PR Newswire | Oct 28, 2020 04:01PM EDT

10/28 15:01 CDT

Echo Global Logistics Reports Record Third Quarter 2020 Revenue CHICAGO, Oct. 28, 2020

CHICAGO, Oct. 28, 2020 /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, 2020.

"The third quarter was Echo's strongest quarter ever in both revenue and volume," said Doug Waggoner, Chairman of the Board of Directors and Chief Executive Officer at Echo. Mr. Waggoner continued, "I'm excited with our team's ability to deliver record numbers in this challenging environment of constrained capacity and supply chain disruption."

Third Quarter 2020 Highlights

* Revenue increased 23.2% to $691.5 million from the third quarter of 2019; Net revenue(1) increased 3.6% to $100.4 million from the third quarter of 2019 * Truckload ("TL") volume increased 13.6% from the third quarter of 2019, and TL revenue increased 32.3% to $488.2 million from the third quarter of 2019 * Less than truckload ("LTL") volume increased 6.6% from the third quarter of 2019, and LTL revenue increased 4.7% to $175.5 million from the third quarter of 2019 * Managed Transportation revenue increased 23.0% to $157.6 million and Transactional revenue increased 23.2% to $533.9 million from the third quarter of 2019 * Net revenue margin(1) decreased to 14.5% in the third quarter of 2020 from 17.3% in the third quarter of 2019 * Net income increased to $6.8 million, compared to $4.8 million in the third quarter of 2019 * Fully diluted EPS increased to $0.26 in the third quarter of 2020; non-GAAP fully diluted EPS(1) increased to $0.40 in the third quarter of 2020 * Adjusted EBITDA(1) grew 0.4% to $21.9 million, compared to $21.8 million in the third quarter of 2019

^(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.

Summarized financial results and select operating metrics are as follows:

Three Months Ended September 30,

Dollars in millions, except per share data 2020 2019 % change

(unaudited)

Transactional revenue $ 533.9 $ 433.3 23.2 %

Managed Transportation revenue 157.6 128.1 23.0 %

Revenue 691.5 561.4 23.2 %



Transportation costs 591.0 464.5 27.3 %

Net revenue^(1) 100.4 97.0 3.6 %



Commission expense 29.8 29.1 2.5 %

Change in contingent consideration (0.3) 0.1 (622.2) %

Stock compensation expense 2.3 2.5 (9.2) %

Other selling, general and administrative 48.7 46.1 5.8 %

Selling, general and administrative expenses 80.5 77.7 3.6 %



Depreciation 7.0 6.8 2.5 %

Amortization 2.7 2.8 (3.8) %

Depreciation and amortization 9.7 9.6 0.6 %



Income from operations 10.3 9.7 6.1 %



Cash interest expense 1.0 1.3 (19.6) %

Non-cash interest expense - 1.6 (100.0) %

Interest expense 1.0 2.8 (64.1) %

Income before provision for income taxes 9.2 6.8 35.1 %

Income tax expense (2.4) (2.0) 21.3 %

Net income $ 6.8 $ 4.8 40.8 %



Fully diluted EPS $ 0.26 $ 0.18 40.9 %

Diluted shares 26.5 26.5

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 release.

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

Dollars in millions, except per share data 2020 2019 % change

(unaudited)

Revenue $ 691.5 $ 561.4 23.2 %

Transportation costs 591.0 464.5 27.3 %

Net revenue^(1) $ 100.4 $ 97.0 3.6 %



Net income $ 6.8 $ 4.8 40.8 %

Depreciation 7.0 6.8 2.5 %

Amortization 2.7 2.8 (3.8) %

Non-cash interest expense - 1.6 (100.0) %

Cash interest expense 1.0 1.3 (19.6) %

Income tax expense 2.4 2.0 21.3 %

EBITDA^(1) $ 19.9 $ 19.3 3.4 %

Change in contingent consideration (0.3) 0.1 (622.2) %

Stock compensation expense 2.3 2.5 (9.2) %

Adjusted EBITDA^(1) $ 21.9 $ 21.8 0.4 %



Fully diluted EPS $ 0.26 $ 0.18 40.9 %

Change in contingent consideration (0.01) 0.00 (622.8) %

Amortization 0.10 0.11 (3.7) %

Non-cash interest expense - 0.06 (100.0) %

Stock compensation expense 0.09 0.10 (9.1) %

Tax effect of adjustments (0.04) (0.05) (27.9) %

Non-GAAP fully diluted EPS^(1) $ 0.40 $ 0.39 1.5 %



Operating Metrics

Net revenue margin^(1) 14.5 % 17.3 % (275) bps

Total employees 2,513 2,603 (3.5) %

Sales employees and agents 1,617 1,741 (7.1) %

TL revenue % 70.6 % 65.7 % 490 bps

LTL revenue % 25.4 % 29.9 % (448) 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.

2020 Fourth Quarter and Full Year Guidance

"We remain very encouraged by our continued ability to take market share by demonstrating value to our shippers and expect revenue for the fourth quarter to be between $675 and $725 million," said Pete Rogers, Chief Financial Officer at Echo.

Conference Call

A conference call, with accompanying presentation slides, will be broadcast live on October 28, 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 Pete Rogers, 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 4065218. The audio replay will be available through November 4, 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 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, 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, 2019, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, and other filings with the SEC.

Echo Global Logistics, Inc. Condensed Consolidated Statements of Operations



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

2020 2019 2020 2019

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

Revenue $691,495$561,441$1,757,262$1,653,300



Costs and expenses:

Transportation costs 591,048 464,460 1,478,864 1,356,949

Selling, general and administrative expenses80,533 77,722 235,667 238,055

Depreciation and amortization 9,655 9,594 29,251 28,855

Income from operations 10,259 9,665 13,480 29,441

Interest expense (1,014) (2,821) (5,200) (9,789)

Income before provision for income taxes 9,245 6,844 8,280 19,652

Income tax expense (2,427) (2,001) (3,444) (6,245)

Net income $6,818 $4,843 $4,836 $13,407



Basic earnings per share $0.26 $0.18 $0.19 $0.50

Diluted earnings per share $0.26 $0.18 $0.18 $0.50

Note: Amounts may not foot due to rounding.

Echo Global Logistics, Inc. Condensed Consolidated Balance Sheets



September 30, 2020December 31, 2019

In thousands (unaudited)

Cash and cash equivalents $47,579 $34,626

Accounts receivable, net of allowance for doubtful accounts432,525 286,989

Other current assets 11,632 14,578

Total noncurrent assets 472,724 490,473

Total assets $964,460 $826,666



Accounts payable $330,365 $187,524

Other current liabilities 51,249 42,885

Long-term debt, net 143,934 -

Convertible notes, net - 156,298

Other noncurrent liabilities 52,439 56,646

Stockholders' equity 386,473 383,312

Total liabilities and stockholders' equity $964,460 $826,666

Note: Amounts may not foot due to rounding.

Echo Global Logistics, Inc. Condensed Consolidated Statements of Cash Flows



Nine Months Ended September 30,

2020 2019

In thousands (unaudited)

Net cash provided by operating activities $53,367 $68,298

Net cash used in investing activities (15,144) (18,887)

Net cash used in financing activities (25,269) (63,275)

Increase/(Decrease) in cash and cash equivalents12,953 (13,863)

Cash and cash equivalents, beginning of period 34,626 40,281

Cash and cash equivalents, end of period $47,579 $26,418

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:

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

View original content: http://www.prnewswire.com/news-releases/echo-global-logistics-reports-record-third-quarter-2020-revenue-301162014.html

SOURCE Echo Global Logistics, Inc.