our reliance on independent contractors supplemented by brokerage through third-party carriers maximizes our operational efficiency. Gross margin came in at 25% for the fourth quarter of 2006. In combination with improved SG&A leverage, this enabled us to deliver another quarter of strong EBITDA and net income for the quarter."

Outlook and Financial Guidance

"Looking ahead to 2007, we believe the momentum we have generated with our additional fleet capacity and with our customers will drive further growth in our business," Welch said. "Our immediate goal is to be one of the largest ground expediters in the country. In order to accomplish our goal we will drive growth by adding to our customer base and recruiting additional sales force. We are confident in our business model and believe that, by remaining conservative and goal-focused in our approach, we will be able to continue delivering on our targets for growth and profitability."

Express-1 announced its anticipated guidance for the full year of 2007. The Company expects full-year revenue for 2007 will be in the range of $48 million to $52 million, representing approximately 15% to 23% growth in the Company's expedited operations. The Company expects full-year net income in the range of $0.07 to $0.09 per share based on its current shares outstanding. For the full year of 2007, EBITDA is expected to be between $4.0 million and $5.0 million, based upon current estimates.

Conference Call/Webcast Information

Management will conduct a conference call this morning at 10:00 a.m. ET to discuss the Company's fourth-quarter financial results. Those interested in accessing a live or archived webcast of the call should visit the Company's website at www.express-1.com. Those wishing to take part in the live teleconference call can dial 201-689-8049 (international) or 877-407-9210. A playback will be available through midnight on March 1, 2007. To listen to the playback, please call 201-612-7415 (international) or 877-660-6853. Use account number 286 and conference ID number 228677.

Forward-Looking Statements

This press release contains forward-looking statements that may be subject to various risks and uncertainties. Such forward-looking statements are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and are made based on management's current expectations or beliefs as well as assumptions made by, and information currently available to, management. These forward-looking statements, which may include statements regarding our future financial performance or results of operations, including expected revenue growth, cash flow growth, future expenses, future operating margins and other future or expected performance, are subject to the following risks: that our recent reorganization fails to result in projected operating efficiencies; the acquisition of businesses or the launch of new lines of business, which could increase operating expenses and dilute operating margins; increased competition, which could lead to negative pressure on our pricing and the need for increased marketing; the inability to maintain, establish or renew relationships with customers, whether due to competition or other factors; the inability to comply with regulatory requirements governing our business operations; and to the general risks associated with our businesses.

In addition to the risks and uncertainties discussed above you can find additional information concerning risks and uncertainties that would cause actual results to differ materially from those projected or suggested in the forward-looking statements in the reports that we have filed with the Securities and Exchange Commission. The forward-looking statements contained in this press release represent our judgment as of the date of this release and you should not unduly rely on such statements. Unless otherwise required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this press release. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in the filing may not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements.

Use of GAAP and Non-GAAP Measures

In addition to results presented in accordance with generally accepted accounting principles (GAAP), the Company has included "EBITDA", a non-GAAP financial measure. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. In addition, the Company excludes from its EBITDA calculation the cumulative effect of a change in accounting principle, discontinued operations, and the impact of restructuring and certain other charges, and includes in the EBITDA calculation selected financial data related to various Company acquisitions. A reconciliation of EBITDA to the most directly comparable GAAP financial measure is set forth herein.

Management believes the use of non-GAAP financial measures provides useful information to investors to assist them in understanding the underlying operational performance of the Company. Specifically, management believes EBITDA is a useful measure of operating performance before the impact of investing and financing transactions, making comparisons between companies' earnings power more meaningful and providing consistent period-over-period comparisons of the Company's performance. The Company uses these non-GAAP financial measures internally to measure its ongoing business performance and in reports to bankers to permit monitoring of the Company's ability to pay outstanding liabilities.

Express-1 Expedited Solutions, Inc.
EBITDA Reconciliation
                 
    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
      2006      2005      2006      2005 
                 
Net income (loss) as reported   $ 1,595,000    $ 597,000    $ 3,905,000    $ (5,815,000)
Income tax (benefit) provision     (1,128,000)         (1,128,000)    
Interest expense     43,000      53,000      205,000      187,000 
Depreciation and amortization     305,000      260,000      1,054,000      1,435,000 
Restructuring, exit and consolidation expenses                 4,448,000 
                 
EBITDA   $ 815,000    $ 910,000    $ 4,036,000    $ 255,000 

 

Express-1 Expedited Solutions, Inc.
Statements of Operations
                               
                               
        Three Months Ended     Twelve Months Ended
         

Dec. 31,

   

Dec. 31,

     

Dec. 31,

   

Dec. 31,

          2006      2005        2006      2005 
                               
Revenues                          
  Operating revenue   $ 10,665,000    $ 9,697,000      $ 42,191,000    $ 39,848,000 
                               
Expenses:                          
  Direct expenses     8,005,000      6,953,000        31,396,000      30,852,000 
                               
    Gross profit     2,660,000      2,744,000        10,795,000      8,996,000 
                               
  Sales, general and administrative expense     2,102,000      2,094,000        7,607,000      10,176,000 
  Restructuring, exit and consolidation expense                   4,448,000 
                               
    Total sales, general and administrative expense     2,102,000      2,094,000        7,607,000      14,624,000 
                               
Other expense     48,000            206,000     
Interest Expense     43,000      53,000        205,000      187,000 
                               
Income (loss) before income tax provision     467,000      597,000        2,777,000      (5,815,000)
                               
Income tax (benefit) provision     (1,128,000)           (1,128,000)    
                               
Net income (loss)   $ 1,595,000    $ 597,000      $ 3,905,000    $ (5,815,000)
                               
Basic income (loss) per common share     0.06      0.02        0.15      (0.22)
                               
Basic weighted average common shares outstanding     26,332,776      26,305,034        26,297,120      26,523,650 
                               
Diluted income (loss) per common share     0.06      0.02        0.15      (0.22)
                               
Diluted weighted average common shares outstanding     26,821,687      26,319,050        26,641,012      26,523,650 

 

Express-1 Expedited Solutions, Inc.
Balance Sheet
             
             
      December 31,     December 31,
      2006      2005 
Assets            
Current assets:            
Cash and cash equivalents   $ 79,000    $ 386,000 
Accounts receivable, net of allowances of $77,000 and $732,000, respectively     5,354,000      4,434,000 
Prepaid expenses     265,000      326,000 
Other current assets     182,000      77,000 
Deferred tax asset, current     1,069,000      500,000 
Total current assets     6,949,000      5,723,000 
             
Property and equipment, net of accumulated depreciation     2,488,000      2,229,000 
             
Goodwill     5,527,000      3,567,000 
Identified intangible assets, net of accumulated amortization     4,225,000      4,629,000 
Loans and advances     143,000      439,000 
Deferred tax asset, long term     2,069,000      1,504,000 
Other long term assets     208,000      363,000 
    $ 21,609,000    $ 18,454,000 
             
Liabilities and Stockholders' Equity            
Current liabilities:            
Accounts payable   $ 1,034,000    $ 924,000 
Accrued salaries and wages     724,000      397,000 
Accrued acquisition earnouts     1,960,000      1,710,000 
Accrued expenses, other     740,000      1,011,000 
Current maturities of long term debt     117,000      242,000 
Other current liabilities     295,000      97,000 
Total current liabilities     4,870,000      4,381,000 
             
Line of credit     1,159,000      1,764,000 
Notes payable and capital leases, net of current maturities     127,000      824,000 
Other long-term liabilities     114,000      199,000 
Total long-term liabilities     1,400,000      2,787,000 
             
Stockholders' equity:            
Preferred stock, $.001 par value; 10,000,000 shares no shares issued or outstanding        
Common stock, $.001 par value; 100,000,000 shares authorized; 26,696,037 and 26,465,034 shares issued and 26,516,037 and 26,285,034 shares outstanding     27,000      26,000 
Additional paid-in capital     20,459,000      20,312,000 
Accumulated deficit     (5,040,000)     (8,945,000)
Treasury stock, at cost, 180,000 shares held     (107,000)     (107,000)
             
Total stockholders' equity     15,339,000      11,286,000 
    $ 21,609,000    $ 18,454,000 

 

Express-1 Expedited Solutions, Inc.
Selected Financial Data
For the three months ended, December 31, 2006
             
  Express-1
Expedited
Evansville
Dedicated
Corporate Core
Business
Other Express-1
Expedited
Solutions, Inc.
             
             
Operating Revenues $ 9,493,000  $ 1,172,000  $ -  $10,665,000  $ -  $ 10,665,000 
             
Operating Expenses 7,004,000  994,000  7,998,000  7,000  8,005,000 
             

Sales, general and administrative expenses (1)

1,572,000  205,000  425,000  2,202,000  (9,000) 2,193,000 
             
Restructuring expenses
             
Net income (loss) before provision (benefit) for taxes $ 917,000  $ (27,000) $ (425,000) $ 465,000  $ 2,000  $ 467,000 
             
Provision for (benefit) from income taxes (1,128,000) (1,128,000) (1,128,000)
             
Net income $ 917,000  $ (27,000) $ 703,000  $ 1,593,000  $ 2,000  $ 1,595,000 
             
Restructuring expenses $ -  $ -  $ -  $ -  $ -  $ - 
Depreciation and amortization 194,000  111,000  305,000  305,000 
Interest espense, net 43,000  43,000  43,000 
Taxes (1,128,000) (1,128,000) (1,128,000)
             
EBITDA $ 1,111,000  $ 84,000  $ (382,000) $ 813,000  $ 2,000  $ 815,000 
             
             
(1) For the purpose of calculating EBITDA, approximately $91,000 of "Interest and other income and expense" has been classified within the line item "Selling, general and admministrative expenses."

 

Express-1 Expedited Solutions, Inc.
Selected Financial Data
For the three months ended, December 31, 2005
  Express-1
Expedited
Evansville
Dedicated
Corporate Core
Business
Other Express-1
Expedited
Solutions, Inc.
             
             
Operating Revenues $ 8,513,000  $ 1,184,000  $ -  $ 9,697,000  $ -  $ 9,697,000 
             
Operating Expenses 6,035,000  965,000  7,000,000  (47,000) 6,953,000 
             
Sales, general and administrative expenses (1) 1,450,000  123,000  568,000  2,141,000  6,000  2,147,000 
             
Restructuring expenses
             
Net income (loss) before provision (benefit) for taxes $ 1,028,000  $ 96,000  $ (568,000) $ 556,000  $ 41,000  $ 597,000 
             
Provision for (benefit) from income taxes
             
Net income $ 1,028,000  $ 96,000  $ (568,000) $ 556,000  $ 41,000  $ 597,000 
             
Restructuring expenses $ -  $ -  $ -  $ -  $ -  $ - 
Depreciation and amortization 213,000  47,000  260,000  260,000 
Interest espense, net 53,000  53,000  53,000 
Taxes
             
EBITDA $ 1,241,000  $ 143,000  $ (515,000) $ 869,000  $ 41,000  $ 910,000 
             
(1) For the purpose of calculating EBITDA, approximately $69,000 of "Interest and other income and expense" has been classified within the line item "Selling, general and admministrative expenses."

 

Express-1 Expedited Solutions, Inc.
Selected Financial Data
For the twelve months ended, December 31, 2006
  Express-1
Expedited
Evansville
Dedicated
Corporate Core
Business
Other Express-1
Expedited
Solutions, Inc.
             
             
Operating Revenues $ 37,326,000  $ 4,864,000  $ -  $ 42,190,000  $ 1,000  $ 42,191,000 
             
Operating Expenses 27,349,000  3,958,000  31,307,000  89,000  31,396,000 
             
Sales, general and administrative expenses (1) 5,997,000  676,000  1,512,000  8,185,000  (167,000) 8,018,000 
             
Restructuring expenses
             
Net income (loss) before provision (benefit) for taxes $ 3,980,000  $ 230,000  $ (1,512,000) $ 2,698,000  $ 79,000  $ 2,777,000 
             
Provision for (benefit) from income taxes (1,128,000) (1,128,000) (1,128,000)
             
Net income $ 3,980,000  $ 230,000  $ (384,000) $ 3,826,000  $ 79,000  $ 3,905,000 
             
Restructuring expenses $ -  $ -  $ -  $ -  $ -  $ - 
Depreciation and amortization 801,000  253,000  1,054,000  1,054,000 
Interest espense, net 205,000  205,000  205,000 
Taxes (1,128,000) (1,128,000) (1,128,000)
             
EBITDA $ 4,781,000  $ 483,000  $ (1,307,000) $ 3,957,000  $ 79,000  $ 4,036,000 
             
             
(1) For the purpose of calculating EBITDA, approximately $411,000 of "Interest and other income and expense" has been classified within the line item "Selling, general and admministrative expenses."

 

Express-1 Expedited Solutions, Inc.
Selected Financial Data
For the twelve months ended, December 31, 2005
  Express-1
Expedited
Evansville
Dedicated
Corporate Core
Business
Other Express-1
Expedited
Solutions, Inc.
             
             
Operating Revenues $ 30,667,000  $ 4,465,000  $ -  $ 35,132,000  $ 4,716,000  $ 39,848,000 
             
Operating Expenses 22,617,000  4,010,000  26,627,000  4,225,000  30,852,000 
             
Sales, general and administrative expenses (1) 5,999,000  598,000  2,479,000  9,076,000  1,287,000  10,363,000 
             
Restructuring expenses 4,448,000  4,448,000  4,448,000 
             
Net income (loss) before provision (benefit) for taxes $ 2,051,000  $ (143,000) $ (6,927,000) $ (5,019,000) $ (796,000) $ (5,815,000)
             
Provision for (benefit) from income taxes
             
Net income $ 2,051,000  $ (143,000) $ (6,927,000) $ (5,019,000) $ (796,000) $ (5,815,000)
             
Restructuring expenses $ -  $ -  $ 4,448,000  $ 4,448,000  $ -  $ 4,448,000 
Depreciation and amortization 792,000  358,000  200,000  1,350,000  85,000  1,435,000 
Interest espense, net 187,000  187,000  187,000 
Taxes
             
EBITDA $ 2,843,000  $ 215,000  $ (2,092,000) $ 966,000  $ (711,000) $ 255,000 
             
(1) For the purpose of calculating EBITDA, approximately $187,000 of "Interest and other income and expense" has been classified within the line item "Selling, general and admministrative expenses."

 

The selected financial data above represents "reporting units" within the Company. The subtotal entitled "Core Business" represents the expedited operations remaining after the completion of the restructuring plan, and is intended only to give the reader the ability to view what are now our ongoing operations, exclusive of the closed operations. The column entitled "Other" represents services or location revenue and expenses that have primarily been eliminated based on the restructuring plan implemented in the fourth quarter of 2004. Remaining expense items reflected within this column include adjustments to real estate leases, equipment termination costs and impairment charges associated with equipment and property no longer in use. None of our reporting units met the quantitative criteria required for segment reporting. For purposes of the selected financial tables above, we have included Interest Expense and Other Expense within the line item Sales, General and Administrative Expenses.