Echo Global Logistics reports lower 4Q net income

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Echo Global Logistics Inc., a provider of technology-enabled transportation and supply chain management services, on Wednesday, Feb. 23, reported total revenue of $113.8 million for the fourth quarter of 2010 ended Dec. 31, a 42 percent increase compared to $80.0 million in the fourth quarter of 2009. The majority of this increase was driven by higher volumes, attributable to both an increase in the number of clients served as well as higher volumes per client for transactional and enterprise clients. Total shipment volume increased by 43 percent.

Transactional revenue of $73.2 million increased 65 percent compared to $44.3 million; the company’s transactional client base increased from 8,714 to 13,289, while revenue per transactional sales person increased by 40 percent due to increased productivity. Enterprise revenue of $40.6 million increased 14 percent compared to $35.7 million, driven by the net addition of 32 new enterprise clients, partially offset by an 11 percent decrease in average revenue per enterprise client, which was partially attributable to reducing low-margin business during the third quarter of 2010.

Net revenue, which represents total revenue less transportation costs, increased 42 percent to $22.6 million compared to $16.0 million; this increase was consistent with Echo’s growth in gross revenue and reflected a more stable pricing environment during the fourth quarter of 2010. Net income was $2.6 million compared to $3.2 million; net income in the fourth quarter of 2009 included a $2.1 million tax gain due to the reduction of a valuation allowance against certain deferred tax assets. Excluding the effect of this tax gain, net income increased 136 percent from $1.1 million to $3.2 million.

“This was a strong quarter for Echo as we continued our track record of high growth and finished the year with impressive 64 percent top-line revenue growth,” said Doug Waggoner, chief executive officer of the Chicago-based company. “We achieved these results by executing on a diversified growth strategy, by investing in our sales organization and our technology, adding 32 new enterprise clients during the year, and successfully integrating strategic acquisitions that expanded our footprint and increased our market share.”

Waggoner said Echo is well-positioned for the improving economic climate and will continue to benefit from executing on its diversified growth strategy. “In 2011, we plan to continue to execute our growth strategy by expanding our sales force, increasing our enterprise client base by 20 to 40 customers, and continue our track record of successfully integrating strategic bolt-on acquisitions that provide growth opportunities,” he said. “The company’s success will continue to be driven by executing on our strategy of capturing underserved small- and mid-market customers.”