Express-1 Expedited Solutions on Wednesday, May 13, reported net income of $5,000 for the first quarter ended March 31 compared to $643,000 for the same quarter in 2008. The overall performance of the company was impacted significantly by a 15 percent reduction in gross revenues due in large part to the current economic recession. The falling price of fuel also had a negative impact on gross revenues as fuel surcharge revenues were down.
“Falling demand and excess capacity made for a very challenging transportation market,” said Mike Welch, chief executive officer of the St. Joseph, Mich.-based company. “Although the economic recession has had a negative impact on the entire transportation market, our asset-light model and its ability to quickly adapt to changing market conditions will enable us to weather these uncertain economic times.”
Welch said that during the quarter, the company right-sized its operations to more efficiently deal with the current economic realities, and that the primarily administrative cuts should result in savings of nearly $2 million for the remainder of the year. “We believe that these reductions will further strengthen our ongoing financial position as we continue through uncertain times,” he said. “Unfortunately, transition costs involved with the right-sizing process prevented material cost reductions within the first quarter of 2009. However, the company is realizing some of the anticipated results early in the second quarter.”
Express-1 continues to have a strong balance sheet in addition to making strides in managing its accounts receivable, Welch said. “As the automotive business has declined, so has our revenue and related accounts receivables associated with the industry,” he said. “We no longer have any customers that represent over 5 percent of our outstanding receivables, and the combined total of the Big Three automotive manufacturers represents less than 4 percent of our receivables as of March 31, 2009.”
Welch said cash flow remains healthy overall and that as of March 31, the company had an additional $4.3 million of capacity on its line of credit. “The company anticipates no additional significant capital needs for 2009,” he said, adding that the company remains in compliance with all of its debt covenants as of March 31.
Express-1 Expedited Solutions provides — through its Express-1, Concert Group Logistics and Bounce Logistics operating companies — same-day delivery, time-sensitive shipping and premium freight brokerage throughout North America, as well as domestic and international freight forwarding.
