Echo Global Logistics Reports Fourth Quarter and Full Year 2019 Results
CHICAGO, Feb. 5, 2020 /PRNewswire/ -- 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, 2019.
"I'm proud of the results we posted this year in light of the challenging freight market, triggered by excess truckload capacity throughout much of the year. I am particularly excited about the year over year volume growth we've seen in early January, and believe the freight cycle will improve in 2020," said Doug Waggoner, Chairman of the Board of Directors and Chief Executive Officer at Echo. "Entering 2020 we will continue to invest in technology to drive interactions with our shippers and carriers, while improving efficiency for our employees."
Fourth Quarter 2019 Highlights
-- Revenue decreased 8.8% to $531.7 million from the fourth quarter of
2018; net revenue((1)) decreased 12.4% to $89.7 million from the fourth
quarter of 2018
-- Transactional revenue decreased 8.5% to $411.2 million and Managed
Transportation revenue decreased 9.8% to $120.5 million from the fourth
quarter of 2018
-- Net income decreased to $1.4 million, compared to $6.9 million in the
fourth quarter of 2018
-- Fully diluted EPS decreased to $0.05 in the fourth quarter of 2019;
non-GAAP fully diluted EPS((1)) decreased to $0.26 in the fourth quarter
of 2019
-- Adjusted EBITDA((1) )decreased to $17.5 million, compared to $25.6
million in the fourth quarter of 2018
Full Year 2019 Highlights
-- Revenue decreased 10.4% to $2.2 billion from 2018; net revenue((1))
decreased 8.2% to $386 million from 2018
-- Transactional revenue decreased 12.0% to $1.7 billion and Managed
Transportation revenue decreased 4.6% to $500 million from 2018
-- Net revenue margin((1)) increased to 17.7% in 2019 from 17.2% in 2018
-- Net income decreased to $14.8 million, compared to $28.7 million in 2018
-- Fully diluted EPS decreased to $0.55 in 2019; non-GAAP fully diluted
EPS((1) )decreased to $1.45 in 2019
-- Adjusted EBITDA((1)) decreased to $84.1 million, compared to $100.2
million in 2018
________________________
(1)
Represents a non-
GAAP financial measure. For the definition
and a discussion of each non-GAAP
financial measure contained in this
release, see "Non-GAAP Financial
Measures." 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 Ended December 31,
Year Ended December 31,
2019 2018 % change 2019 2018 % change
Dollars in millions,
except per share data (unaudited) (unaudited)
Transactional revenue $
411.2 $
449.3 (8.5) $
1,684.9 $
1,915.6 (12.0)
% %
Managed Transportation 120.5 133.6 (9.8) 500.1 524.1 (4.6)
revenue % %
Revenue 531.7 583.0 (8.8) 2,185.0 2,439.7 (10.4)
% %
Transportation costs 442.0 480.5 (8.0) 1,798.9 2,019.3 (10.9)
% %
Net revenue (1) 89.7 102.4 (12.4) 386.0 420.4 (8.2)
% %
Commission expense 26.8 31.1 (13.8) 117.0 126.8 (7.8)
% %
Change in contingent 0.5 0.3 95.0 1.1 0.4 156.2
consideration % %
Acquisition-related 0.0 (100.0) 0.3 (100.0)
transaction costs % %
Stock compensation 2.4 2.2 10.6 10.2 9.3 9.7
expense % %
Other selling, general 45.3 45.7 (0.9) 184.9 193.4 (4.4)
and administrative % %
Selling, general and 75.1 79.3 (5.3) 313.1 330.2 (5.2)
administrative
expense
% %
Depreciation 6.7 6.2 8.6 26.6 23.6 12.6
% %
Amortization 2.8 3.3 (14.4) 11.8 13.0 (9.4)
% %
Depreciation and 9.5 9.5 0.7 38.4 36.6 4.8
amortization
% %
Income from operations 5.1 13.7 (62.9) 34.5 53.6 (35.6)
% %
Cash interest expense 1.3 1.5 (18.1) 5.3 6.5 (18.2)
% %
Non-cash interest 1.6 2.7 (41.7) 7.3 9.1 (19.1)
expense % %
Interest expense, net 2.8 4.3 (33.1) 12.6 15.5 (18.7)
% %
Income before 2.2 9.4 (76.3) 21.9 38.0 (42.5)
provision for income
taxes
% %
Income tax expense (0.8) (2.5) (68.2) (7.0) (9.3) (24.4)
% %
Net income $
1.4 $
6.9 (79.3) $
14.8 $
28.7 (48.3)
% %
Fully diluted EPS $
0.05 $
0.25 (78.2) $
0.55 $
1.03 (46.2)
% %
Diluted shares 26.6 27.9 26.8 27.9
Note: Amounts may not foot due to
rounding.
(1)
See the
"Reconciliation of Non-GAAP
Financial Measures" and "Non-GAAP
Financial Measures" sections of this
Press Release.
Three Months Ended December 31,
Year Ended December 31,
Reconciliation of Non-
GAAP Financial
Measures 2019 2018 % change 2019 2018 % change
Dollars in millions,
except per share data
(unaudited)
(unaudited)
Revenue $
531.7 $
583.0 (8.8) $
2,185.0 $
2,439.7 (10.4)
% %
Transportation costs 442.0 480.5 (8.0) 1,798.9 2,019.3 (10.9)
% %
Net revenue (1) $
89.7 $
102.4 (12.4) $
386.0 $
420.4 (8.2)
% %
Net income $
1.4 $
6.9 (79.3) $
14.8 $
28.7 (48.3)
% %
Depreciation 6.7 6.2 8.6 26.6 23.6 12.6
% %
Amortization 2.8 3.3 (14.4) 11.8 13.0 (9.4)
% %
Non-cash interest 1.6 2.7 (41.7) 7.3 9.1 (19.1)
expense % %
Cash interest expense 1.3 1.5 (18.1) 5.3 6.5 (18.2)
% %
Income tax expense 0.8 2.5 (68.2) 7.0 9.3 (24.4)
% %
EBITDA (1) $
14.6 $
23.1 (36.9) $
72.9 $
90.2 (19.2)
% %
Acquisition-related 0.0 (100.0) 0.3 (100.0)
transaction costs % %
Change in contingent 0.5 0.3 95.0 1.1 0.4 156.2
consideration % %
Stock compensation 2.4 2.2 10.6 10.2 9.3 9.7
expense % %
Adjusted EBITDA (1) $
17.5 $
25.6 (31.5) $
84.1 $
100.2 (16.0)
% %
Fully diluted EPS $
0.05 $
0.25 (78.2) $
0.55 $
1.03 (46.2)
% %
Change in contingent 0.02 0.01 104.7 0.04 0.01 166.7
consideration % %
Amortization 0.11 0.12 (10.1) 0.44 0.47 (5.6)
% %
Acquisition-related 0.00 (100.0) 0.01 (100.0)
transaction costs % %
Non-cash interest 0.06 0.10 (38.8) 0.27 0.33 (15.8)
expense % %
Stock compensation 0.09 0.08 16.1 0.38 0.33 14.2
expense % %
Tax effect of (0.07) (0.08) (11.9) (0.23) (0.30) (21.6)
adjustments % %
Non-GAAP fully $
0.26 $
0.47 (44.9) $
1.45 $
1.88 (22.7)
diluted EPS (1)
% %
Operating Metrics
Net revenue margin(1) 16.9 17.6 (70)
bps 17.7 17.2
% % % % 44 bps
Total employees 2,539 2,595 (2.2) 2,539 2,595 (2.2)
% %
Sales employees and 1,669 1,716 (2.7) 1,669 1,716 (2.7)
agents % %
Truckload (TL) revenue 66.2 68.0 (176)
bps 65.8 69.1
% % % % % (333) bps
Less than Truckload 29.9 28.2 172
bps 29.6 26.2
(LTL) revenue % % % % % 343 bps
Note: Amounts may not
foot due to rounding.
(1)
See the "Non-GAAP Financial
Measures" section of this
Press Release for the
definition and a discussion
of each Non-GAAP financial
measure.
2020 Full Year and First Quarter Guidance
"We expect full year 2020 revenue to be in the range of $2.25 billion to $2.45 billion," said Kyle Sauers, Chief Financial Officer of Echo. "We also expect first quarter revenue to be between $530 million and $570 million."
Conference Call
A conference call, with accompanying presentation slides, will be broadcast live on February 5, 2020 at 4:00 p.m. Central Time (5:00 p.m. Eastern Time). Doug Waggoner, Chairman of the Board of Directors 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 5145418. The audio replay will be available through February 12, 2020.
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, net revenue margin, EBITDA, Adjusted EBITDA and Non-GAAP fully diluted EPS. Net revenue is calculated as revenue less transportation costs. Net revenue margin is calculated as net revenue (as previously defined) divided by revenue. EBITDA is defined as net income excluding the effects of depreciation, amortization, cash and non-cash interest expense and income taxes. Adjusted EBITDA is defined as EBITDA (as previously defined) excluding the effects of acquisition-related transaction costs, changes in contingent consideration and stock compensation expense. Non-GAAP fully diluted EPS is defined as fully diluted EPS excluding changes in contingent consideration, amortization, acquisition-related transaction costs, non-cash interest expense, stock compensation expense and the tax effect of these adjustments. 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, net revenue margin, EBITDA, Adjusted EBITDA 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
All statements made in this release, other than statements of historical fact, are or may be deemed to be forward-looking statements. 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. These statements are based on current plans and expectations of Echo Global Logistics and involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be different from any future results, performance or achievements expressed or implied by these statements. Information concerning these risks, uncertainties and other factors is contained under the headings "Risk Factors" and "Forward-Looking Statements" and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2018, and other filings with the SEC.
Echo Global Logistics, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended December 31, Year Ended December 31,
2019 2018 2019 2018
In thousands, except per
share data
(unaudited) (unaudited)
Revenue $
531,677 $
582,978 $
2,184,977 $
2,439,701
Costs and expenses:
Transportation costs 441,995 480,546 1,798,944 2,019,337
Selling, general and
administrative expenses 75,074 79,289 313,129 330,160
Depreciation and
amortization 9,532 9,470 38,387 36,638
Income from operations 5,076 13,673 34,517 53,566
Interest expense, net (2,850) (4,262) (12,639) (15,546)
Income before provision
for income taxes 2,226 9,411 21,878 38,020
Income tax expense (787) (2,475) (7,032) (9,296)
Net income $
1,439 $
6,935 $
14,846 $
28,723
Basic EPS $
0.05 $
0.25 $
0.56 $
1.04
Diluted EPS $
0.05 $
0.25 $
0.55 $
1.03
Note: Amounts may not foot due to
rounding.
Echo Global Logistics, Inc.
Condensed Consolidated Balance Sheets
December 31, 2019 December 31, 2018
In thousands (unaudited)
Cash and cash
equivalents $
34,626 $
40,281
Accounts receivable,
net of allowance for
doubtful accounts 286,989 337,426
Other current assets 14,578 16,025
Total noncurrent
assets 490,473 484,593
Total assets $
826,666 $
878,325
Accounts payable $
187,524 $
216,280
Other current
liabilities 42,885 50,627
Convertible notes, net 156,298 183,168
Other noncurrent
liabilities 56,646 38,319
Stockholders' equity 383,312 389,932
Total liabilities and
stockholders' equity $
826,666 $
878,325
Note: Amounts may not foot due to
rounding.
Echo Global Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
Year Ended December 31,
2019 2018
In thousands (unaudited)
Net cash
provided by
operating
activities $
84,532 $
94,245
Net cash used in
investing
activities (23,959) (31,821)
Net cash used in
financing
activities (66,229) (45,657)
(Decrease)
Increase in
cash and cash
equivalents (5,656) 16,766
Cash and cash
equivalents,
beginning of
period 40,281 23,515
Cash and cash
equivalents,
end of period $
34,626 $
40,281
Note: Amounts may not foot due
to rounding.
About Echo Global Logistics
Echo Global Logistics, Inc. (NASDAQ: ECHO) is a leading Fortune 1000 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 truckload, partial truckload, LTL, intermodal and expedited. Echo maintains a proprietary, web-based technology platform that compiles and analyzes data from its network of over 50,000 transportation providers to serve 35,000 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
SVP of Strategy
Echo Global Logistics
312-784-2046
MEDIA CONTACT:
Christopher Clemmensen
SVP of Marketing
Echo Global Logistics
312-784-2132
View original content to download multimedia:http://www.prnewswire.com/news-releases/echo-global-logistics-reports-fourth-quarter-and-full-year-2019-results-300999704.html
SOURCE Echo Global Logistics, Inc.
