Target Logistics, Inc. Announces 2007 Second Quarter Results

  
    
  
  
    
      Target Logistics, Inc. (Amex: TLG), a domestic and international freight 
      forwarder and logistics provider, today announced net income for the 
      second quarter of FY 2007, ended December 31, 2006, of $589,504 or $.03 
      per diluted and basic share, compared to $976,314 or $.05 per diluted 
      and basic share reported in the second quarter ended December 31, 2005. 
      Second quarter revenue was $47.6 million, compared to the $46.7 million 
      reported in the comparable 2006 fiscal period.
    
    
      Operating income for the FY 2007 second quarter was $1,115,275 compared 
      to the $1,767,117 reported in the comparable FY 2006 second quarter.
    
    
      For the six month period ended December 31, 2006, net income was 
      $866,456 or, $0.04 per basic and diluted share compared to $1.453 
      million, or $.07 per diluted share ($0.08 per basic share) for the six 
      month period ended December 31, 2005. Six month revenue increased 10% to 
      $91.0 million from the $82.8 million reported in the comparable FY 2006 
      period.
    
    
      Operating income for the six month period of FY 2007 was $1,685,227 
      compared to the $2,647,636 reported in the FY 2006 comparable six month 
      period.
    
    
      “Although we had indicated that the first half 
      of FY 2007 would be challenging, it was more so, given the absence of 
      the normal peak season in the second quarter, which occurred throughout 
      our industry," said Stuart Hettleman, President and CEO. “Coupled 
      with a difficult comparison with Q2 FY 2006 -- a very strong period for 
      Target -- revenue for the quarter rose only 2%.
    
    
      “Despite our disappointing first six months, 
      management views the second half of FY ’07 as 
      a much stronger period for Target. This outlook is based on a number of 
      factors: We have gained a number of new accounts, have a number of 
      important new accounts pending and are expecting an increase in freight 
      volume from existing clients. In addition, the acquisition we made in 
      July of 2006 in our New York City station -- whose performance had 
      negatively impacted gross margins and net income and whose improvement I 
      had indicated was an important priority -- turned profitable in 
      December. The performance of this important Target station should 
      progress further for the remainder of the year. Finally, Target’s 
      October 2006 acquisition in Albany, New York, has been fully integrated 
      and was accretive to earnings during its first quarter of operations.
    
    
      “Accordingly, we are reaffirming our guidance 
      for FY 2007,” concluded Mr. Hettleman. “We 
      expect revenue to grow 15-22% for the year, and fully diluted earnings 
      per share of $0.12 to $0.15."
    
    
      Philip Dubato, Chief Financial Officer of Target Logistics said, “As 
      of December 31, 2006, we had over $16.9 million in cash and available 
      credit to support our plans for growth. Our credit facility comes up for 
      renewal this March and due to our 17 consecutive profitable quarters and 
      the continual improvement to our balance sheet over the past 3 years, we 
      are confident that we will be able to obtain more favorable terms and 
      provide greater flexibility to our credit facility which will further 
      support our strategies for internal growth and ability to make 
      additional strategic acquisitions.”
    
    
      Target Logistics will hold a conference call at 4:00 PM. ET on 
      Thursday, February 1, 2007. Interested parties are invited 
      to listen to the call live, over the Internet at www.targetlogistics.com. 
      The live call may also be accessed at http://phx.corporate-ir.net/playerlink.zhtml?c=62341&s=wm&e=1465749. 
      The call will also be available by dialing [phone], or 
      for international callers, [phone] and by using the 
      confirmation code 59842221. A replay of the teleconference will 
      be available until February 14, 2007 at www.targetlogistics.com. 
      A replay will also be available by dialing [phone] 
      (domestic) or [phone] (international) and by using 
      confirmation code 18159204.
    
    
      Target Logistics, Inc. provides domestic and international time definite 
      freight forwarding and logistics services through its wholly owned 
      subsidiary, Target Logistic Services, Inc. Target has a network of 
      offices in 35 cities throughout the United States and a worldwide agent 
      network with coverage in over 70 countries. Its freight forwarding 
      services include arranging for the total transport of customers' 
      freight, including providing door to door service, distributions and 
      reverse logistics.
    
    
      Statements contained in this press release that are not historical facts 
      are forward-looking statements as that term is defined in the Private 
      Securities Litigation Reform Act of 1995. Although Target Logistics 
      believes that the expectations reflected in such forward-looking 
      statements are reasonable, the forward-looking statements are subject to 
      risks and uncertainties that could cause actual results to differ 
      materially from those projections.
    
    
      
        
          Target Logistics, Inc. and Subsidiaries
        
      
      
        
          Consolidated Statements of Operations
        
      
      
        
          (unaudited)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          
            Three months endedDecember 31,
          
        
        
           
        
        
          
            Six months endedDecember 31,
          
        
      
      
        
        
        
        
        
           
        
        
          2006 
        
        
        
        
           
        
        
          2005 
        
        
        
        
           
        
        
          2006 
        
        
        
        
           
        
        
          2005 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating revenues
        
        
        
        
          $
        
        
          47,550,567 
        
        
        
        
          $
        
        
          46,704,140 
        
        
        
        
          $
        
        
          90,998,629 
        
        
        
        
          $
        
        
          82,849,925 
        
      
      
        
          Cost of transportation
        
        
        
        
           
        
        
          33,644,422 
        
        
        
        
           
        
        
          32,497,640 
        
        
        
        
           
        
        
          64,213,040 
        
        
        
        
           
        
        
          56,802,839 
        
      
      
        
          Gross profit
        
        
        
        
        
        
          13,906,145 
        
        
        
        
        
        
          14,206,500 
        
        
        
        
        
        
          26,785,589 
        
        
        
        
        
        
          26,047,086 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Selling, general and administrative expenses ("SG&A"):
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Target subsidiary (exclusive forwarder commissions)
        
        
        
        
        
        
          4,241,084 
        
        
        
        
        
        
          4,887,904 
        
        
        
        
        
        
          8,481,904 
        
        
        
        
        
        
          8,785,827 
        
      
      
        
          SG&A - Target subsidiary
        
        
        
        
        
        
          8,027,904 
        
        
        
        
        
        
          7,016,417 
        
        
        
        
        
        
          15,644,476 
        
        
        
        
        
        
          13,668,280 
        
      
      
        
          SG&A - Corporate
        
        
        
        
        
        
          297,190 
        
        
        
        
        
        
          376,348 
        
        
        
        
        
        
          572,907 
        
        
        
        
        
        
          664,507 
        
      
      
        
          Depreciation and amortization
        
        
        
        
           
        
        
          224,692 
        
        
        
        
           
        
        
          158,714 
        
        
        
        
           
        
        
          401,075 
        
        
        
        
           
        
        
          280,836 
        
      
      
        
          Selling, general and administrative expenses
        
        
        
        
        
        
          12,790,870 
        
        
        
        
        
        
          12,439,383 
        
        
        
        
        
        
          25,100,362 
        
        
        
        
        
        
          23,399,450 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating income
        
        
        
        
        
        
          1,115,275 
        
        
        
        
        
        
          1,767,117 
        
        
        
        
        
        
          1,685,227 
        
        
        
        
        
        
          2,647,636 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other income (expense):
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Interest (expense)
        
        
        
        
           
        
        
          (50,865)
        
        
        
        
           
        
        
          (43,825)
        
        
        
        
           
        
        
          (84,114)
        
        
        
        
           
        
        
          (77,908)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income before taxes
        
        
        
        
        
        
          1,064,410 
        
        
        
        
        
        
          1,723,292 
        
        
        
        
        
        
          1,601,113 
        
        
        
        
        
        
          2,569,728 
        
      
      
        
          Provision for income taxes
        
        
        
        
           
        
        
          474,906 
        
        
        
        
           
        
        
          746,978 
        
        
        
        
           
        
        
          734,657 
        
        
        
        
           
        
        
          1,116,336 
        
      
      
        
          Net income
        
        
        
        
          $
        
        
          589,504 
        
        
        
        
          $
        
        
          976,314 
        
        
        
        
          $
        
        
          866,456 
        
        
        
        
          $
        
        
          1,453,392 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Preferred stock dividends
        
        
        
        
           
        
        
          62,145 
        
        
        
        
           
        
        
          103,902 
        
        
        
        
           
        
        
          62,145 
        
        
        
        
           
        
        
          231,079 
        
      
      
        
          Net income applicable to common shareholders
        
        
        
        
          $
        
        
          527,359 
        
        
        
        
          $
        
        
          872,412 
        
        
        
        
          $
        
        
          804,311 
        
        
        
        
          $
        
        
          1,222,313 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net Income per share attributable to common shareholders:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Basic
        
        
        
        
          $
        
        
          0.03 
        
        
        
        
          $
        
        
          0.05 
        
        
        
        
          $
        
        
          0.04 
        
        
        
        
          $
        
        
          0.08 
        
      
      
        
          Diluted
        
        
        
        
          $
        
        
          0.03 
        
        
        
        
          $
        
        
          0.05 
        
        
        
        
          $
        
        
          0.04 
        
        
        
        
          $
        
        
          0.07 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average shares outstanding:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Basic
        
        
        
        
           
        
        
          18,076,735 
        
        
        
        
           
        
        
          16,070,811 
        
        
        
        
           
        
        
          18,027,007 
        
        
        
        
           
        
        
          15,964,619 
        
      
      
        
          Diluted
        
        
        
        
           
        
        
          21,480,385 
        
        
        
        
           
        
        
          21,490,385 
        
        
        
        
           
        
        
          21,480,385 
        
        
        
        
           
        
        
          21,490,343 
        
      
    
    
      
        
          Target Logistics, Inc. and Subsidiaries
        
      
      
        
          Selected Balance Sheet Data
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          December 31,
        
        
        
        
          June 30,
        
      
      
        
        
        
          2006 
        
        
        
        
          2006 
        
      
      
        
        
        
          (unaudited)
        
        
        
        
          (audited)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Cash and Cash Equivalents
        
        
          $
        
        
          8,164,724 
        
        
        
        
          $
        
        
          7,015,018 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Total Current Assets
        
        
          $
        
        
          37,287,565 
        
        
        
        
          $
        
        
          29,797,740 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Total Assets
        
        
          $
        
        
          53,414,232 
        
        
        
        
          $
        
        
          45,250,881 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Current Liabilities
        
        
          $
        
        
          30,467,054 
        
        
        
        
          $
        
        
          23,014,672 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Long Term Liabilities
        
        
          $
        
        
          344,607 
        
        
        
        
          $
        
        
          555,199 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Working Capital
        
        
          $
        
        
          6,820,511 
        
        
        
        
          $
        
        
          6,783,068 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Shareholders' Equity
        
        
          $
        
        
          22,602,571 
        
        
        
        
          $
        
        
          21,681,010 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Credit Line Availability
        
        
          $
        
        
          8,778,871 
        
        
        
        
          $
        
        
          11,274,357