CHICAGO, Feb. 06, 2019 (GLOBE NEWSWIRE) -- 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, 2018.
"This quarter capped a fantastic year for Echo with records in revenue, volume and profitability. In a fast changing freight environment, we demonstrated the flexibility of our model and the ability to gain operating leverage while bringing great value to our shippers and carriers," said Doug Waggoner, Chairman of the Board of Directors and Chief Executive Officer at Echo. "As we enter 2019, we will continue to invest in our technology and people to drive operational efficiencies and bring high service levels to shippers and carriers."
Fourth Quarter 2018 Highlights
- Revenue increased 6.4% to $583.0 million from the fourth quarter of 2017
- Truckload (includes Partial TL) ("TL") revenue increased 4.3% and less than truckload ("LTL") revenue increased 16.4% from the fourth quarter of 2017
- Transactional revenue increased 3.7% to $449.3 million and Managed Transportation revenue increased 16.7% to $133.6 million from the fourth quarter of 2017
- Net revenue(1) increased 6.4% to $102.4 million from the fourth quarter of 2017
- Net income was $6.9 million in the fourth quarter of 2018, compared to $13.3 million in the fourth quarter of 2017, which included an $8.9 million income tax benefit resulting from the Tax Cuts and Jobs Act ("TCJA")
- Fully diluted EPS decreased to $0.25 in the fourth quarter of 2018; non-GAAP fully diluted EPS(1) increased to $0.47 in the fourth quarter of 2018
- Adjusted EBITDA(1) grew 21.8% to $25.6 million, compared to $21.0 million in the fourth quarter of 2017
Full Year 2018 Highlights
- Revenue increased 25.6% to $2.44 billion from 2017
- TL revenue increased 27.5% and LTL revenue increased 22.6% from 2017
- Transactional revenue increased 24.5% to $1.92 billion and Managed Transportation revenue increased 29.6% to $524.1 million from 2017
- Net revenue(1) increased 24.0% to $420.4 million from 2017
- Net income increased 127.5% to $28.7 million from 2017
- Fully diluted EPS increased to $1.03 in 2018; non-GAAP fully diluted EPS(1) increased to $1.88 in 2018
- Adjusted EBITDA(1) grew 62.1% to $100.2 million, compared to $61.8 million in 2017
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(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, | ||||||||||||||||||||||
| 2018 | 2017 | % change | 2018 | 2017 | % change | ||||||||||||||||||
| Dollars in millions, except per share data | (unaudited) | (unaudited) | |||||||||||||||||||||
| Transactional revenue | $ | 449.3 | $ | 433.2 | 3.7 | % | $ | 1,915.6 | $ | 1,538.8 | 24.5 | % | |||||||||||
| Managed Transportation revenue | 133.6 | 114.5 | 16.7 | % | 524.1 | 404.3 | 29.6 | % | |||||||||||||||
| Revenue | 583.0 | 547.7 | 6.4 | % | 2,439.7 | 1,943.1 | 25.6 | % | |||||||||||||||
| Transportation costs | 480.5 | 451.5 | 6.4 | % | 2,019.3 | 1,604.0 | 25.9 | % | |||||||||||||||
| Net revenue (1) | 102.4 | 96.2 | 6.4 | % | 420.4 | 339.0 | 24.0 | % | |||||||||||||||
| Commission expense | 31.1 | 29.5 | 5.3 | % | 126.8 | 103.1 | 23.0 | % | |||||||||||||||
| Change in contingent consideration | 0.3 | 0.4 | (35.2 | ) | % | 0.4 | 1.0 | (58.6 | ) | % | |||||||||||||
| Acquisition-related transaction costs | 0.0 | — | 100.0 | % | 0.3 | — | 100.0 | % | |||||||||||||||
| Stock compensation expense | 2.2 | 1.9 | 15.2 | % | 9.3 | 9.0 | 3.0 | % | |||||||||||||||
| Other selling, general and administrative | 45.7 | 45.7 | 0.1 | % | 193.4 | 174.1 | 11.0 | % | |||||||||||||||
| Selling, general and administrative expense | 79.3 | 77.5 | 2.3 | % | 330.2 | 287.2 | 14.9 | % | |||||||||||||||
| Depreciation | 6.2 | 5.1 | 22.8 | % | 23.6 | 18.5 | 27.8 | % | |||||||||||||||
| Amortization | 3.3 | 3.5 | (7.6 | ) | % | 13.0 | 14.2 | (8.6 | ) | % | |||||||||||||
| Depreciation and amortization | 9.5 | 8.6 | 10.3 | % | 36.6 | 32.7 | 11.9 | % | |||||||||||||||
| Income from operations | 13.7 | 10.1 | 35.0 | % | 53.6 | 19.1 | 180.7 | % | |||||||||||||||
| Cash interest expense | 1.5 | 1.7 | (9.0 | ) | % | 6.5 | 6.7 | (3.0 | ) | % | |||||||||||||
| Non-cash interest expense | 2.7 | 2.1 | 31.8 | % | 9.1 | 8.1 | 12.5 | % | |||||||||||||||
| Interest expense, net | 4.3 | 3.8 | 13.4 | % | 15.5 | 14.7 | 5.5 | % | |||||||||||||||
| Income before provision for income taxes | 9.4 | 6.4 | 47.7 | % | 38.0 | 4.3 | 774.1 | % | |||||||||||||||
| Income tax (expense) benefit | (2.5 | ) | 7.0 | NM | (9.3 | ) | 8.3 | NM | |||||||||||||||
| Net income | $ | 6.9 | $ | 13.3 | (48.0 | ) | % | $ | 28.7 | $ | 12.6 | 127.5 | % | ||||||||||
| Fully diluted EPS | $ | 0.25 | $ | 0.48 | (48.5 | ) | % | $ | 1.03 | $ | 0.45 | 128.4 | % | ||||||||||
| Diluted shares | 27.9 | 27.6 | 27.9 | 28.0 | |||||||||||||||||||
| 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 | 2018 | 2017 | % change | 2018 | 2017 | % change | ||||||||||||||||||
| Dollars in millions, except per share data | (unaudited) | (unaudited) | ||||||||||||||||||||||
| Revenue | $ | 583.0 | $ | 547.7 | 6.4 | % | $ | 2,439.7 | $ | 1,943.1 | 25.6 | % | ||||||||||||
| Transportation costs | 480.5 | 451.5 | 6.4 | % | 2,019.3 | 1,604.0 | 25.9 | % | ||||||||||||||||
| Net revenue (1) | $ | 102.4 | $ | 96.2 | 6.4 | % | $ | 420.4 | $ | 339.0 | 24.0 | % | ||||||||||||
| Net income | $ | 6.9 | $ | 13.3 | (48.0 | ) | % | $ | 28.7 | $ | 12.6 | 127.5 | % | |||||||||||
| Depreciation | 6.2 | 5.1 | 22.8 | % | 23.6 | 18.5 | 27.8 | % | ||||||||||||||||
| Amortization | 3.3 | 3.5 | (7.6 | ) | % | 13.0 | 14.2 | (8.6 | ) | % | ||||||||||||||
| Non-cash interest expense | 2.7 | 2.1 | 31.8 | % | 9.1 | 8.1 | 12.5 | % | ||||||||||||||||
| Cash interest expense | 1.5 | 1.7 | (9.0 | ) | % | 6.5 | 6.7 | (3.0 | ) | % | ||||||||||||||
| Remeasurement of net deferred tax liability resulting from the TCJA | — | (8.9 | ) | (100.0 | ) | % | — | (8.9 | ) | (100.0 | ) | % | ||||||||||||
| Income tax expense | 2.5 | 2.0 | 25.8 | % | 9.3 | 0.7 | 1,284.9 | % | ||||||||||||||||
| EBITDA (1) | $ | 23.1 | $ | 18.7 | 23.6 | % | $ | 90.2 | $ | 51.8 | 74.1 | % | ||||||||||||
| Acquisition-related transaction costs | 0.0 | — | 100.0 | % | 0.3 | — | 100.0 | % | ||||||||||||||||
| Change in contingent consideration | 0.3 | 0.4 | (35.2 | ) | % | 0.4 | 1.0 | (58.6 | ) | % | ||||||||||||||
| Stock compensation expense | 2.2 | 1.9 | 15.2 | % | 9.3 | 9.0 | 3.0 | % | ||||||||||||||||
| Adjusted EBITDA (1) | $ | 25.6 | $ | 21.0 | 21.8 | % | $ | 100.2 | $ | 61.8 | 62.1 | % | ||||||||||||
| Fully diluted EPS | $ | 0.25 | $ | 0.48 | (48.5 | ) | % | $ | 1.03 | $ | 0.45 | 128.4 | % | |||||||||||
| Change in contingent consideration | 0.01 | 0.01 | (35.7 | ) | % | 0.01 | 0.04 | (58.5 | ) | % | ||||||||||||||
| Amortization | 0.12 | 0.13 | (8.4 | ) | % | 0.47 | 0.51 | (8.3 | ) | % | ||||||||||||||
| Acquisition-related transaction costs | 0.00 | — | 100.0 | % | 0.01 | — | 100.0 | % | ||||||||||||||||
| Non-cash interest expense | 0.10 | 0.07 | 30.6 | % | 0.33 | 0.29 | 13.0 | % | ||||||||||||||||
| Stock compensation expense | 0.08 | 0.07 | 14.2 | % | 0.33 | 0.32 | 3.3 | % | ||||||||||||||||
| Remeasurement of net deferred tax liability resulting from the TCJA | — | (0.32 | ) | (100.0 | ) | % | — | (0.32 | ) | (100.0 | ) | % | ||||||||||||
| Tax effect of adjustments | (0.08 | ) | (0.12 | ) | 31.9 | % | (0.30 | ) | (0.43 | ) | 30.4 | % | ||||||||||||
| Non-GAAP fully diluted EPS (1) | $ | 0.47 | $ | 0.33 | 43.3 | % | $ | 1.88 | $ | 0.86 | 119.2 | % | ||||||||||||
| Operating Metrics | ||||||||||||||||||||||||
| Net revenue margin | 17.6 | % | 17.6 | % | 0 | bps | 17.2 | % | 17.4 | % | (22 | ) | bps | |||||||||||
| Total employees | 2,595 | 2,453 | 5.8 | % | 2,595 | 2,453 | 5.8 | % | ||||||||||||||||
| Sales employees and agents | 1,716 | 1,641 | 4.6 | % | 1,716 | 1,641 | 4.6 | % | ||||||||||||||||
| Truckload (TL) revenue % | 68.0 | % | 69.4 | % | (136 | ) | bps | 69.1 | % | 68.1 | % | 107 | bps | |||||||||||
| Less than truckload (LTL) revenue % | 28.2 | % | 25.8 | % | 241 | bps | 26.2 | % | 26.8 | % | (62 | ) | 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. | ||||||||||||||||||||||||
2019 Full Year and First Quarter Guidance
"We expect full year 2019 revenue to be in the range of $2.35 billion to $2.55 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 6, 2019 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 5155959. The audio replay will be available through February 13, 2019.
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, EBITDA, Adjusted EBITDA and Non-GAAP fully diluted EPS. Net revenue is calculated as revenue less transportation costs. EBITDA is defined as net income excluding the effects of changes in depreciation, amortization, cash and non-cash interest expense, interest income, remeasurement of the net deferred tax liability resulting from the TCJA 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. 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, remeasurement of the net deferred tax liability resulting from the TCJA 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, 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, 2017, and other filings with the SEC.
| Echo Global Logistics, Inc. | |||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| In thousands, except per share data | (unaudited) | (unaudited) | |||||||||||||
| Revenue | $ | 582,978 | $ | 547,718 | $ | 2,439,701 | $ | 1,943,086 | |||||||
| Costs and expenses: | |||||||||||||||
| Transportation costs | 480,546 | 451,489 | 2,019,337 | 1,604,046 | |||||||||||
| Selling, general and administrative expenses | 79,289 | 77,508 | 330,160 | 287,227 | |||||||||||
| Depreciation and amortization | 9,470 | 8,589 | 36,638 | 32,728 | |||||||||||
| Income from operations | 13,673 | 10,132 | 53,566 | 19,085 | |||||||||||
| Interest expense, net | (4,262 | ) | (3,760 | ) | (15,546 | ) | (14,736 | ) | |||||||
| Income before provision for income taxes | 9,411 | 6,372 | 38,020 | 4,350 | |||||||||||
| Income tax (expense) benefit | (2,475 | ) | 6,977 | (9,296 | ) | 8,273 | |||||||||
| Net income | $ | 6,935 | $ | 13,349 | $ | 28,723 | $ | 12,623 | |||||||
| Basic EPS | $ | 0.25 | $ | 0.49 | $ | 1.04 | $ | 0.46 | |||||||
| Diluted EPS | $ | 0.25 | $ | 0.48 | $ | 1.03 | $ | 0.45 | |||||||
| Note: Amounts may not foot due to rounding. | |||||||||||||||
| Echo Global Logistics, Inc. | |||||||||||
| Condensed Consolidated Balance Sheets | |||||||||||
| December 31, 2018 | December 31, 2017 | ||||||||||
| In thousands | (unaudited) | ||||||||||
| Cash and cash equivalents | $ | 40,281 | $ | 23,515 | |||||||
| Accounts receivable, net of allowance for doubtful accounts | 337,426 | 309,733 | |||||||||
| Other current assets | 16,025 | 15,053 | |||||||||
| Total noncurrent assets | 484,593 | 489,778 | |||||||||
| Total assets | $ | 878,325 | $ | 838,079 | |||||||
| Accounts payable | $ | 216,280 | $ | 193,749 | |||||||
| Other current liabilities | 50,627 | 40,579 | |||||||||
| Convertible notes, net | 183,168 | 210,919 | |||||||||
| Other noncurrent liabilities | 38,319 | 33,960 | |||||||||
| Stockholders’ equity | 389,932 | 358,872 | |||||||||
| Total liabilities and stockholders’ equity | $ | 878,325 | $ | 838,079 | |||||||
| Note: Amounts may not foot due to rounding. | |||||||||||
| Echo Global Logistics, Inc. | |||||||
| Condensed Consolidated Statements of Cash Flows | |||||||
| Year Ended December 31, | |||||||
| 2018 | 2017 | ||||||
| In thousands | (unaudited) | ||||||
| Net cash provided by operating activities | $ | 94,245 | $ | 48,716 | |||
| Net cash used in investing activities | (31,821 | ) | (20,729 | ) | |||
| Net cash used in financing activities | (45,657 | ) | (21,117 | ) | |||
| Increase in cash and cash equivalents | 16,766 | 6,869 | |||||
| Cash and cash equivalents, beginning of period | 23,515 | 16,646 | |||||
| Cash and cash equivalents, end of period | $ | 40,281 | $ | 23,515 | |||
| Note: Amounts may not foot due to rounding. | |||||||
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 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 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
VP of Strategy
Echo Global Logistics
312-784-2046
MEDIA CONTACT:
Christopher Clemmensen
SVP of Marketing
Echo Global Logistics
312-784-2132