Stonepath Group Reports Q2 2005 Results, $2.1 Million Of EBITDA; Continued Improvement Expected in Second Half
August 09 2005 - 4:01PM
Business Wire
Stonepath Group (AMEX: STG), a global logistics services
organization, has reported financial results for the three and six
months ended June 30, 2005. Second Quarter Results For the second
quarter of 2005, Stonepath reported revenue of $100.0 million, an
increase of $13.6 million, or 15.7 percent, over the prior-year
period. Net revenue was $22.1 million, an increase over the
prior-year period of $3.1 million, or 16.0 percent. The Company
reported a net loss of $0.4 million in the second quarter, or $0.01
per basic and diluted share, including a restructuring charge of
$0.1 million incurred in connection with our previously announced
restructuring program. This compares to a net loss of $1.4 million
or $0.03 per diluted share for the same prior-year period. For the
second quarter of 2005, EBITDA was $2.1 million compared to $0.2
million for the second quarter of 2004, an improvement of $1.9
million compared to the corresponding prior-year period. (1) Higher
international volumes and slightly higher domestic margins offset
by slightly higher operating costs provided improved operating
results in 2005. First Half Results For the first half of 2005,
Stonepath reported revenues of $190.0 million, an increase of $43.3
million, or 29.5 percent, including the results of the Shaanxi
acquisition concluded in March 2004. Net revenue increased over the
prior-year period by $6.7 million, or 18.8 percent, to $42.5
million. The Company reported a net loss of $7.9 million in the
first half of 2005 or $0.18 per basic and diluted share. This
compares to a net loss of $7.1 million or $0.17 per diluted share
for the same prior-year period. The net loss in 2005 includes
restructuring charges of $3.4 million or $0.08 per share while the
net loss in 2004 reflects a provision for excess earn-out payments
of $3.1 million or $0.08 per diluted share. Strategic and
Operational Progress Drive EBITDA Improvement Dennis Pelino,
Stonepath's Chairman, commented, "Management's focus remains on
strategic expansion, organizational discipline and client
development initiatives that will bring Stonepath sustained growth
in the future. Our improved second quarter financial performance
reflects successful restructuring initiatives and increased cost
efficiencies while a steady flow of new business drives organic
growth. Building on a global platform structured to benefit from
this robust international trade environment, our centralization and
integration initiatives in the U.S. and our offshore strategic
expansion efforts are on pace to deliver steadily improving
performance." Positive Trends Expected to Continue into 2006 Jason
Totah, Stonepath Group's Chief Executive Officer, noted, "We are
very encouraged by the new business activity we are generating -- a
clear sign that our fully integrated global solution set is being
embraced by shippers seeking a long-term logistics partner in this
competitive marketplace. We expect to see these positive trends
continue into 2006, supported by investment in our innovative,
end-to-end global logistics service offerings, which are
translating into a competitive advantage for our client base." (1)
Supplemental Pro Forma Information We believe that supplemental
disclosure of our EBITDA, or earnings before interest, taxes,
depreciation and amortization is a useful measure for investors
because it eliminates the effect of these non-cash costs and
provides an important metric for our business. A reconciliation of
EBITDA amounts to the most directly comparable GAAP measures for
the three months ended June 30, 2005 and 2004 is shown below: -0-
*T Second Quarter -------------- 2005 2004 ---- ---- Net loss, as
reported ($383,126) ($1,386,806) Income tax expense 671,798 444,371
Interest expense 695,067 59,304 Depreciation and amortization
1,138,374 1,132,942 ---------- ----------- EBITDA $2,122,113 $
249,811 ========== =========== *T This supplemental pro forma
financial information is presented for informational purposes only
and is not a substitute for the historical financial information
presented in accordance with accounting principles generally
accepted in the United States. Investor Conference Call Stonepath
will host a conference call for shareholders and the investing
community on Wednesday, August 10, 2005 at 1:00 p.m. Eastern Time
(10 a.m. Pacific). The call can be accessed by dialing (800)
344-0961 (US) or (706) 634-0981 (International) and is expected to
last approximately 30 minutes. Callers are requested to dial in at
least five minutes before the start of the call. An audio replay
will be available until August 17, 2005 at (800) 642-1687 or (706)
645-9291(International), access code: 8357892. About Stonepath
Group (AMEX:STG) Stonepath (www.stonepath.com) is a global,
third-party logistics organization providing a full range of
transportation and distribution solutions to multinational and
local businesses. Through an aggressive acquisition strategy and
strong organic growth, the Company has expanded rapidly,
establishing a network of owned operations throughout the U.S., the
Asia-Pacific region and Latin America. Stonepath provides a
full-range of time-definite transportation and distribution
solutions to a diverse client mix of retail leaders, automotive and
technology concerns, government agencies, and defense contractors.
For more information about the Company, please contact John Brine
at (212) 254-8280. This Press Release includes forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, regarding future results, levels of activity,
events, trends or plans. We have based these forward-looking
statements on our current expectations and projections about such
future results, levels of activity, events, trends or plans. These
forward-looking statements are not guarantees and are subject to
known and unknown risks, uncertainties and assumptions about us
that may cause our actual results, levels of activity, events,
trends or plans to be materially different from any future results,
levels of activity, events, trends or plans expressed or implied by
such forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "guidance,"
"may," "will," "should," "could," "would," "expect," "plan,"
"anticipate," "believe," "estimate," "continue" or the negative of
such terms or other similar expressions. While it is impossible to
identify all of the factors that may cause our actual results,
levels of activity, events, trends or plans to differ materially
from those set forth in such forward-looking statements, such
factors include the inherent risks associated with: (i) our ability
to sustain an annual growth rate in revenue consistent with recent
results, (ii) our ability to achieve our targeted operating
margins, (iii) our ability to compute our restructuring efforts
within the costs we now expect, (iv) our ability to realize the
planned benefits from our restructuring efforts, (v) our dependence
on certain large customers, (vi) our dependence upon certain key
personnel, (vii) an unexpected adverse result in any legal
proceeding, (viii) competition in the freight forwarding, logistics
and supply chain management industry, (ix) the impact of current
and future laws affecting the Company's operations, (x) adverse
changes in general economic conditions as well as economic
conditions affecting the specific industries and customers we
serve, and (xi) regional disruptions in transportation. Other
factors that might cause or contribute to such a discrepancy
between expected and actual results include, but are not limited
to, those factors identified in our Securities and Exchange
Commission filings (including our Annual Report on Form 10-K for
2004), other public documents and recent press releases, which can
be found on our corporate web site, www.stonepath.com. Readers are
cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date made. We undertake no
obligation to publicly release the result of any revision of these
forward-looking statements to reflect events or circumstances after
the date they are made or to reflect the occurrence of
unanticipated events.
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