Seeking Alpha
Profile| Send Message|
( followers)  

Echo Global Logistics (NASDAQ:ECHO) provides web-based shipping and freight management services. The company is expected to go public this week. The company originally filed for the IPO in April 2008

Business Overview (from prospectus)

We are a leading provider of technology enabled transportation and supply chain management services, delivered on a proprietary technology platform, serving the transportation and logistics needs of our clients. Our web-based technology platform compiles and analyzes data from our network of over 22,000 transportation providers to serve our clients' shipping and freight management needs. Our technology platform, composed of web-based software applications and a proprietary database, enables us to identify excess transportation capacity, obtain competitive rates, and execute thousands of shipments every day while providing high levels of service and reliability. Transportation involves the physical movement of goods, and logistics relates to the management and flow of those goods from origin to destination. We focus primarily on arranging transportation across the major modes, including truckload (TL), less than truck load (LTL) and small parcel, and we also offer inter-modal (which involves moving a shipment by rail and truck), domestic air, expedited and international transportation services.

Offering: 5.7 million shares at $13 - $15 per share. Net proceeds of approximately $70.8 million will be used to expand the company's sales force, to enhance the company's technology, to acquire or make strategic investments in complementary businesses and for working capital and other general corporate purposes.

Lead Underwriters: Morgan Stanley (NYSE:MS), Credit Suisse (NYSE:CS)

Financial Highlights:

Our revenue increased by $19.5 million, or 21.7%, to $109.4 million during the six months ended June 30, 2009 from $89.9 million during the six months ended June 30, 2008...Gross profit increased by $5.4 million, or 28.1%, to $24.3 million during the six months ended June 30, 2009 from $18.9 million during the six months ended June 30, 2008... Commission expense increased by $2.1 million, or 45.7%, to $6.9 million during the six months ended June 30, 2009 from $4.8 million during the six months ended June 30, 2008. As a percentage of gross profit, commission expense increased to 28.6% during the six months ended June 30, 2009 from 25.2% during the six months ended June 30, 2008... Commission expense increased by $2.1 million, or 45.7%, to $6.9 million during the six months ended June 30, 2009 from $4.8 million during the six months ended June 30, 2008. As a percentage of gross profit, commission expense increased to 28.6% during the six months ended June 30, 2009 from 25.2% during the six months ended June 30, 2008.

Competitors:

We believe the principal elements of competition in transportation and logistics services are price, customer service and reliability. Some of our competitors, such as C.H. Robinson Worldwide (NASDAQ:CHRW), have larger client bases and significantly more resources than we do. In addition, some of our competitors may have more expertise in a single transportation mode that allows them to prepare and process documentation and perform related activities pertaining to that mode of transportation more efficiently than Echo. We compete against these entities by establishing ourselves as a leading technology enabled service provider with industry expertise in all major modes of transportation, which enables us to respond rapidly to the evolving needs of our clients related to outsourcing transportation.

Additional Resources:

Source: Echo Global Logistics Expected to Deliver IPO This Week