Express-1 Expedited Solutions Inc. on Monday, Aug. 10, reported net income of $288,000 for the second quarter ended June 30 compared to $774,000 for the same quarter in 2008. The company said its performance was impacted by a soft economy that resulted in a 25 percent reduction in total revenue as compared to the same quarter in 2008, and that the net income generated in the quarter was attributable primarily to operating cost reductions put in place during the first quarter.
“We are cautiously optimistic that both revenue and net income will increase for the remainder of the year, as we are beginning to see increased freight volumes,” said Michael R. Welch, chief executive officer of Express-1 Expedited Solutions, based in Saint Joseph, Mich.
Selling, general and administrative costs decreased by $383,000 in the second quarter of 2009 compared to the same quarter in 2008. The company said the second quarter represented the first period in which the full impact of its cuts was recognized and reduced its overall SG&A expense from 16 percent of gross revenues in the first quarter of 2009 to 13.5 percent of gross revenues in the second quarter of 2009.
“We anticipate this percentage being further reduced as the economy improves and we gain additional efficiencies,” Welch said. “Our ability to manage our SG&A costs will continue to be a critical component of our financial strategy in 2009.”
Express-1 Expedited Solutions Inc. continues to maintain a strong balance sheet by successfully administering its accounts receivables, Welch said. “Our support team has done a tremendous job of managing our accounts receivables,” he said. “We have not realized any major write-offs during the first six months of 2009.” The company said its concentration of risk also remains healthy as it doesn’t have any one customer that represents more than 5 percent of its outstanding receivables; additionally, the combined receivables of the Big Three automotive manufacturers represent only 4 percent of the company’s outstanding accounts receivables as of June 30.
The company said that overall cash flow remains healthy as it has additional available capacity of $4.7 million on its line of credit and no immediate capital expenditure plans. The company said it remains in compliance with all of its debt covenants as of June 30.
