Echo Global Logistics Reports Second Quarter 2020 Results

Rhea-AI Summary

Echo Global Logistics, Inc. (NASDAQ: ECHO) reported its Q2 2020 financial results, revealing a 7.1% decline in revenue to $514.7 million compared to Q2 2019. Net revenue fell 12.5% to $88.0 million, with net income dropping 81.2% to $1.0 million.

Key metrics include a 3.3% increase in truckload volume but a 14.2% drop in less-than-truckload revenue. Fully diluted EPS decreased to $0.04 from $0.19. Despite challenging market conditions, the company noted increasing business volume in July.

Positive

• Truckload volume increased by 3.3% year-over-year.
• Increasing business volume observed in July 2020.

Negative

• Revenue decreased by 7.1% to $514.7 million year-over-year.
• Net revenue fell by 12.5% to $88.0 million.
• Net income dropped by 81.2% to $1.0 million.
• Fully diluted EPS decreased by 80.8% to $0.04.
• Adjusted EBITDA declined by 35.9% to $14.8 million.

CHICAGO, July 22, 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 June 30, 2020.

"The second quarter was one of the most volatile we've ever seen, with market conditions changing dramatically in just three short months," said Doug Waggoner, Chairman of the Board of Directors and Chief Executive Officer at Echo. Mr. Waggoner continued, "I'm pleased with our team's ability to respond and encouraged by the increasing business volume we've seen in the second half of the quarter and continuing into July."

Second Quarter 2020 Highlights

• Revenue decreased 7.1% to $514.7 million from the second quarter of 2019; Net revenue⁽¹⁾ decreased 12.5% to $88.0 million from the second quarter of 2019
• Truckload ("TL") volume increased 3.3% from the second quarter of 2019
• Less than truckload ("LTL") revenue decreased 14.2% to $141.6 million from the second quarter of 2019; TL revenue decreased 2.8% to $352.2 million from the second quarter of 2019
• Managed Transportation revenue decreased 6.1% to $117.9 million and Transactional revenue decreased 7.3% to $396.8 million from the second quarter of 2019
• Net revenue margin⁽¹⁾ decreased to 17.1% in the second quarter of 2020 from 18.2% in the second quarter of 2019
• Net income decreased to $1.0 million, compared to $5.1 million in the second quarter of 2019
• Fully diluted EPS decreased to $0.04 in the second quarter of 2020; non-GAAP fully diluted EPS⁽¹⁾ decreased to $0.19 in the second quarter of 2020
• Adjusted EBITDA⁽¹⁾ declined 35.9% to $14.8 million, compared to $23.1 million in the second quarter of 2019

 

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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 release.

Summarized financial results and select operating metrics are as follows:

		Three Months Ended June 30,
Dollars in millions, except per share data		2020		2019		% change
		(unaudited)
Transactional revenue		$	396.8			$	428.2			(7.3)	%
Managed Transportation revenue		117.9			125.6			(6.1)	%
Revenue		514.7			553.8			(7.1)	%
Transportation costs		426.7			453.2			(5.8)	%
Net revenue(1)		88.0			100.6			(12.5)	%
Commission expense		26.6			31.1			(14.4)	%
Change in contingent consideration		(0.1)			0.2			(138.1)	%
Stock compensation expense		2.3			2.4			(4.4)	%
Other selling, general and administrative		46.6			46.5			0.4	%
Selling, general and administrative expenses		75.5			80.1			(5.8)	%
Depreciation		7.0			6.8			4.1	%
Amortization		2.8			3.0			(8.8)	%
Depreciation and amortization		9.8			9.8			0.1	%
Income from operations		2.8			10.7			(74.1)	%
Cash interest expense		1.2			1.3			(12.5)	%
Non-cash interest expense		0.2			2.2			(90.0)	%
Interest expense		1.4			3.6			(60.7)	%
Income before provision for income taxes		1.4			7.1			(80.8)	%
Income tax expense		(0.4)			(2.1)			(79.9)	%
Net income		$	1.0			$	5.1			(81.2)	%
Fully diluted EPS		$	0.04			$	0.19			(80.8)	%
Diluted shares		26.2			26.8

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 June 30,
Dollars in millions, except per share data		2020		2019		% change
		(unaudited)
Revenue		$	514.7			$	553.8			(7.1)	%
Transportation costs		426.7			453.2			(5.8)	%
Net revenue(1)		$	88.0			$	100.6			(12.5)	%
Net income		$	1.0			$	5.1			(81.2)	%
Depreciation		7.0			6.8			4.1	%
Amortization		2.8			3.0			(8.8)	%
Non-cash interest expense		0.2			2.2			(90.0)	%
Cash interest expense		1.2			1.3			(12.5)	%
Income tax expense		0.4			2.1			(79.9)	%
EBITDA(1)		$	12.6			$	20.5			(38.6)	%
Change in contingent consideration		(0.1)			0.2			(138.1)	%
Stock compensation expense		2.3			2.4			(4.4)	%
Adjusted EBITDA(1)		$	14.8			$	23.1			(35.9)	%
Fully diluted EPS		$	0.04			$	0.19			(80.8)	%
Change in contingent consideration		(0.00)			0.01			(138.9)	%
Amortization		0.11			0.11			(6.8)	%
Non-cash interest expense		0.01			0.08			(89.8)	%
Stock compensation expense		0.09			0.09			(2.3)	%
Tax effect of adjustments		(0.05)			(0.06)			(26.3)	%
Non-GAAP fully diluted EPS(1)		$	0.19			$	0.42			(54.9)	%
Operating Metrics
Net revenue margin(1)		17.1	%		18.2	%		(106)		bps
Total employees

FAQ

What were Echo Global Logistics' Q2 2020 revenues?

Echo Global Logistics reported Q2 2020 revenues of $514.7 million, a decrease of 7.1% from the previous year.

How did net income change for Echo Global Logistics in Q2 2020?

Net income for Echo Global Logistics in Q2 2020 decreased to $1.0 million, down 81.2% compared to Q2 2019.

What is the fully diluted EPS for Echo Global Logistics for Q2 2020?

The fully diluted EPS for Echo Global Logistics in Q2 2020 was $0.04, a significant decline from $0.19 in Q2 2019.

What trends did Echo Global Logistics see in July 2020?

Echo Global Logistics noted an increase in business volume continuing into July 2020.