Express-1 Expedited Solutions (AMEX:XPO) Continues Driving Momentum for Eighth Consecutive Quarter

  • Revenues up 23%

Express-1 Expedited Solutions, Inc. (AMEX:XPO)today reported its earnings for the third quarter, ended September 30, 2007.

Express-1, one of the nations top providers of ground expedited services for the automotive, manufacturing, logistics, service, and other industries, reported a 23.1% increase in revenue in the third quarter of 2007. Revenues increased to $13.4 million compared to $10.9 million in the third quarter of 2006. The Company continues to grow at a rapid pace, even in the face of a weakened transportation market.

During the same period, income from operations (income before income tax provision) decreased by 11.8% to $798,000 versus $905,000 for the same period in 2006. Net income was $499,000 or $0.02 per diluted share for the third quarter of 2007 compared to $905,000 or $0.03 per diluted share for the third quarter of 2006. Most of the decline is related to the recording of a provision for current taxes during the 2007 period. The Company did not record a current provision for taxes during the third quarter of 2006, and estimates its net operating loss carry-forwards (NOLs) have been reduced to approximately $5.2 million as of September 30, 2007. At the start of 2007, the Company had net operating loss carry forwards of approximately $8.3 million, which are reduced by current taxable earnings. The Company does not anticipate paying a significant amount of cash for income taxes until its net operating losses are exhausted.

Express-1 continues to build on its success, and now has completed eight consecutive quarters of strong top-line growth. We continue to gain market share as reflected by our increases in revenue, and remain focused on our earnings. Our fleet of value providers (VPs) as we call them, has steadily increased and we are focused on giving them more miles and enhancing their quality of life, said Michael Welch, the Companys Chief Executive Officer. Jeff Curry, President of the Companys primary operating segment, Express-1, Inc. commented, Within Express-1 we increased revenues by gaining market share in the face of significant rate pressures. While our margin percentages reflected this rate pressure, our overall gross margin improved due to our growth efforts. We are focused on cost containment and successfully reduced our SG&A as a percentage of revenues, within Express-1, Inc. Our average fleet of VPs increased by 46% during the period. Mr. Welch added further, At the same time, our Evansville segment showed a slight increase in revenue, and most importantly was awarded the rates and assurances we needed to deliver the results we wanted from that location. We remain focused on pushing our momentum as we close out 2007 and plan for 2008.

Chief Financial Officer Mark Patterson said, The Company continues to demonstrate the operating leverage weve spoken of in the past. Our SG&A declined by a full percentage over the prior year. In the face of a soft transportation economy, it will remain important for us to continue to expand our revenue base and control our back office cost. Were committed to this model, and believe it gives us more strength and flexibility in periods of weakened demand. Were pleased with these results and proud of the commitment from our team.

Outlook

Looking towards the end of 2007, we continue to be focused on adding to our fleet capacity and on further developing of our customer base. These are two of the primary keys of our successful organic growth, Welch said. With rate compression like we saw at the start of the third quarter, fleet growth and market expansion are critical to continuing to expand gross margin dollars. Our business model has proven itself over many years and in all types of economic climate. We remain on target to deliver the results we committed to deliver at the start of 2007. By remaining focused on our model and our goals, we should be able to continue growing our company and our profits.

Conference Call/Webcast Information

Management will conduct a conference call November 8th at 11:00 a.m. Eastern to discuss the Companys third quarter financial results. Those interested in accessing a live or archived Webcast of the call should visit the Companys Website at www.express-1.com. Those wishing to take part in the live teleconference call can dial 201-689-8031 (International) or 877-407-8031. A playback will be available through midnight on November 15, 2007. To listen to the playback, please call 877-660-6853. Use account number 286 and conference ID number 258506.

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.


Express-1 Expedited Solutions, Inc.

Consolidated Balance Sheets

(Unaudited)

             
      September 30,     December 31,
      2007     2006
Assets            
Current assets:            
Cash and cash equivalents   $ 108,000   $ 79,000
Accounts receivable, net of allowances of $63,000 and $77,000, respectively     6,251,000     5,354,000
Prepaid expenses     207,000     265,000
Other current assets     266,000     181,000
Deferred tax asset, current     1,069,000     1,069,000
Total current assets     7,901,000     6,948,000
             
Property and equipment, net of $1,667,000 and $1,410,000 in accumulated depreciation, respectively     2,398,000     2,488,000
             
Goodwill     5,527,000     5,527,000
Identified intangible assets, net of $1,221,000 and $1,004,000 in accumulated amortization, respectively     4,008,000     4,225,000
Loans and advances     119,000     143,000
Deferred tax asset, long term     1,035,000     2,069,000
Other long term assets     459,000     209,000
    $ 21,447,000   $ 21,609,000
             
Liabilities and Stockholders Equity            
Current liabilities:            
Accounts payable   $ 714,000   $ 1,034,000
Accrued salaries and wages     639,000     724,000
Accrued acquisition earnouts     0     1,960,000
Accrued expenses, other     1,532,000     740,000
Current maturities of long term debt     113,000     117,000
Other current liabilities     197,000     295,000
Total current liabilities     3,195,000     4,870,000
             
Line of credit     103,000     1,159,000
Notes payable and capital leases, net of current maturities     10,000     127,000
Other long-term liabilities     543,000     115,000
Total long-term liabilities     656,000     1,401,000
             
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; 26,918,768 and 26,516,037 shares issued and 26,738,768 and 26,336,037 shares outstanding     27,000     27,000
Additional paid-in capital     21,003,000     20,459,000
Accumulated deficit     (3,327,000)     (5,041,000)
Treasury stock, at cost, 180,000 shares held     (107,000)     (107,000)
             
Total stockholders equity     17,596,000     15,338,000
    $ 21,447,000   $ 21,609,000


Express-1 Expedited Solutions, Inc.


Consolidated Statements of Operations


(Unaudited)

                   
        Three Months Ended     Nine Months Ended
         

Sept. 30,

   

Sept. 30,

     

Sept. 30,

   

Sept. 30,

          2007     2006       2007     2006
                               
Revenues                          
  Operating revenue   $ 13,359,000     $ 10,851,000     $ 38,694,000   $ 31,526,000
                               
Expenses                          
  Direct expenses     10,310,000       8,005,000       29,111,000     23,391,000
                               
    Gross margin     3,049,000       2,846,000       9,583,000     8,135,000
                               
  Sales, general and administrative expense     2,271,000       1,861,000       6,763,000     5,505,000
  Other expense     (33,000 )     26,000       1,000     158,000
  Interest Expense     13,000       54,000       71,000     162,000
                               
Income before income tax provision     798,000       905,000       2,748,000     2,310,000
                               
  Income tax provision     299,000       -       1,034,000     -
                               
Net income   $ 499,000     $ 905,000     $ 1,714,000   $ 2,310,000
                               
Earnings per common share                          
  Basic income per common share     0.02       0.03       0.06     0.09
  Diluted income per common share     0.02       0.03       0.06     0.09
                               
Weighted average common shares outstanding                          
  Basic weighted average common shares outstanding     26,737,547       26,285,241       26,629,119     26,285,104
  Diluted weighted average common shares outstanding     27,321,640       26,714,541       27,349,458     26,441,175

Included within the expenses above are depreciation and amortization of $198,000 and $236,000 for the three months ended September 30, 2007 and 2006, respectively; and $649,000 and $749,000 for the nine months ended September 30, 2007 and 2006, respectively.