Express-1 attributes lower 1Q net income to tax provision

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Express-1 Expedited Solutions on Thursday, May 10, reported higher revenues and operating income for the first quarter ended March 31. The provider of ground expedited services for the automotive, manufacturing, logistics, service and other industries reported a 20.3 percent increase in revenue in the first quarter. Revenues grew to $11.5 million as compared to $9.6 million in the first quarter of 2006. During the same period, income from operations (income before income tax provision) increased by 32.7 percent to $739,000 versus $557,000 in the first quarter of 2006.

The company’s GAAP net income was $461,000 for the first quarter of 2007, as compared to $557,000 for the first quarter of 2006. Express-1 said the decline is related solely to the recording of a current tax provision during 2007. The company recorded a provision for income taxes at the rate of about 37.5 percent of pre-tax earnings in its most recent quarter. The company did not record a tax provision in the same period in 2006 because of a large valuation allowance on its deferred taxes.

As of Dec. 31, 2006, Express-1 had cumulative tax net operating loss carry-forwards of about $8.3 million. The company estimates this balance has been reduced to about $7.5 million through March 31 based upon earnings in the current quarter. The net operating loss carry-forwards will be used to offset future taxable income in the determination of tax payments, thereby reducing the company’s cash outlay for income taxes until the net operating losses are exhausted. For the first quarter of 2007, EBITDA increased by 15.4 percent to $994,000 compared with $861,000 in the first quarter of 2006.

“Express-1 built on the success we achieved in 2006, as evidenced by our strong growth on the top line and income from operations,” said Michael Welch, president and chief executive officer of Buchanan, Mich.-based Express-1. “We have increased our fleet of independent contractors or value providers — ‘VP’s,’ as we call them — and continue to give them more loaded miles and other services designed to enhance their quality of life as drivers.”

Welch said Express-1 successfully executed its organic growth strategy during the quarter. “Capacity improved, and our market share increased through new accounts and additional business from existing accounts,” he said.