Stonepath Group Reports Q1 2006 Results
May 12 2006 - 6:50PM
PR Newswire (US)
Continued Strength in Asia Fuels 15% Top Line Gain for
International Division SEATTLE, May 12 /PRNewswire-FirstCall/ --
Stonepath Group (AMEX:STG), a global logistics services
organization, today reported financial results for the quarter
ended March 31, 2006. For the first quarter of 2006, Stonepath
reported revenue of $92.2 million, an improvement of 2.4% compared
to the prior year period. International revenues increased 15.5% to
$66.5 million, while the Company's Domestic segment revenues
declined 20.8% to $25.7 million for the quarter. The Domestic
segment continued to be impacted by the difficult economic
conditions in the U.S. automobile industry and reduced volume from
a major national retail customer. The Company attributes
international revenue growth to continued sales volume increases
from its Asia-based businesses. Net revenues were $19.5 million, a
$0.9 million decrease or 4.4% compared to the prior year period.
The International Services segment delivered $9.9 million of net
revenue in the first quarter of 2006, a period over period
improvement of $0.3 million or 3.7%. The Company's Domestic
Services segment delivered $9.6 million of net revenue in the first
quarter of 2006, a decline of $1.2 million or 11.2% over the same
prior year period. The net revenue decreases were due to domestic
volume reductions, as discussed above, that were partially offset
by margin improvements. Domestic margins improved to 37.3% of
revenues in the first quarter compared to 33.3% for the comparable
period in 2005, principally due to reductions in lower margin
business. International margins decreased to 15.0% of revenues
compared to 16.7% of revenues for the comparable period in 2005.
Lower international margins were due to decreased margins within
the Company's China operations. Stonepath continued to see progress
from its restructuring efforts, including a decrease in personnel
costs of 6.7% due to improved productivity and reduced staffing
driven by lower Domestic Services revenues. Additionally, other
selling, general and administrative costs decreased 16.8% for the
quarter, primarily attributable to lower facilities expenses and
lower legal and accounting related expenses compared to first
quarter of 2005. The Company reported a net loss of $3.5 million,
or $(0.08) per basic and diluted share. This compares to a net loss
of $7.6 million, or $(0.17) per basic and diluted share for the
same prior year period. Included in the Company's net loss for the
first quarter is a $0.3 million charge relating to accounting for
derivatives contained in certain of our financing agreements and
approximately $0.5 million of expense relating to provisions
contained in our U.S. credit facility for the payment of liquidated
damages in the event an effective registration statement is not
provided to the lender within specified timelines. The net loss in
2005 includes restructuring charges of $3.3 million. "Our first
quarter results, generally our weakest due to seasonality, were
nevertheless disappointing," said Dennis L. Pelino, Stonepath's
Chairman. "We are entirely focused on improving our performance
going forward and we continue to implement strategic initiatives
throughout the Company to create long-term value for our customers
and shareholders." Pelino added, "The explosive economic markets of
the Asia Pacific region, specifically the PRC, offer continued
growth opportunities for global logistics service providers, and we
are aligning Stonepath to capitalize on these trends in increased
trade while working to improve our margins in our China business."
Jason Totah, Chief Executive Officer, continued, "Our focus remains
on developing new customer partnerships that will successfully
leverage our strong service suite of global, integrated logistics
solutions." About Stonepath Group (AMEX:STG) Stonepath
(http://www.stonepath.com) is a global, third-party logistics
organization providing a full range of transportation and
distribution solutions to multinational and local businesses
including a diverse client mix of retail leaders, automotive and
technology concerns, government agencies, and defense contractors.
Through strategic acquisitions and organic growth, the Company has
expanded rapidly, establishing a network of owned operations
throughout the U.S., the Asia-Pacific region and Latin America. 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. Although 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
2005), other public documents and recent press releases, which can
be found on our corporate web site, http://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. DATASOURCE: Stonepath Group
CONTACT: John Brine of Stonepath Group, +1-212-254-8280 Web site:
http://www.stonepath.com/
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