Stonepath (AMEX:STG)
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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.