PR Newswire | Oct 26, 2021 08:00AM EDT

10/26 07:00 CDT

Echo Global Logistics Reports Record Third Quarter 2021 Results CHICAGO, Oct. 26, 2021

CHICAGO, Oct. 26, 2021 /PRNewswire/ -- Echo Global Logistics, Inc. (NASDAQ: ECHO), a leading provider of technology-enabled transportation management services, today reported financial results for the quarter ended September 30, 2021.

Recent Merger Announcement

On September 9, 2021, Echo announced it has entered into a definitive merger agreement to be acquired by funds managed by The Jordan Company, a global private equity firm, for $48.25 per share for an equity value of approximately $1.3 billion. As such, the Company will not be updating its outlook for fiscal 2021 or longer-term targets and will not be holding a conference call to discuss the Company's financial results for the third quarter ended September 30, 2021. Completion of the transaction is subject to approval by the Company's stockholders, regulatory approvals and other customary closing conditions. The parties expect to close the transaction during the fourth quarter of 2021.

Third Quarter 2021 Highlights

* Revenue increased 42.5% to $985.6 million from the third quarter of 2020 * Gross profit increased 41.6% to $135.2 million from the third quarter of 2020 * Adjusted gross profit(1) increased 38.7% to $139.3 million from the third quarter of 2020 * Truckload ("TL") revenue increased 51.2% to $738.0 million from the third quarter of 2020, and TL volume increased 15.0% from the third quarter of 2020 * Less than truckload ("LTL") revenue increased 25.3% to $219.8 million from the third quarter of 2020, and LTL volume increased 3.1% from the third quarter of 2020 * Transactional revenue increased 42.5% to $761.0 million and Managed Transportation revenue increased 42.5% to $224.6 million from the third quarter of 2020 * Net income increased to $18.9 million, compared to $6.8 million in the third quarter of 2020 * Fully diluted earnings per share ("EPS") increased to $0.70 in the third quarter of 2021; non-GAAP fully diluted EPS(1) increased to $0.93 in the third quarter of 2021 * Adjusted EBITDA(1) grew 83.2% to $40.2 million, compared to $21.9 million in the third quarter of 2020

^(1) Represents a non-GAAP financial measure. For the definition and adiscussion of each non-GAAP financial measure contained in this release, see"Non-GAAP Financial Measures." For a reconciliation of each non-GAAP financialmeasure to the nearest comparable GAAP financial measure, see the"Reconciliation of Non-GAAP Financial Measures" section of this release.

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"): Adjusted gross profit, adjusted gross profit margin, EBITDA, Adjusted EBITDA and Non-GAAP fully diluted EPS. Adjusted gross profit is calculated as gross profit adjusted to exclude internal use software depreciation. It also represents revenue minus transportation costs. Adjusted gross profit margin is calculated as adjusted gross profit (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 changes in contingent consideration, merger-related transaction costs, and stock compensation expense. Non-GAAP fully diluted EPS is defined as fully diluted EPS excluding changes in contingent consideration, amortization, non-cash interest expense, merger-related transaction costs, 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.

Adjusted gross profit, adjusted gross profit 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, 2020, and other filings with the SEC.

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:

Pete RogersChief Financial OfficerEcho Global Logistics312-676-4584

Zach JecklinSVP of StrategyEcho Global Logistics312-784-2046

MEDIA CONTACT:

Christopher ClemmensenSVP of MarketingEcho Global Logistics312-784-2132

Summarized financial results and select operating metrics are as follows:

Three Months Ended September 30,

Dollars in millions, except per share data 2021 2020 % change

(unaudited)

Transactional revenue $ 761.0 $ 533.9 42.5 %

Managed Transportation revenue 224.6 157.6 42.5 %

Revenue 985.6 691.5 42.5 %



Transportation costs 846.3 591.0 43.2 % (excludes internal use software depreciation)^(1)



Commission expense 40.5 29.8 36.0 %

Change in contingent consideration - (0.3) 100.0 %

Merger-related transaction costs 2.5 - 100.0 %

Stock compensation expense 2.6 2.3 11.3 %

Other selling, general and administrative 58.6 48.7 20.2 %

Selling, general and administrative expenses 104.2 80.5 29.4 %



Depreciation 6.3 7.0 (9.2) %

Amortization 2.6 2.7 (4.5) %

Depreciation and amortization 8.9 9.7 (7.9) %



Income from operations 26.2 10.3 155.6 %



Cash interest expense 0.6 1.0 (37.1) %

Interest expense 0.6 1.0 (37.1) %

Income before provision for income taxes 25.6 9.2 176.7 %

Income tax expense (6.7) (2.4) 174.3 %

Net income $ 18.9 $ 6.8 177.6 %



Fully diluted EPS $ 0.70 $ 0.26 172.0 %

Diluted shares 27.0 26.5

Note: Amounts may not foot due to rounding.

^(1) Transportation costs excludes internal use software depreciation of $4.1 million and $5.0 million for three months ended September 30, 2021 and 2020, respectively. Internal use software depreciation is included in depreciation expense.









Reconciliation of Non-GAAP Financial Measures Three Months Ended September 30,

Dollars in millions, except per share data 2021 2020 % change

(unaudited)

Revenue $ 985.6 $ 691.5 42.5 %

Transportation costs 846.3 591.0 43.2 %

Internal use software depreciation 4.1 5.0 (17.2) %

Gross profit $ 135.2 $ 95.5 41.6 %

Add: Internal use software depreciation 4.1 5.0 (17.2) %

Adjusted gross profit^(1) $ 139.3 $ 100.4 38.7 %



Net income $ 18.9 $ 6.8 177.6 %

Depreciation 6.3 7.0 (9.2) %

Amortization 2.6 2.7 (4.5) %

Cash interest expense 0.6 1.0 (37.1) %

Income tax expense 6.7 2.4 174.3 %

EBITDA^(1) $ 35.1 $ 19.9 76.3 %

Merger-related transaction costs 2.5 - 100.0 %

Change in contingent consideration - (0.3) 100.0 %

Stock compensation expense 2.6 2.3 11.3 %

Adjusted EBITDA^(1) $ 40.2 $ 21.9 83.2 %



Fully diluted EPS $ 0.70 $ 0.26 172.0 %

Change in contingent consideration - (0.01) (100.0) %

Amortization 0.10 0.10 (6.4) %

Merger-related transaction costs 0.09 - 100.0 %

Stock compensation expense 0.09 0.09 9.1 %

Tax effect of adjustments (0.06) (0.04) 46.2 %

Non-GAAP fully diluted EPS^(1) $ 0.93 $ 0.40 133.7 %



Operating Metrics

Gross profit margin 13.7 % 13.8 % (10) bps

Adjusted gross profit margin^(1) 14.1 % 14.5 % (39) bps

Total employees 2,655 2,513 5.7 %

Sales employees and agents 1,719 1,617 6.3 %

TL revenue % 74.9 % 70.6 % 430 bps

LTL revenue % 22.3 % 25.4 % (307) bps

Note: Amounts may not foot due to rounding.

^(1) See the "Non-GAAP Financial Measures" section of this release for the definition and a discussion of each Non-GAAP financial measure.

Echo Global Logistics, Inc.

Condensed Consolidated Statements of Operations



Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 2021 2020

In thousands, except per share data (unaudited) (unaudited)

Revenue $985,590 $691,495 $2,720,916 $1,757,262



Costs and expenses:

Transportation costs 846,306 591,048 2,325,553 1,478,864 (excludes internal use software depreciation)^(1)

Selling, general and administrative expenses 104,170 80,533 303,765 235,667

Depreciation and amortization 8,892 9,655 26,277 29,251

Income from operations 26,223 10,259 65,321 13,480

Interest expense (638) (1,014) (2,070) (5,200)

Income before provision for income taxes 25,585 9,245 63,250 8,280

Income tax expense (6,659) (2,427) (15,761) (3,444)

Net income $18,925 $6,818 $47,489 $4,836



Basic earnings per share $0.72 $0.26 $1.82 $0.19

Diluted earnings per share $0.70 $0.26 $1.77 $0.18

Note: Amounts may not foot due to rounding.

^(1) Transportation costs excludes internal use software depreciation of $4.1 million and $5.0 million for three months ended September 30, 2021 and 2020, respectively; and $11.8 million and $14.7 million for nine months ended September 30, 2021 and 2020, respectively. Internal use software depreciation is included in depreciation expense.

Echo Global Logistics, Inc.

Condensed Consolidated Balance Sheets



September 30, 2021December 31, 2020

In thousands (unaudited)

Cash and cash equivalents $ 53,967 $ 41,297

Accounts receivable, net of allowance for doubtful accounts576,205 439,391

Other current assets 14,294 12,787

Total noncurrent assets 464,946 470,469

Total assets $ 1,109,413 $ 963,944



Accounts payable $ 423,732 $ 317,692

Other current liabilities 73,713 59,443

Long-term debt, net 104,283 133,945

Other noncurrent liabilities 53,968 53,494

Stockholders' equity 453,717 399,369

Total liabilities and stockholders' equity $ 1,109,413 $ 963,944

Note: Amounts may not foot due to rounding.









Echo Global Logistics, Inc.

Condensed Consolidated Statements of Cash Flows



Nine Months Ended September 30,

2021 2020

In thousands (unaudited)

Net cash provided by operating activities $ 67,860 $ 53,367

Net cash used in investing activities (22,105) (15,144)

Net cash used in financing activities (33,085) (25,269)

Increase in cash and cash equivalents 12,670 12,953

Cash and cash equivalents, beginning of period 41,297 34,626

Cash and cash equivalents, end of period $ 53,967 $ 47,579

Note: Amounts may not foot due to rounding.

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SOURCE Echo Global Logistics, Inc.