Echo Global Logistics Reports Record Fourth Quarter Results; Revenue up 36% Year Over Year
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CHICAGO, IL -- (Marketwired) -- 02/04/16 -- Echo Global Logistics, Inc. (NASDAQ: ECHO), a leading provider of technology-enabled transportation management services, today reported financial results for the quarter and full year ended December 31, 2015.
"Echo delivered record fourth quarter and full year results in terms of top line revenue, net revenue and earnings," said Doug Waggoner, Chairman and Chief Executive Officer of Echo. "While the freight environment has been relatively soft, I am very pleased with our ability to continue to grow market share and expand net revenue margins, while focusing on servicing our shipper and carrier partners to drive value and enhance the Echo brand in the marketplace."
Full Year 2015 Highlights
- Total revenue increased by 29% to $1.51 billion from 2014
- Net revenue increased by 39% to $290 million (1)
- Non-GAAP EBITDA grew 37% to $68 million, or 42% to $70 million after excluding $2.3 million of Command integration costs (1)
- Non-GAAP fully-diluted EPS increased to $1.16 in 2015 (1)
- Truckload volume increased by 95% from 2014
Fourth Quarter 2015 Highlights
- Total revenue increased by 36% to $407 million from the fourth quarter of 2014
- Net revenue increased by 48% to $80 million from the fourth quarter of 2014 (1)
- Non-GAAP EBITDA grew 48% to $18.6 million, or 54% to $19.4 million after excluding $0.8 million of Command integration costs (1)
- Non-GAAP fully-diluted EPS increased to $0.28 in the fourth quarter of 2015 (1)
- Truckload volume increased by 131% from the fourth quarter of 2014
(1) Represents a non-GAAP financial measure. For a reconciliation of each non-GAAP financial measure to the nearest comparable GAAP financial measure, see the "Reconciliation of Non-GAAP Financial Measures" section of this Press Release.
Summarized financial results and select operating metrics follow:
Three months
Dollars in millions, ended Year ended
except per share data December 31, December 31,
% %
2015 2014 change 2015 2014 change
(unaudited) (unaudited)
--------------- ------ ----------------- ------
Revenue:
Transactional $ 337.3 $ 224.5 50.2% $1,225.3 $ 871.3 40.6%
Managed Transportation 69.9 75.5 -7.4% 287.0 302.1 -5.0%
------- ------- ------ -------- -------- ------
Total Revenue 407.2 300.0 35.7% 1,512.3 1,173.4 28.9%
Net revenue (1) 80.1 54.2 47.7% 290.3 208.2 39.4%
Non-GAAP Operating
expenses(1)
Commission expense 24.1 14.8 63.2% 86.0 57.7 49.0%
Non-GAAP selling, general
and administrative (1) 37.4 26.8 39.1% 136.5 101.0 35.1%
------- ------- ------ -------- -------- ------
Total Non-GAAP operating
expenses (1) 61.5 41.6 47.7% 222.5 158.7 40.1%
Non-GAAP EBITDA (1) 18.6 12.6 47.7% 67.8 49.5 37.1%
Depreciation 3.4 2.7 24.9% 12.4 9.9 24.7%
------- ------- ------ -------- -------- ------
Non-GAAP Operating
income(1) 15.2 9.9 53.9% 55.4 39.6 40.2%
Cash interest expense 1.6 -- -- 4.3 -- --
Other expense -- 0.0 -100.0% 0.2 0.3 -34.3%
------- ------- ------ -------- -------- ------
Non-GAAP Income before
taxes (1) 13.6 9.9 37.5% 51.0 39.3 29.7%
Income taxes 5.1 3.9 30.4% 18.5 15.1 22.2%
------- ------- ------ -------- -------- ------
Non-GAAP Net Income(1) $ 8.5 $ 6.0 42.1% $ 32.5 $ 24.2 34.3%
======= ======= ====== ======== ======== ======
------- ------- ------ -------- -------- ------
Non-GAAP Fully Diluted EPS
(1) $ 0.28 $ 0.25 11.3% $ 1.16 $ 1.02 12.9%
======= ======= ====== ======== ======== ======
Diluted shares 30.5 23.9 28.1 23.6
(1) See the "Reconciliation of Non-GAAP Financial Measures" and "Non-GAAP
Financial Measures" sections of this Press Release.
Reconciliation of Non-GAAP Financial Measures
Dollars in
millions, Three months
except per ended Year ended
share data December 31, December 31,
2015 2014 % change 2015 2014 % change
(unaudited) (unaudited)
-------------- ----------- ------------------ ---------
Total revenue $407.2 $300.0 35.7% $1,512.3 $1,173.4 28.9%
Transportation
costs 327.1 245.8 33.1% 1,222.0 965.2 26.6%
------ ------ ----------- -------- -------- ---------
Net revenue $ 80.1 $ 54.2 47.7% $ 290.3 $ 208.2 39.4%
------ ------ ----------- -------- -------- ---------
Non-GAAP
selling,
general and
administrative
expense $ 37.4 $ 26.8 39.1% $ 136.5 $ 101.0 35.1%
Commission
expense 24.1 14.8 63.2% 86.0 57.7 49.0%
Change in
contingent
consideration
payable 0.1 0.1 0.0% 0.2 2.2 -90.7%
Acquisition-
related
transaction
costs -- -- - 6.6 1.5 328.2%
Stock
compensation
expense 4.8 1.1 356.7% 14.0 4.4 218.3%
------ ------ ----------- -------- -------- ---------
Selling, general
and
administrative
expense $ 66.4 $ 42.8 55.3% $ 243.2 $ 166.8 45.8%
------ ------ ----------- -------- -------- ---------
Non-GAAP EBITDA $ 18.6 $ 12.6 47.7% $ 67.8 $ 49.5 37.1%
Change in
contingent
consideration
payable (0.1) (0.1) 0.0% (0.2) (2.2) -90.7%
Depreciation (3.4) (2.7) 24.9% (12.4) (9.9) 24.7%
Amortization (4.2) (1.1) 274.8% (11.7) (3.9) 199.0%
Acquisition-
related
transaction
costs -- -- - (6.6) (1.5) 328.2%
Noncash
interest
expense (1.8) -- - (4.9) -- -
Term Loan B
commitment
fees (non-
recurring
interest
expense) -- -- - (2.0) -- -
Stock
compensation
expense (4.8) (1.1) 356.7% (14.0) (4.4) 218.3%
Cash interest
expense (1.6) -- - (4.3) -- -
Other expense -- 0.0 -100.0% (0.2) (0.3) -34.3%
Income taxes (0.9) (3.0) -70.0% (3.7) (10.5) -64.9%
------ ------ ----------- -------- -------- ---------
Net income $ 1.7 $ 4.7 -62.6% $ 7.8 $ 16.8 -53.3%
------ ------ ----------- -------- -------- ---------
Non-GAAP EBITDA
margin 23.2% 23.2% (0) bps 23.4% 23.8% (40) bps
Effect of
change in
contingent
consideration
payable,
depreciation,
amortization,
acquisition-
related
transactions
costs and
stock
compensation
expense -15.6% -9.1% (647) bps -15.5% -10.6% (493) bps
------ ------ ----------- -------- -------- ---------
Operating margin
(% of net
revenue) 7.6% 14.1% (647) bps 7.9% 13.2% (533) bps
------ ------ ----------- -------- -------- ---------
Non-GAAP
operating
income $ 15.2 $ 9.9 53.9% $ 55.4 $ 39.6 40.2%
Change in
contingent
consideration
payable (0.1) (0.1) 0.0% (0.2) (2.2) -90.7%
Amortization (4.2) (1.1) 274.8% (11.7) (3.9) 199.0%
Acquisition-
related
transaction
costs -- -- - (6.6) (1.5) 328.2%
Stock
compensation
expense (4.8) (1.1) 356.7% (14.0) (4.4) 218.3%
------ ------ ----------- -------- -------- ---------
Operating income $ 6.1 $ 7.6 -20.2% $ 22.9 $ 27.5 -16.8%
------ ------ ----------- -------- -------- ---------
Non-GAAP net
income $ 8.5 $ 6.0 42.1% $ 32.5 $ 24.2 34.3%
Change in
contingent
consideration
payable (0.1) (0.1) 0.0% (0.2) (2.2) -90.7%
Amortization (4.2) (1.1) 274.8% (11.7) (3.9) 199.0%
Acquisition-
related
transaction
costs -- -- - (6.6) (1.5) 328.2%
Noncash
interest
expense (1.8) -- - (4.9) -- -
Term Loan B
commitment
fees (non-
recurring
interest
expense) -- -- - (2.0) -- -
Stock
compensation
expense (4.8) (1.1) 356.7% (14.0) (4.4) 218.3%
Income Taxes 4.1 0.9 374.0% 14.8 4.6 220.2%
------ ------ ----------- -------- -------- ---------
Net income $ 1.7 $ 4.7 -62.6% $ 7.8 $ 16.8 -53.3%
------ ------ ----------- -------- -------- ---------
Non-GAAP fully
diluted EPS $ 0.28 $ 0.25 11.3% $ 1.16 $ 1.02 12.9%
Effect of
change in
contingent
consideration
payable,
amortization,
acquisition-
related
transaction
costs, non
cash interest
expense, Term
Loan B
commitment
fees and stock
compensation
expense, net
of tax (0.22) (0.05) 291.7% (0.88) (0.31) 179.8%
------ ------ ----------- -------- -------- ---------
Fully diluted
EPS $ 0.06 $ 0.20 -70.7% $ 0.28 $ 0.71 -60.7%
====== ====== =========== ======== ======== =========
Operating
Metrics
Net revenue
margin 19.7% 18.1% 159 bps 19.2% 17.7% 145 bps
Non-GAAP EBITDA
margin (% of
net revenue)
(1) 23.2% 23.2% -- bps 23.4% 23.8% (40) bps
Total employees 2,335 1,734 34.1% 2,335 1,734 34.1%
Sales employees
and agents 1,620 1,122 43.6% 1,620 1,122 43.6%
Truckload (TL)
revenue % 68.4% 53.5% 1,490 bps 63.8% 52.8% 1,107 bps
Less Than
Truckload
(LTL) revenue
% 25.3% 36.5% (1,116) bps 29.4% 36.8% (738) bps
Intermodal
revenue % 4.5% 5.9% (144) bps 4.9% 6.1% (116) bps
(1) See the "Non-GAAP Financial Measures" section of this Press Release for
the definition and a discussion of each Non-GAAP financial measure.
2016 Full Year Guidance
"We expect full year 2016 total revenue to be in the range of $1.80 billion to $1.88 billion," said Kyle Sauers, Chief Financial Officer of Echo. "This range reflects revenue growth in the range of 19% to 24% over 2015, which implies significant volume growth in light of the decrease in fuel prices."
Conference Call
A conference call, with accompanying presentation slides, will be broadcast live on February 4, 2016 at 4:00 p.m. Central Time (5:00 p.m. Eastern Time). Doug Waggoner, Chairman and Chief Executive Officer, Dave Menzel, President and Chief Operating Officer, and Kyle Sauers, Chief Financial Officer, will host the call. To participate in the call, dial 877-303-6235 (toll free) or 631-291-4837 (toll) and reference "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. To listen to an audio replay, call 855-859-2056 (toll free) or 404-537-3406 (toll) and enter conference ID 27700340. The audio replay will be available through February 11, 2016.
Non-GAAP Financial Measures
This release includes the following financial measures defined as "Non-GAAP financial measures" by the Securities and Exchange Commission (the "SEC"): Net Revenue, Non-GAAP selling, general and administrative expense, Non-GAAP EBITDA, Non-GAAP EBITDA Margin, Non-GAAP Operating Income, Non-GAAP Net Income and Non-GAAP Fully Diluted EPS. Net revenue is calculated as total revenue less transportation costs. Non-GAAP selling, general and administrative expense is defined as selling, general and administrative expense excluding commission expense, changes in contingent consideration payable, acquisition-related transaction costs and stock compensation expense. Non-GAAP EBITDA and Non-GAAP EBITDA Margin are defined as net income and operating margin, respectively, excluding the effects of changes in contingent consideration payable, depreciation, amortization, acquisition-related transaction costs, stock compensation expense, cash and noncash interest expense, other expense, Term Loan B commitment fees and income taxes. Non-GAAP operating income is defined as operating income excluding changes in contingent consideration payable, amortization, acquisition-related transaction costs, and stock compensation expense. Non-GAAP net income is defined as net income excluding changes in contingent consideration payable, amortization, acquisition-related transaction costs, stock compensation expense, noncash interest expense and Term Loan B commitment fees, net of their related tax impact. Non-GAAP Fully Diluted EPS is defined as fully diluted EPS excluding changes in contingent consideration payable, amortization, acquisition-related transaction costs, noncash interest expense, stock compensation expense, Term Loan B commitment fees, net of their related tax impact. We believe such measures provide useful information to investors because they provide information about the financial performance of the Company's ongoing business.
Net Revenue, Non-GAAP selling, general and administrative expense, Non-GAAP EBITDA, Non-GAAP EBITDA Margin, Non-GAAP Operating Income, 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 of Non-GAAP Financial Measures" 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 our Annual Report on Form 10-K for the year ended December 31, 2014 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015 and June 30, 2015.
Echo Global Logistics, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended Twelve Months Ended
December 31, December 31,
2015 2014 2015 2014
(Unaudited) (Unaudited)
-------------------------- -------------- --------------
REVENUE $407,171,455 $300,026,847 $1,512,298,686 $1,173,382,760
COSTS AND
EXPENSES
Transportation
costs 327,079,650 245,787,063 1,222,035,371 965,165,330
Selling,
general, and
administrative
expenses 66,417,277 42,779,249 243,214,264 166,812,670
Depreciation
and
amortization 7,570,294 3,815,780 24,142,527 13,876,079
------------ ------------ -------------- --------------
INCOME FROM
OPERATIONS 6,104,234 7,644,755 22,906,524 27,528,681
INTEREST / OTHER
EXPENSE (3,473,157) (17,234) (11,378,593) (249,532)
------------ ------------ -------------- --------------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 2,631,077 7,627,521 11,527,931 27,279,149
INCOME TAX
EXPENSE (890,257) (2,971,743) (3,682,257) (10,491,591)
------------ ------------ -------------- --------------
NET INCOME $ 1,740,820 $ 4,655,778 $ 7,845,674 $ 16,787,558
============ ============ ============== ==============
Basic net income
per share $ 0.06 $ 0.20 $ 0.29 $ 0.73
Diluted net
income per
share $ 0.06 $ 0.20 $ 0.28 $ 0.71
Echo Global Logistics, Inc.
Condensed Consolidated Balance Sheets
December 31, December 31,
2015 2014
(unaudited)
-------------- --------------
Cash and cash equivalents $ 56,522,194 $ 32,542,119
Accounts receivable, net of allowance for
doubtful accounts 196,420,614 145,198,419
Other current assets 7,881,156 7,927,049
Total noncurrent assets 485,685,818 130,376,607
-------------- --------------
Total assets $ 746,509,782 $ 316,044,194
============== ==============
Accounts payable $ 103,985,783 $ 85,999,784
Other current liabilities 33,406,353 41,246,588
Convertible notes, net 196,659,354 -
Other noncurrent liabilities 17,208,718 6,923,644
Stockholders' equity 395,249,574 181,874,178
-------------- --------------
Total liabilities and stockholders' equity $ 746,509,782 $ 316,044,194
-------------- --------------
Echo Global Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
Twelve Months Ended
December 31,
2015 2014
(Unaudited)
-------------- --------------
Net cash provided by operating activities $ 70,836,456 $ 32,362,545
Net cash used in investing activities (405,139,891) (48,923,687)
Net cash provided by (used in) financing
activities 358,283,510 (3,403,299)
-------------- --------------
Increase (Decrease) in cash and cash
equivalents 23,980,075 (19,964,441)
Cash and cash equivalents, beginning of
period 32,542,119 52,506,560
-------------- --------------
Cash and cash equivalents, end of period $ 56,522,194 $ 32,542,119
-------------- --------------
About Echo Global Logistics
Echo Global Logistics, Inc. (NASDAQ: ECHO) is a leading provider of technology-enabled transportation and supply chain management services. Headquartered in Chicago with more than 30 offices around the country, Echo offers freight brokerage and Managed Transportation solutions for all major modes, including TL, partial TL, LTL, intermodal, and expedited. Echo maintains a proprietary, web-based technology platform that compiles and analyzes data from its network of over 30,000 transportation providers to serve clients across a wide range of industries and simplify the critical tasks involved in transportation management. For more information on Echo Global Logistics, visit: www.echo.com.
ECHO: Earnings
INVESTOR RELATIONS CONTACTS: Kyle Sauers Chief Financial Officer Echo Global Logistics 312-784-7695 Zach Jecklin Director of Finance Echo Global Logistics 312-784-2046 MEDIA CONTACT: Christopher Clemmensen SVP of Marketing Echo Global Logistics 312-784-2132
Source: Echo Global Logistics
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