UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 15, 2011
EXPRESS-1 EXPEDITED SOLUTIONS, INC.
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | 001-32172 | 03-0450326 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
3399 Lakeshore Drive, Suite 225, Saint Joseph, Michigan 49085
(Address of principal executive offices — zip code)
(Address of principal executive offices — zip code)
(269) 429-9761
(Registrant’s telephone number, including area code)
Not Applicable
(former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)). |
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On
August 15, 2011, Express-1 Expedited Solutions, Inc. issued a press release reporting its
financial results for the quarter ended June 30, 2011. A copy of the release is furnished as
Exhibit 99.1.
The
information furnished herein, including Exhibit 99.1, shall not
be deemed “filed” for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), or otherwise subject to the liability
of that Section. This
information shall not be deemed incorporated by reference into any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except to the extent
that the registrant specifically incorporates any such information by
reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
| Exhibit No. | Exhibit Description | |||
| 99.1 | Press Release dated August 15, 2011 |
|||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated August 15, 2011 | Express-1 Expedited Solutions, Inc. |
|||
| By: | /s/ Michael R. Welch | |||
| Michael R. Welch | ||||
| Chief Executive Officer | ||||
Exhibit 99.1
Express-1 Expedited Solutions Reports Second Quarter 2011 Results
SAINT JOSEPH, Mich. — August 15, 2011 — Express-1 Expedited Solutions, Inc. (NYSE Amex: XPO)
(“Express-1” or the “Company”) today announced its financial results for the second quarter of
2011. Total revenue from continuing operations for the second quarter was $44.1 million, a 9.3%
increase from the same period in 2010.
Net income from continuing operations for the second quarter was $914,000, or $.03 diluted earnings
per share, compared with $1,504,000, or $.05 diluted earnings per share, for the same period in
2010. Gross margin of $7,180,000 declined 1.6 percentage points year-over-year to 16.3% for the
quarter, reflecting a choppy environment for the Company’s Express-1 business unit, partially
offset by gains in other operating segments.
Mike Welch, chief executive officer, said, “While our revenue growth in the quarter was solid, we
experienced margin pressure within our Express-1 unit, including a greater reliance on high-volume,
lower-rate customers, and the strategic expansion of our cross-border business. In addition, we
drove 43% revenue growth in Bounce Logistics, a business model that generates a lower margin.
Non-operational impacts on results included expenses related to the proposed equity investment led
by Jacobs Private Equity, and a modification to the revenue recognition policy for our CGL unit
that reduced both our top line and our profitability.
“Domestic demand began to strengthen late in the quarter, as reflected in our June gross margin of
16.9%. In addition, we are continuing to see significant growth in our business with Mexico, where
Express-1’s expertise in border logistics is a competitive advantage. We anticipate that our
overall operating environment will continue to become more favorable through the balance of the
year as Japan’s export production recovers from the tsunami and seasonal retail activity develops.”
Welch continued, “Our board has recommended the proposed investment in Express-1 led by Jacobs
Private Equity. This is a tremendous opportunity for the company to carve out a major position
under the new banner of XPO Logistics in three areas where we already excel: expedited
transportation solutions, domestic and international freight forwarding, and premium truckload
brokerage. We look forward to the stockholder vote on September 1.”
Conference Call
In light of the pending equity investment, the Company’s next earnings conference call will be held
after the reporting of third quarter 2011 results.
About Express-1 Expedited Solutions, Inc.
Founded in 1989, Express-1 is a non-asset-based, third-party logistics services provider that uses
a network of relationships with ground, sea and air carriers to find the best transportation
solutions for its customers. The Company offers its services through three distinct business units:
Express-1, Inc. (expedited transportation solutions), the fifth largest U.S. expedited
freight service provider, according to The Journal of Commerce; Concert Group Logistics, Inc.
(domestic and international freight forwarding); and Bounce Logistics, Inc. (premium truckload
brokerage). The Company serves more than 4,000 retail, commercial, manufacturing and industrial
customers through six U.S. operations centers and 23 agent locations. www.xpocorporate.com
Forward-Looking Statements
This press release contains forward-looking statements. Statements that are not historical facts,
including statements about beliefs or expectations, are forward-looking statements. These
statements are based on plans, estimates and projections at the time the statements are made, and
readers should not place undue reliance on them. In some cases, readers can identify
forward-looking statements by the use of forward-looking terms such as “may,” “will,” “should,”
“expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or
“continue” or the negative of these terms or other comparable terms. Forward-looking statements
involve inherent risks and uncertainties and readers are cautioned that a number of important
factors could cause actual results to differ materially from those contained in any such
forward-looking statements. Factors that could cause actual results to differ materially from those
described in this press release include, among others: uncertainties as to the timing of the
proposed equity investment; the possibility that competing transaction proposals will be made; the
possibility that various closing conditions for the proposed equity investment may not be satisfied
or waived; the possibility that the warrants contemplated by the proposed equity investment, if
issued, will not be exercised; the potential inability to identify and consummate acquisitions and
arrange adequate financing; the acquisition of businesses or the launch of new lines of business
could increase operating expenses and dilute operating margins; increased competition could lead to
negative pressure on our pricing and the need for increased marketing; the inability to maintain,
establish or renew relationships with customers, whether due to competition or other factors; the
inability to comply with regulatory requirements governing our business operations; the general
risks associated with our businesses; general economic and business conditions; and other factors.
Readers are cautioned not to place undue reliance on the forward-looking statements included in
this press release, which speak only as of the date hereof. Neither the Company nor any other
person undertakes any obligation to update any of these statements in light of new information or
future events.
Contact:
Express-1 Expedited Solutions, Inc.
Mike Welch, 269-429-9761
Mike.Welch@xpocorporate.com
Mike Welch, 269-429-9761
Mike.Welch@xpocorporate.com
Express-1 Expedited Solutions, Inc.
Consolidated Balance Sheets
Consolidated Balance Sheets
| (Unaudited) | ||||||||
| June 30, 2011 | December 31, 2010 | |||||||
| ASSETS |
||||||||
Current assets: |
||||||||
Cash |
$ | 647,000 | $ | 561,000 | ||||
Accounts receivable, net of allowances of $137,000 and
$136,000, respectively |
24,533,000 | 24,272,000 | ||||||
Prepaid expenses |
601,000 | 257,000 | ||||||
Deferred tax asset, current |
0 | 314,000 | ||||||
Income tax receivable |
859,000 | 1,348,000 | ||||||
Other current assets |
251,000 | 813,000 | ||||||
Total current assets |
26,891,000 | 27,565,000 | ||||||
Property and equipment, net of $3,611,000 and $3,290,000
in accumulated depreciation, respectively |
2,865,000 | 2,960,000 | ||||||
Goodwill |
16,959,000 | 16,959,000 | ||||||
Identifiable intangible assets, net of $3,094,000 and
$2,827,000 in accumulated amortization, respectively |
8,280,000 | 8,546,000 | ||||||
Loans and advances |
120,000 | 126,000 | ||||||
Other long-term assets |
481,000 | 516,000 | ||||||
Total long-term assets |
28,705,000 | 29,107,000 | ||||||
Total assets |
$ | 55,596,000 | $ | 56,672,000 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 8,890,000 | $ | 8,756,000 | ||||
Accrued salaries and wages |
402,000 | 1,165,000 | ||||||
Accrued expenses, other |
2,945,000 | 2,877,000 | ||||||
Deferred tax liabilities, current |
80,000 | 0 | ||||||
Current maturities of long-term debt and capital leases |
1,667,000 | 1,680,000 | ||||||
Other current liabilities |
646,000 | 773,000 | ||||||
Total current liabilities |
14,630,000 | 15,251,000 | ||||||
Line of credit |
0 | 2,749,000 | ||||||
Long-term debt and capital leases, net of current
maturities |
1,250,000 | 2,083,000 | ||||||
Deferred tax liability, long-term |
2,338,000 | 2,032,000 | ||||||
Other long-term liabilities |
426,000 | 544,000 | ||||||
Total long-term liabilities |
4,014,000 | 7,408,000 | ||||||
Stockholders’ equity: |
||||||||
Preferred stock, $.001 par value; 10,000,000 shares;
no shares issued or outstanding |
0 | 0 | ||||||
Common stock, $.001 par value; 100,000,000 shares
authorized; 33,191,561
and 32,687,522 shares issued, respectively; and
33,011,561 and 32,507,522 shares outstanding,
respectively |
33,000 | 33,000 | ||||||
Additional paid-in capital |
28,116,000 | 27,208,000 | ||||||
Treasury stock, at cost, 180,000 shares held |
(107,000 | ) | (107,000 | ) | ||||
Accumulated earnings |
8,910,000 | 6,879,000 | ||||||
Total stockholders’ equity |
36,952,000 | 34,013,000 | ||||||
Total liabilities and stockholders’ equity |
$ | 55,596,000 | $ | 56,672,000 | ||||
Express-1 Expedited Solutions, Inc.
Consolidated Statements of Operations
Consolidated Statements of Operations
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | |||||||||||||
Revenues |
||||||||||||||||
Operating revenue |
$ | 44,094,000 | $ | 40,340,000 | $ | 85,602,000 | $ | 71,982,000 | ||||||||
Expenses |
||||||||||||||||
Direct expense |
36,914,000 | 33,101,000 | 71,215,000 | 59,144,000 | ||||||||||||
Gross margin |
7,180,000 | 7,239,000 | 14,387,000 | 12,838,000 | ||||||||||||
Selling, general and administrative expense |
5,537,000 | 4,598,000 | 10,744,000 | 8,673,000 | ||||||||||||
Operating income |
1,643,000 | 2,641,000 | 3,643,000 | 4,165,000 | ||||||||||||
Other expense |
33,000 | 34,000 | 62,000 | 54,000 | ||||||||||||
Interest expense |
47,000 | 88,000 | 96,000 | 108,000 | ||||||||||||
Income before income tax provision |
1,563,000 | 2,519,000 | 3,485,000 | 4,003,000 | ||||||||||||
Income tax provision |
649,000 | 1,015,000 | 1,454,000 | 1,665,000 | ||||||||||||
Net income |
$ | 914,000 | $ | 1,504,000 | $ | 2,031,000 | $ | 2,338,000 | ||||||||
Basic earnings per common share |
||||||||||||||||
Net income |
$ | 0.03 | $ | 0.05 | $ | 0.06 | $ | 0.07 | ||||||||
Diluted earnings per common share |
||||||||||||||||
Net income |
$ | 0.03 | $ | 0.05 | $ | 0.06 | $ | 0.07 | ||||||||
Weighted average common shares outstanding |
||||||||||||||||
Basic weighted average common shares
outstanding |
33,010,881 | 32,044,116 | 32,857,654 | 32,039,706 | ||||||||||||
Diluted weighted average common shares
outstanding |
34,333,656 | 32,645,399 | 34,211,517 | 32,602,367 | ||||||||||||
Express-1 Expedited Solutions, Inc.
Summary Financial Table
For the Three Months Ended June 30, 2011 and 2010
(Unaudited)
| Percent of | ||||||||||||||||||||||||
| Three Months Ended June 30, | Quarter to Quarter Change | Business Unit Revenue | ||||||||||||||||||||||
| 2011 | 2010 | In Dollars | In Percentage | 2011 | 2010 | |||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Express-1 |
$ | 23,060,000 | $ | 20,557,000 | $ | 2,503,000 | 12.2 | % | 52.2 | % | 51.0 | % | ||||||||||||
CGL |
15,722,000 | 16,074,000 | (352,000 | ) | -2.2 | % | 35.7 | % | 39.8 | % | ||||||||||||||
Bounce |
6,687,000 | 4,675,000 | 2,012,000 | 43.0 | % | 15.2 | % | 11.6 | % | |||||||||||||||
Intercompany eliminations |
(1,375,000 | ) | (966,000 | ) | (409,000 | ) | 42.3 | % | -3.1 | % | -2.4 | % | ||||||||||||
Total revenues |
44,094,000 | 40,340,000 | 3,754,000 | 9.3 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Direct expenses |
||||||||||||||||||||||||
Express-1 |
18,573,000 | 15,720,000 | 2,853,000 | 18.1 | % | 80.5 | % | 76.5 | % | |||||||||||||||
CGL |
14,051,000 | 14,426,000 | (375,000 | ) | -2.6 | % | 89.4 | % | 89.7 | % | ||||||||||||||
Bounce |
5,665,000 | 3,921,000 | 1,744,000 | 44.5 | % | 84.7 | % | 83.9 | % | |||||||||||||||
Intercompany eliminations |
(1,375,000 | ) | (966,000 | ) | (409,000 | ) | 42.3 | % | 100.0 | % | 100.0 | % | ||||||||||||
Total direct expenses |
36,914,000 | 33,101,000 | 3,813,000 | 11.5 | % | 83.7 | % | 82.1 | % | |||||||||||||||
Gross margin |
||||||||||||||||||||||||
Express-1 |
4,487,000 | 4,837,000 | (350,000 | ) | -7.2 | % | 19.5 | % | 23.5 | % | ||||||||||||||
CGL |
1,671,000 | 1,648,000 | 23,000 | 1.4 | % | 10.6 | % | 10.3 | % | |||||||||||||||
Bounce |
1,022,000 | 754,000 | 268,000 | 35.5 | % | 15.3 | % | 16.1 | % | |||||||||||||||
Total gross margin |
7,180,000 | 7,239,000 | (59,000 | ) | -0.8 | % | 16.3 | % | 17.9 | % | ||||||||||||||
Selling, general & administrative |
||||||||||||||||||||||||
Express-1 |
2,473,000 | 2,355,000 | 118,000 | 5.0 | % | 10.7 | % | 11.5 | % | |||||||||||||||
CGL |
1,272,000 | 1,093,000 | 179,000 | 16.4 | % | 8.1 | % | 6.8 | % | |||||||||||||||
Bounce |
850,000 | 613,000 | 237,000 | 38.7 | % | 12.7 | % | 13.1 | % | |||||||||||||||
Corporate |
942,000 | 537,000 | 405,000 | 75.4 | % | 2.1 | % | 1.3 | % | |||||||||||||||
Total selling, general & administrative |
5,537,000 | 4,598,000 | 939,000 | 20.4 | % | 12.6 | % | 11.4 | % | |||||||||||||||
Operating income |
||||||||||||||||||||||||
Express-1 |
2,014,000 | 2,482,000 | (468,000 | ) | -18.9 | % | 8.7 | % | 12.1 | % | ||||||||||||||
CGL |
399,000 | 555,000 | (156,000 | ) | -28.1 | % | 2.5 | % | 3.5 | % | ||||||||||||||
Bounce |
172,000 | 141,000 | 31,000 | 22.0 | % | 2.6 | % | 3.0 | % | |||||||||||||||
Corporate |
(942,000 | ) | (537,000 | ) | (405,000 | ) | -75.4 | % | -2.1 | % | -1.3 | % | ||||||||||||
Operating income |
1,643,000 | 2,641,000 | (998,000 | ) | -37.8 | % | 3.7 | % | 6.5 | % | ||||||||||||||
Interest expense |
47,000 | 88,000 | (41,000 | ) | -46.6 | % | 0.1 | % | 0.2 | % | ||||||||||||||
Other expense |
33,000 | 34,000 | (1,000 | ) | -2.9 | % | 0.1 | % | 0.1 | % | ||||||||||||||
Income before tax |
1,563,000 | 2,519,000 | (956,000 | ) | -38.0 | % | 3.5 | % | 6.2 | % | ||||||||||||||
Tax provision |
649,000 | 1,015,000 | (366,000 | ) | -36.1 | % | 1.5 | % | 2.5 | % | ||||||||||||||
Net income |
$ | 914,000 | $ | 1,504,000 | $ | (590,000 | ) | -39.2 | % | 2.0 | % | 3.7 | % | |||||||||||
Express-1 Expedited Solutions, Inc.
Summary Financial Table
For the Six Months Ended June 30, 2011 and 2010
(Unaudited)
| Percent of | ||||||||||||||||||||||||
| Six Months Ended June 30, | Year to Year Change | Business Unit Revenue | ||||||||||||||||||||||
| 2011 | 2010 | In Dollars | In Percentage | 2011 | 2010 | |||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Express-1 |
$ | 43,802,000 | $ | 36,769,000 | $ | 7,033,000 | 19.1 | % | 51.1 | % | 51.1 | % | ||||||||||||
CGL |
31,461,000 | 29,012,000 | 2,449,000 | 8.4 | % | 36.8 | % | 40.3 | % | |||||||||||||||
Bounce |
12,670,000 | 7,798,000 | 4,872,000 | 62.5 | % | 14.8 | % | 10.8 | % | |||||||||||||||
Intercompany eliminations |
(2,331,000 | ) | (1,597,000 | ) | (734,000 | ) | 46.0 | % | -2.7 | % | -2.2 | % | ||||||||||||
Total revenues |
85,602,000 | 71,982,000 | 13,620,000 | 18.9 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Direct expenses |
||||||||||||||||||||||||
Express-1 |
34,762,000 | 28,262,000 | 6,500,000 | 23.0 | % | 79.4 | % | 76.9 | % | |||||||||||||||
CGL |
28,064,000 | 25,954,000 | 2,110,000 | 8.1 | % | 89.2 | % | 89.5 | % | |||||||||||||||
Bounce |
10,720,000 | 6,525,000 | 4,195,000 | 64.3 | % | 84.6 | % | 83.7 | % | |||||||||||||||
Intercompany eliminations |
(2,331,000 | ) | (1,597,000 | ) | (734,000 | ) | 46.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
Total Direct expenses |
71,215,000 | 59,144,000 | 12,071,000 | 20.4 | % | 83.2 | % | 82.2 | % | |||||||||||||||
Gross margin |
||||||||||||||||||||||||
Express-1 |
9,040,000 | 8,507,000 | 533,000 | 6.3 | % | 20.6 | % | 23.1 | % | |||||||||||||||
CGL |
3,397,000 | 3,058,000 | 339,000 | 11.1 | % | 10.8 | % | 10.5 | % | |||||||||||||||
Bounce |
1,950,000 | 1,273,000 | 677,000 | 53.2 | % | 15.4 | % | 16.3 | % | |||||||||||||||
Total gross margin |
14,387,000 | 12,838,000 | 1,549,000 | 12.1 | % | 16.8 | % | 17.8 | % | |||||||||||||||
Selling, general & administrative |
||||||||||||||||||||||||
Express-1 |
5,125,000 | 4,376,000 | 749,000 | 17.1 | % | 11.7 | % | 11.9 | % | |||||||||||||||
CGL |
2,526,000 | 2,247,000 | 279,000 | 12.4 | % | 8.0 | % | 7.7 | % | |||||||||||||||
Bounce |
1,640,000 | 1,035,000 | 605,000 | 58.5 | % | 12.9 | % | 13.3 | % | |||||||||||||||
Corporate |
1,453,000 | 1,015,000 | 438,000 | 43.2 | % | 1.7 | % | 1.4 | % | |||||||||||||||
Total selling, general & administrative |
10,744,000 | 8,673,000 | 2,071,000 | 23.9 | % | 12.6 | % | 12.0 | % | |||||||||||||||
Operating income |
||||||||||||||||||||||||
Express-1 |
3,915,000 | 4,131,000 | (216,000 | ) | -5.2 | % | 8.9 | % | 11.2 | % | ||||||||||||||
CGL |
871,000 | 811,000 | 60,000 | 7.4 | % | 2.8 | % | 2.8 | % | |||||||||||||||
Bounce |
310,000 | 238,000 | 72,000 | 30.3 | % | 2.4 | % | 3.1 | % | |||||||||||||||
Corporate |
(1,453,000 | ) | (1,015,000 | ) | (438,000 | ) | -43.2 | % | -1.7 | % | -1.4 | % | ||||||||||||
Operating income |
3,643,000 | 4,165,000 | (522,000 | ) | -12.5 | % | 4.2 | % | 5.8 | % | ||||||||||||||
Interest expense |
96,000 | 108,000 | (12,000 | ) | -11.1 | % | 0.1 | % | 0.2 | % | ||||||||||||||
Other expense |
62,000 | 54,000 | 8,000 | 14.8 | % | 0.1 | % | 0.1 | % | |||||||||||||||
Income before tax |
3,485,000 | 4,003,000 | (518,000 | ) | -12.9 | % | 4.0 | % | 5.5 | % | ||||||||||||||
Tax provision |
1,454,000 | 1,665,000 | (211,000 | ) | -12.7 | % | 1.7 | % | 2.3 | % | ||||||||||||||
Net income |
$ | 2,031,000 | $ | 2,338,000 | $ | (307,000 | ) | -13.1 | % | 2.3 | % | 3.2 | % | |||||||||||