Target Logistics, Inc. Announces First Quarter Results and FY 2007 Guidance

  
    
  
  
    
      Target Logistics, Inc. (Amex: TLG), a domestic and international freight 
      forwarder and logistics provider, today announced that first quarter 
      revenue was $43.4 million, an increase of 20% from the $36.1 million 
      reported in the comparable FY 2006 period, reflecting both organic 
      growth and the acquisition of certain assets of Discovery Air Cargo, 
      Inc., a freight forwarder providing a full range of services to the New 
      York City and Long Island area, completed in July of this year.
    
    
      Net income for the first quarter ended September 30, 2006 of $276,952 or 
      $.01 per diluted share ($0.02 per basic share) compared to $477,078 or 
      $.02 per diluted share ($0.03 per basic share) reported in the first 
      quarter ended September 30, 2005.
    
    
      “Our strong top line performance and the 
      trending decline in SG&A as a percentage of revenue continue.” 
      said Stuart Hettleman, President and Chief Executive Officer. “However, 
      less than expected revenue with smaller gross profit margins from our 
      Discovery acquisition, a greater percentage of international import 
      revenue overall and a lower amount of domestic value-added services 
      caused gross margins to decline, and led to a reduction in net income 
      for the quarter compared to last year.
    
    
      “As a result of the performance of our 
      Discovery Acquisition concluded in July of 2006, our New York Station’s 
      profitability compared to the first quarter of fiscal 2006 was 
      negatively impacted. We are taking steps to improve the performance of 
      the Discovery acquisition and believe it will become a positive 
      contributor in the near future.”
    
    
      Philip Dubato, Chief Financial Officer of Target Logistics said, “Our 
      balance sheet is solid, with cash and available credit of $14.5 million. 
      In addition SG&A as a percentage of revenue for the quarter was 28.3% 
      compared to 30.3% for the first quarter of fiscal 2006, a continuation 
      of our trend, which is now in its fifth year, of consistent reductions 
      in SG&A as a percentage of revenue.”
    
    
      The company noted that for the year ending June 30, 2007, it expects to 
      see revenue range from $185 million to $195 million, an increase of 
      15-22%. The Company projects a net profit range of $0.12 to $0.15 per 
      diluted share, compared to $0.13 per diluted share, reported in fiscal 
      2006.
    
    
      Target Logistics will hold a conference call at 4:00 PM. ET on 
      Thursday, November 2, 2006. 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=1406480. 
      The call will also be available by dialing [phone], or for 
      international callers, [phone] and by using the confirmation code 
      32173091. A replay of the teleconference will be available until 
      December 2, 2006 at www.targetlogistics.com. 
      A replay will also be available by dialing [phone] (domestic) 
      or 617 801 6888 (international) and by using confirmation code 60907828.
    
    
      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 ended September 30,
        
      
      
        
        
        
          2006 
        
        
        
        
          2005 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Operating revenues
        
        
          $
        
        
          43,448,062 
        
        
        
        
          $
        
        
          36,145,785 
        
      
      
        
          Cost of transportation
        
        
           
        
        
          30,568,618 
        
        
        
        
           
        
        
          24,305,199 
        
      
      
        
          Gross profit
        
        
        
        
          12,879,444 
        
        
        
        
        
        
          11,840,586 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Selling, general and administrative expenses ("SG&A"):
        
        
        
        
        
        
        
      
      
        
          Target subsidiary (exclusive forwarder commissions)
        
        
        
        
          4,240,820 
        
        
        
        
        
        
          3,897,923 
        
      
      
        
          SG&A - Target subsidiary
        
        
        
        
          7,616,572 
        
        
        
        
        
        
          6,651,863 
        
      
      
        
          SG&A - Corporate
        
        
        
        
          275,717 
        
        
        
        
        
        
          288,159 
        
      
      
        
          Depreciation and amortization
        
        
           
        
        
          176,383 
        
        
        
        
           
        
        
          122,122 
        
      
      
        
          Selling, general and administrative expenses
        
        
        
        
          12,309,492 
        
        
        
        
        
        
          10,960,067 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Operating income
        
        
        
        
          569,952 
        
        
        
        
        
        
          880,519 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Other income (expense):
        
        
        
        
        
        
        
      
      
        
          Interest (expense)
        
        
        
        
          (33,249)
        
        
        
        
        
        
          (34,083)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Income before taxes
        
        
        
        
          536,703 
        
        
        
        
        
        
          846,436 
        
      
      
        
          Provision for income taxes
        
        
           
        
        
          259,751 
        
        
        
        
           
        
        
          369,358 
        
      
      
        
          Net income
        
        
          $
        
        
          276,952 
        
        
        
        
          $
        
        
          477,078 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Net Income per share attributable to common shareholders:
        
        
        
        
        
        
        
      
      
        
          Basic
        
        
          $
        
        
          0.02 
        
        
        
        
          $
        
        
          0.03 
        
      
      
        
          Diluted
        
        
          $
        
        
          0.01 
        
        
        
        
          $
        
        
          0.02 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average shares outstanding:
        
        
        
        
        
        
        
      
      
        
          Basic
        
        
           
        
        
          17,977,278 
        
        
        
        
           
        
        
          15,858,427 
        
      
      
        
          Diluted
        
        
           
        
        
          21,480,385 
        
        
        
        
           
        
        
          21,470,288 
        
      
    
    
    
    
      
        
          Target Logistics, Inc. and Subsidiaries
        
      
      
        
          Selected Balance Sheet Data
        
      
      
        
           
        
      
      
        
        
        
          September 30,
        
        
        
        
          June 30,
        
      
      
        
        
        
           
        
        
          2006 
        
        
        
        
           
        
        
          2006 
        
      
      
        
        
        
          (unaudited)
        
        
        
        
          (audited)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Cash and Cash Equivalents
        
        
          $
        
        
          6,699,098 
        
        
        
        
          $
        
        
          7,015,018 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Total Current Assets
        
        
          $
        
        
          33,321,440 
        
        
        
        
          $
        
        
          29,797,740 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Total Assets
        
        
          $
        
        
          48,523,077 
        
        
        
        
          $
        
        
          45,250,881 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Current Liabilities
        
        
          $
        
        
          26,067,397 
        
        
        
        
          $
        
        
          23,014,672 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Long Term Liabilities
        
        
          $
        
        
          380,468 
        
        
        
        
          $
        
        
          555,199 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Working Capital
        
        
          $
        
        
          7,254,043 
        
        
        
        
          $
        
        
          6,783,068 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Shareholders' Equity
        
        
          $
        
        
          22,075,212 
        
        
        
        
          $
        
        
          21,681,010 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Credit Line Availability
        
        
          $
        
        
          7,797,506 
        
        
        
        
          $
        
        
          11,274,357 
        
      
    
    
    
  
Target Logistics, Inc. (Amex: TLG), a domestic and international
freight forwarder and logistics provider, today announced that first
quarter revenue was $43.4 million, an increase of 20% from the $36.1
million reported in the comparable FY 2006 period, reflecting both
organic growth and the acquisition of certain assets of Discovery Air
Cargo, Inc., a freight forwarder providing a full range of services to
the New York City and Long Island area, completed in July of this
year.

   Net income for the first quarter ended September 30, 2006 of
$276,952 or $.01 per diluted share ($0.02 per basic share) compared to
$477,078 or $.02 per diluted share ($0.03 per basic share) reported in
the first quarter ended September 30, 2005.

   "Our strong top line performance and the trending decline in SG&A
as a percentage of revenue continue." said Stuart Hettleman, President
and Chief Executive Officer. "However, less than expected revenue with
smaller gross profit margins from our Discovery acquisition, a greater
percentage of international import revenue overall and a lower amount
of domestic value-added services caused gross margins to decline, and
led to a reduction in net income for the quarter compared to last
year.

   "As a result of the performance of our Discovery Acquisition
concluded in July of 2006, our New York Station's profitability
compared to the first quarter of fiscal 2006 was negatively impacted.
We are taking steps to improve the performance of the Discovery
acquisition and believe it will become a positive contributor in the
near future."

   Philip Dubato, Chief Financial Officer of Target Logistics said,
"Our balance sheet is solid, with cash and available credit of $14.5
million. In addition SG&A as a percentage of revenue for the quarter
was 28.3% compared to 30.3% for the first quarter of fiscal 2006, a
continuation of our trend, which is now in its fifth year, of
consistent reductions in SG&A as a percentage of revenue."

   The company noted that for the year ending June 30, 2007, it
expects to see revenue range from $185 million to $195 million, an
increase of 15-22%. The Company projects a net profit range of $0.12
to $0.15 per diluted share, compared to $0.13 per diluted share,
reported in fiscal 2006.

   Target Logistics will hold a conference call at 4:00 PM. ET on
Thursday, November 2, 2006. 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=1406480.
The call will also be available by dialing [phone], or for
international callers, [phone] and by using the confirmation
code 32173091. A replay of the teleconference will be available until
December 2, 2006 at www.targetlogistics.com. A replay will also be
available by dialing [phone] (domestic) or 617 801 6888
(international) and by using confirmation code 60907828.

   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.

-0-
*T
               Target Logistics, Inc. and Subsidiaries
                Consolidated Statements of Operations
                             (unaudited)

                                      Three months ended September 30,
                                      --------------------------------
                                          2006              2005
                                      -------------     --------------

Operating revenues                    $ 43,448,062      $  36,145,785
Cost of transportation                  30,568,618         24,305,199
                                      -------------     --------------
     Gross profit                       12,879,444         11,840,586


Selling, general and administrative
 expenses ("SG&A"):
Target subsidiary (exclusive forwarder
 commissions)                            4,240,820          3,897,923
SG&A - Target subsidiary                 7,616,572          6,651,863
SG&A - Corporate                           275,717            288,159
Depreciation and amortization              176,383            122,122
                                      -------------     --------------
     Selling, general and
      administrative expenses           12,309,492         10,960,067

Operating income                           569,952            880,519

Other income (expense):
     Interest (expense)                    (33,249)           (34,083)

Income before taxes                        536,703            846,436
     Provision for income taxes            259,751            369,358
                                      -------------     --------------
Net income                            $    276,952      $     477,078
                                      -------------     --------------

Net Income per share attributable to
 common shareholders:
     Basic                            $       0.02      $        0.03
                                      -------------     --------------
     Diluted                          $       0.01      $        0.02
                                      -------------     --------------

Weighted average shares outstanding:
     Basic                              17,977,278         15,858,427
                                      -------------     --------------
     Diluted                            21,480,385         21,470,288
                                      -------------     --------------
*T

-0-
*T
               Target Logistics, Inc. and Subsidiaries
                     Selected Balance Sheet Data

                                         September 30,    June 30,
                                             2006           2006
                                         -------------  -------------
                                          (unaudited)     (audited)

Cash and Cash Equivalents                $  6,699,098   $  7,015,018

Total Current Assets                     $ 33,321,440   $ 29,797,740

Total Assets                             $ 48,523,077   $ 45,250,881

Current Liabilities                      $ 26,067,397   $ 23,014,672

Long Term Liabilities                    $    380,468   $    555,199

Working Capital                          $  7,254,043   $  6,783,068

Shareholders' Equity                     $ 22,075,212   $ 21,681,010

Credit Line Availability                 $  7,797,506   $ 11,274,357
*T