Express-1 Expedited Solutions, Inc. (AMEX:XPO)today reported its earnings for the third quarter, ended September 30, 2008.
Express-1 Expedited Solutions, through its four operating companies (Express-1, Bounce Logistics, Express-1 Dedicated and Concert Group Logistics), provides the following premium transportation services: same-day delivery, time–sensitive shipping, premium freight brokerage and dedicated transportation throughout North America, as well as domestic and international freight forwarding.
Express-1 Expedited Solutions reported a 143% increase in revenue during the third quarter of 2008 to $32.4 million, compared to $13.4 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 $14.3 million to revenues for the period. For the third quarter, the Company's Express-1 operations expanded revenues by $2.1 million or 18% over the same three-months in 2007. Bounce Logistics gained traction and contributed $3.0 million to the overall increase in revenues. Bounce Logistics is a start-up premium truckload brokerage operation that began operations in March 2008. The Company's other business unit, Express-1 Dedicated, increased revenues slightly during the period. When combined, the Express-1 Expedited Solutions' business units delivered record revenue and operating profit during the period and the Company continued to grow at a healthy pace in the current weak economy.
During the same period, income from operations substantially increased by 160% to $2.0 million versus $778,000 during the same period of 2007. Net income improved 131% to $1.2 million or $0.04 per diluted share for the third quarter of 2008 compared to $499,000 or $0.02 per diluted share for the same period in 2007.
"Throughout 2008, our Company has significantly changed its geographical and operating footprints. The acquisition of Concert Group Logistics and the start-up of Bounce Logistics has begun to dramatically improve our results. We're pleased with our growth and profitability for the third quarter, and happy to share the success of our business units. Given we're in such a difficult freight environment, these results are a strong testament to our business model and the team we have in place throughout our Company," stated Michael Welch, the Company's Chief Executive Officer.
Welch added, "I am extremely pleased with the results we are starting to see from our two new business units, Concert Group Logistics and Bounce Logistics. Each of these businesses has continued to grow throughout 2008. We believe this will set the stage for a potentially stronger 2009, as these two units continue to develop. Complementing the new operations is the continued strong performance within our two historical business units, Express-1 and Express-1 Dedicated. We've continued to expand cross selling activities between our business units and are now offering an expanded array of premium services to our broad base of customers. We're just now capitalizing on the full breadth of our expanded business model and optimistically anticipate that we will see revenue and income continue to expand during the coming quarters."
Chief Financial Officer Mark Patterson said, "Our Company has continued to demonstrate the significant operating leverage within our model by holding the rate of growth within our Selling, General and Administrative expenses below those of our top line. Increasing by $1.0 million or 44% during the period, our Selling, General and Administrative expenses grew at a rate that is over 300% lower than the rate of growth for our revenue. As a percentage of revenue, SG&A costs continue to decline and represented 10% of consolidated revenue during the third quarter of 2008 versus over 17% during the same period in 2007. Our teams are completing the planned integration from the Concert Group Logistics acquisition and Bounce Logistics start-up. At the same time, our entire organization is focused upon lowering our overall back office costs, in an effort to support our desired levels of profitability. Our entire organization is focused upon controlling cost. We're very proud of the efforts and commitment of the entire team."
Outlook
"Looking towards the end of 2008, our business unit Presidents continue to be focused on delivering results that meet the targets we've established. Jeff Curry at Express-1, Brian Glaser at Express-1 Dedicated, Gerry Post at Concert Group Logistics and Tim Hindes at Bounce Logistics each lead a team of professionals that are committed to continuing the momentum we've established over the past twelve quarters," Welch said. "Market expansion and attention to customer service are critical to expanding our revenue. Our non-asset based business model has proven itself over many years and in all types of economic climates. We remain optimistic that we'll be able to deliver the results we committed to at the start of 2008. By remaining focused on our model and our goals, we should be able to continue growing our Company and our profits in future periods."
Conference Call/Webcast Information
Management will conduct a conference call November 6, 2008 at 10:00 a.m. Eastern to discuss the Company's third 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 (U.S.) or 201-689-8049 (International). A playback will be available through midnight on November 11, 2008. To listen to the playback, please call 877-660-6853. Use account number 286 and conference ID number 300248.
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 Sheets |
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(Unaudited) |
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| September 30, | December 31, | |||||||
| 2008 | 2007 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,868,000 | $ | 800,000 | ||||
| Accounts receivable, net of allowances of $212,000 and $77,000, respectively | 17,119,000 | 5,663,000 | ||||||
| Prepaid expenses | 238,000 | 492,000 | ||||||
| Other current assets | 887,000 | 149,000 | ||||||
| Deferred tax asset, current | 594,000 | 1,549,000 | ||||||
| Total current assets | 20,706,000 | 8,653,000 | ||||||
Property and equipment, net of $2,202,000 and $1,734,000 in accumulated depreciation, respectively |
3,226,000 | 2,312,000 | ||||||
| Goodwill | 16,040,000 | 7,737,000 | ||||||
Identified intangible assets, net of $1,586,000 and $1,279,000 in accumulated amortization, respectively |
6,647,000 | 3,950,000 | ||||||
| Loans and advances | 73,000 | 104,000 | ||||||
| Deferred tax asset, long term | - | 377,000 | ||||||
Other long term assets |
1,212,000 | 591,000 | ||||||
| $ | 47,904,000 | $ | 23,724,000 | |||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 6,176,000 | $ | 892,000 | ||||
| Accrued salaries and wages | 598,000 | 660,000 | ||||||
| Accrued acquisition earnouts | - | 2,210,000 | ||||||
| Accrued expenses, other | 2,225,000 | 861,000 | ||||||
| Current maturities of long term debt | 1,247,000 | 50,000 | ||||||
| Other current liabilities | 1,005,000 | 199,000 | ||||||
| Total current liabilities | 11,251,000 | 4,872,000 | ||||||
| Line of credit | 8,254,000 | - | ||||||
Notes payable and capital leases, net of current maturities |
1,700,000 | 34,000 | ||||||
| Deferred tax liability, long term | 250,000 | - | ||||||
| Other long-term liabilities | 527,000 | 616,000 | ||||||
| Total long-term liabilities | 10,731,000 | 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 | 26,298,000 | 21,152,000 | ||||||
| Accumulated deficit | (301,000 | ) | (2,870,000 | ) | ||||
| Treasury stock, at cost, 180,000 shares held | (107,000 | ) | (107,000 | ) | ||||
| Total stockholders' equity | 25,922,000 | 18,202,000 | ||||||
| $ | 47,904,000 | $ | 23,724,000 | |||||
| Express-1 Expedited Solutions, Inc. | |||||||||||||
| Consolidated Statements of Operations | |||||||||||||
| (Unaudited) | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
Sept. 30, |
Sept. 30, |
Sept. 30, |
Sept. 30, |
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| 2008 | 2007 | 2008 | 2007 | ||||||||||
| Revenues | |||||||||||||
| Operating revenue | $ | 32,438,000 | $ | 13,359,000 | $ | 88,369,000 | $ | 38,694,000 | |||||
| Expenses | |||||||||||||
| Direct expenses | 27,136,000 | 10,310,000 | 73,701,000 | 29,111,000 | |||||||||
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| Gross margin | 5,302,000 | 3,049,000 | 14,668,000 | 9,583,000 | |||||||||
Sales, general and administrative expense |
3,276,000 | 2,271,000 | 10,080,000 | 6,763,000 | |||||||||
| Income from operations | 2,026,000 | 778,000 | 4,588,000 | 2,820,000 | |||||||||
| Other expense (income) | 21,000 | (33,000 | ) | 36,000 | 1,000 | ||||||||
| Interest expense (income) | 94,000 | 13,000 | 273,000 | 71,000 | |||||||||
| Income before income tax provision | 1,911,000 | 798,000 | 4,279,000 | 2,748,000 | |||||||||
| Income tax provision | 759,000 | 299,000 | 1,710,000 | 1,034,000 | |||||||||
| Net income | $ | 1,152,000 | $ | 499,000 | $ | 2,569,000 | $ | 1,714,000 | |||||
| Earnings per common share | |||||||||||||
| Basic income per common share | 0.04 | 0.02 | 0.08 | 0.06 | |||||||||
| Diluted income per common share | 0.04 | 0.02 | 0.08 | 0.06 | |||||||||
| Weighted average common shares outstanding | |||||||||||||
| Basic weighted average common shares outstanding | 31,949,262 | 26,737,547 | 31,241,644 | 26,629,119 | |||||||||
| Diluted weighted average common shares outstanding | 32,093,521 | 27,321,640 | 31,182,990 | 27,349,458 | |||||||||
Included within the expenses above are depreciation and amortization of $288,000 and $198,000 for the three months ended September 30, 2008 and 2007, and $847,000 and $649,000 for the nine months ended September 30, 2008 and 2007, respectively. |
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| Express-1 Expedited Solutions, Inc. | ||||||||||||||||||||
| Summary Financial Table | ||||||||||||||||||||
| For the Three Months Ended September 30, | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Quarter to Date | Quarter to Quarter Change | Percent of Revenue | ||||||||||||||||||
| 2008 | 2007 | In Dollars | In Percentage | 2008 | 2007 | |||||||||||||||
| Revenues | ||||||||||||||||||||
| Express-1 | $ | 14,187,000 | $ | 12,052,000 | $ | 2,135,000 | 17.7 | % | 43.7 | % | 90.2 | % | ||||||||
| Express-1 Dedicated | 1,321,000 | 1,307,000 | 14,000 | 1.1 | % | 4.1 | % | 9.8 | % | |||||||||||
| Concert Group Logistics | 14,341,000 | - | 14,341,000 | - | 44.2 | % | - | |||||||||||||
| Bounce Logistics | 3,013,000 | - | 3,013,000 | - | 9.3 | % | - | |||||||||||||
| Intercompany Eliminations | (424,000 | ) | - | (424,000 | ) | - | -1.3 | % | - | |||||||||||
| Total Revenues | 32,438,000 | 13,359,000 | 19,079,000 | 142.8 | % | 100.0 | % | 100.0 | % | |||||||||||
| Direct Expenses | ||||||||||||||||||||
| Express-1 | 10,840,000 | 9,298,000 | 1,542,000 | 16.6 | % | 33.4 | % | 69.6 | % | |||||||||||
| Express-1 Dedicated | 972,000 | 1,012,000 | (40,000 | ) | -4.0 | % | 3.0 | % | 7.6 | % | ||||||||||
| Concert Group Logistics | 13,127,000 | - | 13,127,000 | - | 40.5 | % | - | |||||||||||||
| Bounce Logistics | 2,621,000 | - | 2,621,000 | - | 8.1 | % | - | |||||||||||||
| Intercompany Eliminations | (424,000 | ) | - | (424,000 | ) | - | -1.3 | % | - | |||||||||||
| Total Direct Expenses | 27,136,000 | 10,310,000 | 16,826,000 | 163.2 | % | 83.7 | % | 77.2 | % | |||||||||||
| Gross Margin | ||||||||||||||||||||
| Express-1 | 3,347,000 | 2,754,000 | 593,000 | 21.5 | % | 10.3 | % | 20.6 | % | |||||||||||
| Express-1 Dedicated | 349,000 | 295,000 | 54,000 | 18.3 | % | 1.1 | % | 2.2 | % | |||||||||||
| Concert Group Logistics | 1,214,000 | - | 1,214,000 | - | 3.7 | % | - | |||||||||||||
| Bounce Logistics | 392,000 | - | 392,000 | - | 1.2 | % | - | |||||||||||||
| Total Gross Margin | 5,302,000 | 3,049,000 | 2,253,000 | 73.9 | % | 16.3 | % | 22.8 | % | |||||||||||
| Selling, General & Administrative | ||||||||||||||||||||
| Express-1 | 1,610,000 | 1,790,000 | (180,000 | ) | -10.1 | % | 5.0 | % | 13.4 | % | ||||||||||
| Express-1 Dedicated | 128,000 | 117,000 | 11,000 | 9.4 | % | 0.4 | % | 0.9 | % | |||||||||||
| Concert Group Logistics | 714,000 | - | 714,000 | - | 2.2 | % | - | |||||||||||||
| Bounce Logistics | 390,000 | - | 390,000 | - | 1.2 | % | - | |||||||||||||
| Corporate | 434,000 | 364,000 | 70,000 | 19.2 | % | 1.3 | % | 2.7 | % | |||||||||||
| Total Selling, General & Administrative | 3,276,000 | 2,271,000 | 1,005,000 | 44.3 | % | 10.1 | % | 17.0 | % | |||||||||||
| Income From Operations | ||||||||||||||||||||
| Express-1 | 1,737,000 | 964,000 | 773,000 | 80.2 | % | 5.4 | % | 7.2 | % | |||||||||||
| Express-1 Dedicated | 221,000 | 178,000 | 43,000 | 24.2 | % | 0.7 | % | 1.3 | % | |||||||||||
| Concert Group Logistics | 500,000 | - | 500,000 | - | 1.5 | % | - | |||||||||||||
| Bounce Logistics | 2,000 | - | 2,000 | - | - | - | ||||||||||||||
| Corporate | (434,000 | ) | (364,000 | ) | (70,000 | ) | -19.2 | % | -1.3 | % | -2.7 | % | ||||||||
| Total Income From Operations | 2,026,000 | 778,000 | 1,248,000 | 160.4 | % | 6.2 | % | 5.8 | % | |||||||||||
| Interest Expense | 94,000 | 13,000 | 81,000 | 623.1 | % | 0.3 | % | 0.1 | % | |||||||||||
| Other Expense | 21,000 | (33,000 | ) | 54,000 | 163.6 | % | 0.1 | % | -0.2 | % | ||||||||||
Income Before Income Tax Provision |
1,911,000 | 798,000 | 1,113,000 | 139.5 | % | 5.9 | % | 6.0 | % | |||||||||||
Tax Provision |
759,000 | 299,000 | 460,000 | 153.8 | % | 2.3 | % | 2.2 | % | |||||||||||
| Total Net Income | $ | 1,152,000 | $ | 499,000 | $ | 653,000 | 130.9 | % | 3.6 | % | 3.7 | % | ||||||||
| Express-1 Expedited Solutions, Inc. | ||||||||||||||||||
| Summary Financial Table | ||||||||||||||||||
| For the Nine Months Ended September 30, | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| Year to Date - September | Year to Year Change | Percent of Revenue | ||||||||||||||||
| 2008 | 2007 | In Dollars | In Percentage | 2008 | 2007 | |||||||||||||
| Revenues | ||||||||||||||||||
| Express-1 | $ | 41,964,000 | $ | 34,902,000 | $ | 7,062,000 | 20.2 | % | 47.5 | % | 90.2 | % | ||||||
| Express-1 Dedicated | 3,861,000 | 3,792,000 | 69,000 | 1.8 | % | 4.4 | % | 9.8 | % | |||||||||
| Concert Group Logistics | 39,304,000 | - | 39,304,000 | - | 44.5 | % | - | |||||||||||
| Bounce Logistics | 4,241,000 | - | 4,241,000 | - | 4.8 | % | - | |||||||||||
| Intercompany Eliminations | (1,001,000 | ) | - | (1,001,000 | ) | - | -1.1 | % | - | |||||||||
| Total Revenues | 88,369,000 | 38,694,000 | 49,675,000 | 128.4 | % | 100.0 | % | 100.0 | % | |||||||||
| Direct Expenses | ||||||||||||||||||
| Express-1 | 32,145,000 | 26,138,000 | 6,007,000 | 23.0 | % | 36.4 | % | 67.6 | % | |||||||||
| Express-1 Dedicated | 3,006,000 | 2,973,000 | 33,000 | 1.1 | % | 3.4 | % | 7.7 | % | |||||||||
| Concert Group Logistics | 35,843,000 | - | 35,843,000 | - | 40.6 | % | - | |||||||||||
| Bounce Logistics | 3,708,000 | - | 3,708,000 | - | 4.2 | % | - | |||||||||||
| Intercompany Eliminations | (1,001,000 | ) | - | (1,001,000 | ) | - | -1.1 | % | - | |||||||||
| Total Direct Expenses | 73,701,000 | 29,111,000 | 44,590,000 | 153.2 | % | 83.4 | % | 75.2 | % | |||||||||
Gross Margin |
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| Express-1 | 9,819,000 | 8,764,000 | 1,055,000 | 12.0 | % | 11.1 | % | 22.6 | % | |||||||||
| Express-1 Dedicated | 855,000 | 819,000 | 36,000 | 4.4 | % | 1.0 | % | 2.1 | % | |||||||||
| Concert Group Logistics | 3,461,000 | - | 3,461,000 | - | 3.9 | % | - | |||||||||||
| Bounce Logistics | 533,000 | - | 533,000 | - | 0.6 | % | - | |||||||||||
| Total Gross Margin | 14,668,000 | 9,583,000 | 5,085,000 | 53.1 | % | 16.6 | % | 24.8 | % | |||||||||
| Selling, General & Administrative | ||||||||||||||||||
| Express-1 | 5,388,000 | 5,248,000 | 140,000 | 2.7 | % | 6.1 | % | 13.6 | % | |||||||||
| Express-1 Dedicated | 393,000 | 389,000 | 4,000 | 1.0 | % | 0.4 | % | 1.0 | % | |||||||||
| Concert Group Logistics | 2,322,000 | - | 2,322,000 | - | 2.6 | % | - | |||||||||||
| Bounce Logistics | 724,000 | - | 724,000 | - | 0.8 | % | - | |||||||||||
| Corporate | 1,253,000 | 1,126,000 | 127,000 | 11.3 | % | 1.4 | % | 2.9 | % | |||||||||
| Total Selling, General & Administrative | 10,080,000 | 6,763,000 | 3,317,000 | 49.0 | % | 11.4 | % | 17.5 | % | |||||||||
| Income From Operations | ||||||||||||||||||
| Express-1 | 4,431,000 | 3,516,000 | 915,000 | 26.0 | % | 5.0 | % | 9.1 | % | |||||||||
| Express-1 Dedicated | 462,000 | 430,000 | 32,000 | 7.4 | % | 0.5 | % | 1.1 | % | |||||||||
| Concert Group Logistics | 1,139,000 | - | 1,139,000 | - | 1.3 | % | - | |||||||||||
| Bounce Logistics | (191,000 | ) | - | (191,000 | ) | - | -0.2 | % | - | |||||||||
| Corporate | (1,253,000 | ) | (1,126,000 | ) | (127,000 | ) | -11.3 | % | -1.4 | % | -2.9 | % | ||||||
| Total Income From Operations | 4,588,000 | 2,820,000 | 1,768,000 | 62.7 | % | 5.2 | % | 7.3 | % | |||||||||
| Interest Expense | 273,000 | 71,000 | 202,000 | 284.5 | % | 0.3 | % | 0.2 | % | |||||||||
| Other Expense | 36,000 | 1,000 | 35,000 | -3500.0 | % | 0.0 | % | - | ||||||||||
Income Before Income Tax Provision |
4,279,000 | 2,748,000 | 1,531,000 | 55.7 | % | 4.8 | % | 7.1 | % | |||||||||
| Tax Provision | 1,710,000 | 1,034,000 | 676,000 | 65.4 | % | 1.9 | % | 2.7 | % | |||||||||
| Total Net Income | $ | 2,569,000 | $ | 1,714,000 | $ | 855,000 | 49.9 | % | 2.9 | % | 4.4 | % | ||||||
