Express-1 Expedited Solutions Reports Strong Q4 Results: Revenue Increases 95%, Operating Income Rises 84%

Express-1 Expedited Solutions, Inc. (AMEX:XPO) today reported its earnings for the fourth quarter, ended December 31, 2008.

Express-1 Expedited Solutions, through its three operating companies (Express-1, Concert Group Logistics and Bounce Logistics), provides the following premium transportation services: same-day delivery, time–sensitive shipping and premium freight brokerage throughout North America, as well as domestic and international freight forwarding.

Express-1 Expedited Solutions reported a 95% increase in revenue from continuing operations during the fourth quarter of 2008 to $25.0 million, compared to $12.8 million for the same period in the prior year. The acquisition of Concert Group Logistics, which had a transaction date of January 1, 2008, contributed $11.8 million to revenues for the period. For the fourth quarter, the Company's Express-1 operations experienced a decline in revenues of $2.1 million or 16.7% over the same three-month period during 2007. Bounce Logistics continued to show traction and contributed $2.8 million to the overall increase in revenues.

During the same period, operating income from continuing operations increased by 84% to $1,044,000 versus $569,000 during the same period of 2007. Income from continuing operations improved 39% to $514,000 or $0.02 per fully diluted share for the fourth quarter of 2008 compared to $369,000 or $0.01 per diluted share for the same period in 2007.

During the fourth quarter of 2008, the Company discontinued its Express-1 Dedicated Operations, in anticipation of a cessation of this business activity during the first quarter of 2009. The Company's management does not anticipate the incurrence of material charges related to this shutdown activity. Income from discontinued operations was $73,000, net of tax during the fourth quarter of 2008, versus income of $88,000, net of tax on these same operations during the fourth quarter of 2007.

"Throughout 2008, we have shared with our investors the significant impact the Company has experienced from our Concert Group Logistics and Bounce Logistics operations. Each of these businesses is profitable and has contributed to the overall business mix within our platform. In periods of weakness within the various freight economies, it is important to have this diversity within our Company. With the widely publicized downturn in the domestic and international economies, the strength of our non-asset based operating model came through. While we're never totally pleased with our results, we are proud that we can maintain growth and profitability in the face of such an extremely weak freight market," stated Michael Welch, the Company's Chief Executive Officer.

Welch added, "I am pleased with the results we achieved from our two newer business units, Concert Group Logistics and Bounce Logistics. Each of these operations performed well in our weak economy. We're cautiously optimistic that each of these units will continue to grow throughout 2009, as our team develops new business and business relationships. Considering the overall weaknesses within the domestic expedite market, we are also pleased with the operating results from our Express-1 business unit during the quarter. We're focused on growth and business development initiatives. We completed some of the groundwork during the fourth quarter for what we anticipate will be an increase in business consolidation activities throughout 2009. During just the first few weeks of 2009, we have already completed one small acquisition of an important piece of expedite business volume. Our non-asset based business model is sound and we believe the financial strength of our Company can allow us to expand, even in this weakened economy."

Chief Financial Officer Mark Patterson said, "Once again, our Company continued to demonstrate significant operating leverage during the fourth quarter. The rate of growth within our Selling, General and Administrative (SG&A) expenses was approximately one fourth the rate of growth of our revenues. The result of this leverage is that we have been able to continuously increase our operating income from continuing operations, even in periods of rate compression and weakness within the overall transportation market. During the fourth quarter of 2008, we took some significant steps aimed at controlling SG&A costs. These included headcount reductions; reductions in executive and managerial bonus awards; limitations on travel and entertainment; and limitations on hiring and wage increases. Our entire organization is focused upon efforts that will enhance and support our profitability, even in the face of the current recession. We are very proud of how our entire team has responded thus far."

Outlook

"Looking towards 2009, we continue to be focused on business development efforts and maintaining an acceptable level of profitability, until the economic climate improves. Jeff Curry at Express-1, Gerry Post at Concert Group Logistics and Tim Hindes at Bounce Logistics each lead a team of professionals that are committed to preserving the positive momentum we've developed over the past three and a half years," Welch said. "Potential acquisitions, new business development and stringent cost controls are critical to achieving the results we desire in 2009. Our non-asset based business model has proven itself over many years and in all types of economic climates. By remaining focused on our goals, we should be able to weather the current economic recession better than many of our peers within the transportation community."

Conference Call/Webcast Information

Management will conduct a conference call Wednesday February 11, 2009 at 9:00 a.m. Eastern 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 877-407-9210, with international participants dialing 201-689-8049. A playback will be available until midnight on February 18, 2009. To listen to the playback, please call 877-660-6853. Use account number 286 and conference ID number 311564.

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 risks. These risks include: 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.

Express-1 Expedited Solutions, Inc.
Consolidated Balance Sheet

 

             
      December 31,     December 31,
      2008     2007
Assets            
Current assets:            
Cash and cash equivalents   $ 1,107,000     $ 800,000  
Accounts receivable, net of allowances of $133,000 and $77,000, respectively     12,202,000       5,663,000  
Prepaid expenses     372,000       492,000  
Other current assets    

650,000

      149,000  
Deferred tax asset, current     493,000       1,549,000  
Total current assets    

14,824,000

      8,653,000  
             
Property and equipment, net of $2,220,000 and $1,734,000 in accumulated depreciation, respectively     3,141,000       2,312,000  
             
Goodwill     14,915,000       7,737,000  
Identified intangible assets, net of $1,683,000 and $1,279,000 in accumulated amortization, respectively     7,631,000       3,950,000  
Loans and advances     63,000       104,000  
Deferred tax asset, long term     -       377,000  
Other long term assets    

1,108,000

      591,000  
    $ 41,682,000     $ 23,724,000  
             
Liabilities and Stockholders' Equity            
Current liabilities:            
Accounts payable   $ 6,578,000     $ 892,000  
Accrued salaries and wages     691,000       660,000  
Accrued acquisition earnouts     -       2,210,000  
Accrued expenses, other     862,000       861,000  
Current maturities of long term debt     1,235,000       50,000  
Other current liabilities     1,030,000       199,000  
Total current liabilities     10,396,000       4,872,000  
             
Line of credit     2,320,000       -  
Notes payable and capital leases, net of current maturities     1,400,000       34,000  
Deferred tax liability, long term     583,000       -  
Other long-term liabilities     456,000       616,000  
Total long-term liabilities     4,759,000       650,000  
             
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; 32,215,218 and 27,008,768 shares issued and 32,035,218 and 26,516,037 shares outstanding     32,000       27,000  
Additional paid-in capital     26,316,000       21,152,000  

Retained earnings (deficit)

    286,000       (2,870,000 )
Treasury stock, at cost, 180,000 shares held     (107,000 )     (107,000 )
             
Total stockholders' equity     26,527,000       18,202,000  
    $ 41,682,000     $ 23,724,000  

 

Express-1 Expedited Solutions, Inc.
Consolidated Statements of Operations

 

                           

 

  Three Months Ended     Twelve Months Ended
                           
      December 31,     December 31,       December 31,     December 31,
      2008     2007       2008     2007
                           
Revenues                          
Operating revenue   $ 24,954,000   $ 12,811,000       $ 109,462,000   $ 47,713,000
                           
Expenses                          
Direct expenses     20,933,000     9,813,000         91,628,000     35,951,000
                           
Gross margin     4,021,000     2,998,000         17,834,000     11,762,000
                           
Sales, general and administrative expense     2,977,000     2,429,000         12,664,000     8,803,000
Operating income from continuing operations     1,044,000     569,000         5,170,000     2,959,000
                           
Other expense (income)     69,000     (3,000 )       105,000     14,000
Interest expense (income)     81,000     (6,000 )       354,000     65,000
                           
Income from continuing operations, before income tax     894,000     578,000         4,711,000     2,880,000
                           
Income tax provision     380,000     209,000         1,894,000     1,067,000
                           
Income from continuing operations     514,000     369,000         2,817,000     1,813,000
                           
Income from discontinued operations, net of tax of $54,000 and $250,000, respectively     73,000     88,000         339,000     358,000
                           
Net Income   $ 587,000   $ 457,000       $ 3,156,000   $ 2,171,000
                           
Basic income per share                          
Income from continuing operations     0.02     0.01         0.09     0.07
Income from discontinued operations     0.00     0.00         0.01     0.01
Net income     0.02     0.02         0.10     0.08
                           
Diluted income per share                          
Income from continuing operations     0.02     0.01         0.09     0.07
Income from discontinued operations     0.00     0.00         0.01     0.01
Net income     0.02     0.02         0.10     0.08
                           
Weighted average common shares outstanding                          
Basic weighted average common shares outstanding     32,035,247     26,758,362         31,453,765     26,690,382
Diluted weighted average common shares outstanding     32,212,725     27,180,814         31,757,164     27,326,729

 

Express-1 Expedited Solutions, Inc.
Summary Financial Table

For the Three Months Ended December 31, 2008 and 2007

                   
                   
    Quarter to Date   Quarter to Quarter Change   Percent of Revenue
    2008 2007   In Dollars In Percentage   2008 2007
Revenues                  
Express-1   $ 10,675,000   $ 12,811,000     $ (2,136,000 ) -16.7 %   42.8 % 100.0 %
Concert Group Logistics     11,832,000     -       11,832,000   -     47.4 % -  
Bounce Logistics     2,770,000     -       2,770,000   -     11.1 % -  
Intercompany Eliminations     (323,000 )   -       (323,000 ) -     -1.3 % -  
Total Revenues     24,954,000     12,811,000       12,143,000   94.8 %   100.0 % 100.0 %
                   
Direct Expenses                  
Express-1     8,263,000     9,813,000       (1,550,000 ) -15.8 %   33.1 % 76.6 %
Concert Group Logistics     10,735,000     -       10,735,000   -     43.0 % -  
Bounce Logistics     2,258,000     -       2,258,000   -     9.0 % -  
Intercompany Eliminations     (323,000 )   -       (323,000 ) -     -1.2 % -  
Total Direct Expenses     20,933,000     9,813,000       11,120,000   113.3 %   83.9 % 76.6 %
                   
Gross Margin                  
Express-1     2,412,000     2,998,000       (586,000 ) -19.5 %   9.7 % 23.4 %
Concert Group Logistics     1,097,000     -       1,097,000   -     4.4 % -  
Bounce Logistics     512,000     -       512,000   -     2.0 % -  
Total Gross Margin     4,021,000     2,998,000       1,023,000   34.1 %   16.1 % 23.4 %
                   
Selling, General & Administrative                  
Express-1     1,728,000     1,988,000       (260,000 ) -13.1 %   6.9 % 15.5 %
Concert Group Logistics     525,000     -       525,000   -     2.1 % -  
Bounce Logistics     355,000     -       355,000   -     1.4 % -  
Corporate     369,000     441,000       (72,000 ) -16.3 %   1.5 % 3.4 %
Total Selling, General & Administrative     2,977,000     2,429,000       548,000   22.6 %   11.9 % 19.0 %
                   
Operating Income from Continuing Operations                  
Express-1     684,000     1,010,000       (326,000 ) -32.3 %   2.7 % 7.9 %
Concert Group Logistics     572,000     -       572,000   -     2.3 % -  
Bounce Logistics     157,000     -       157,000   -     0.6 % -  
Corporate     (369,000 )   (441,000 )     72,000   16.3 %   -1.4 % -3.4 %
Operating Income from Continuing Operations     1,044,000     569,000       475,000   83.5 %   4.2 % 4.4 %
                   
Interest Expense     81,000     (6,000 )     87,000   -1450.0 %   0.3 % -  
Other Expense     69,000     (3,000 )     72,000   2400.0 %   0.3 % -  

Income from Continuing Operations Before Tax

    894,000     578,000       316,000   54.7 %   3.6 % 4.5 %
                   
Tax Provision     380,000     209,000       171,000   81.8 %   1.5 % 1.6 %
Income from Continuing Operations     514,000     369,000       145,000   39.3 %   2.1 % 2.9 %
                   
Income from Discontinued Operations, Net of Tax     73,000     88,000       (15,000 ) -17.0 %   0.3 % 0.7 %
Net Income   $ 587,000   $ 457,000     $ 130,000   28.4 %   2.4 % 3.6 %

 

Express-1 Expedited Solutions, Inc.
Summary Financial Table

For the Twelve Months Ended December 31, 2008 and 2007

                   
                   
    Year to Date   Year to Year Change   Percent of Revenue
    2008 2007   In Dollars In Percentage   2008 2007
Revenues                  
Express-1   $ 52,639,000   $ 47,713,000     $ 4,926,000   10.3 %   48.1 % 100.0 %
Concert Group Logistics     51,136,000     -       51,136,000   -     46.7 % -  
Bounce Logistics     7,011,000     -       7,011,000   -     6.4 % -  
Intercompany Eliminations     (1,324,000 )   -       (1,324,000 ) -     -1.2 % -  
Total Revenues     109,462,000     47,713,000       61,749,000   129.4 %   100.0 % 100.0 %
                   
Direct Expenses                  
Express-1     40,408,000     35,951,000       4,457,000   12.4 %   36.9 % 75.3 %
Concert Group Logistics     46,578,000     -       46,578,000   -     42.6 % -  
Bounce Logistics     5,966,000     -       5,966,000   -     5.5 % -  
Intercompany Eliminations     (1,324,000 )   -       (1,324,000 ) -     -1.3 % -  
Total Direct Expenses     91,628,000     35,951,000       55,677,000   154.9 %   83.7 % 75.3 %
                   
Gross Margin                  
Express-1     12,231,000     11,762,000       469,000   4.0 %   11.2 % 24.7 %
Concert Group Logistics     4,558,000     -       4,558,000   -     4.2 % -  
Bounce Logistics     1,045,000     -       1,045,000   -     0.9 % -  
Total Gross Margin     17,834,000     11,762,000       6,072,000   51.6 %   16.3 % 24.7 %
                   
Selling, General & Administrative                  
Express-1     7,116,000     7,236,000       (120,000 ) -1.7 %   6.5 % 15.2 %
Concert Group Logistics     2,847,000     -       2,847,000   -     2.6 % -  
Bounce Logistics     1,079,000     -       1,079,000   -     1.0 % -  
Corporate     1,622,000     1,567,000       55,000   3.5 %   1.5 % 3.2 %
Total Selling, General & Administrative     12,664,000     8,803,000       3,861,000   43.9 %   11.6 % 18.4 %
                   
Operating Income from Continuing Operations                  
Express-1     5,115,000     4,526,000       589,000   13.0 %   4.7 % 9.5 %
Concert Group Logistics     1,711,000     -       1,711,000   -     1.6 % -  
Bounce Logistics     (34,000 )   -       (34,000 ) -     -   -  
Corporate     (1,622,000 )   (1,567,000 )     (55,000 ) -3.5 %   -1.6 % -3.3 %
Operating Income from Continuing Operations     5,170,000     2,959,000       2,211,000   74.7 %   4.7 % 6.2 %
                   
Interest Expense     354,000     65,000       289,000   444.6 %   0.3 % 0.1 %
Other Expense     105,000     14,000       91,000   650.0 %   0.1 % -  

Income from Continuing Operations Before Tax

    4,711,000     2,880,000       1,831,000   63.6 %   4.3 % 6.0 %
                   
Tax Provision     1,894,000     1,067,000       827,000   77.5 %   1.7 % 2.2 %
Income from Continuing Operations     2,817,000     1,813,000       1,004,000   55.4 %   2.6 % 3.8 %
                   
Income from Discontinued Operations, Net of Tax     339,000     358,000       (19,000 ) -5.3 %   0.3 % 0.8 %
Net Income   $ 3,156,000   $ 2,171,000     $ 985,000   45.4 %   2.9 % 4.6 %