Velocity Express Corp., a provider of time-definite regional delivery solutions, announced today, Feb. 13, operating results for the second quarter and six-month period.
Revenue for the quarter ended Dec. 29 was $86.1 million compared to $102.3 million in the December quarter of 2006. The company reported gross profit excluding depreciation for the quarter of $20.6 million compared to gross profit of $22.0 million for the same quarter last year. Operating expenses included in adjusted EBITDA were $22.1 million compared to $25.5 million in the same quarter last year. Adjusted EBITDA improved $2 million to a loss of $1.5 million compared to a $3.5 million loss in the prior-year quarter. Operating loss for the quarter was $3.9 million compared to an operating loss of $8.7 million in 2006.
“During the quarter, we continued to reduce the amount of unfavorable low-margin legacy-CD&L contracts while also seeing the anticipated decline in business from financial institutions as they adopted electronic check-clearing technologies,” said Vincent A. Wasik, chairman and chief executive officer of Westport, Conn.-based Velocity Express. “Additionally, revenues were moderated by an uncertain and slowing economic environment. While we are not satisfied with our results for the quarter, it is important to note that we saw a significant reduction in our loss from the same quarter last year and have taken steps to accelerate our planned improvements in gross margin and SG&A cost reduction in order to achieve sustainable positive cash flow and profitability.”
Wasik said Velocity Express continues to see strong demand from retail and healthcare companies seeking to lower their costs, and as a result, the company’s sales pipeline exceeds $118 million for those market sectors. “We also continue to build our franchise strategy, with 12 new signings during the quarter, bringing total franchise markets to 20,” he said.
“Based on our progress solidifying our core platform for growth, we have increased our focus on our Global Alliance initiative to capture the significant long-term opportunity we see in the worldwide marketplace,” Wasik said. “Strategically, it makes sense for us to partner with logistics suppliers in other countries and other segments of the logistics industry. Our partners will gain access to Velocity’s nationwide ‘last-mile’ delivery network in the U.S. and our technology tools and systems. Velocity will gain increased in-bound delivery volumes and be able to offer its U.S. retail customers a fully integrated solution providing 100 percent end-to-end package-level visibility from factory door to store floor. In January, we took a significant step by enlisting ALC Advisors in Shanghai to assist us in the Asian component of this strategy. We are also in discussions with potential partners in other regions of the globe and other industry segments.”