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P E O P L E • T E C H N O L O G Y • R E S U L T S
Echo Global Logistics
May 2020
Investor Presentation
Echo Global Logistics
Leading provider of technology-enabled transportation and supply chain management solutions
Proprietary technology platform linking over 35,000 clients with a network of over 50,000 carriers
• Transportation cost savings
• Access to extensive transportation network
• Centralized system to meet all transportation needs
• Dedicated account teams provide superior client
service
• Web-based applications address entire shipment
order and delivery process
• Aligns demand with network capacity
• Increases utilization of assets
• Optimizes open lanes and backhauls
• Lower client service costs
• Shortens billing cycle, improving working capital
Value Proposition to Shippers Value Proposition to Carriers
One of the largest growing 3PLs with TTM gross revenue of $2.2Bn
2
Unique Logistics Platform
Differentiated Relationship-driven
Customer and Carrier Network
Proprietary Technology that Optimizes Brokerage
Value Proposition
Stability and Consistencythrough Freight
and Business Cycles
Track Record of Significant Growth
Projected to Continue
Strong Culture and Management Team
1 2
3 4
5 6
Favorable Long-term Industry Fundamentals
Echo’s Key Attributes and Highlights
3
Broad Cross-Country Employee Network
Critical Component of Value Proposition for Shippers
Service MarketTransportation
SpendTL
Partial
TLLTL Intermodal Expedited
Domestic
AirInternat’l
Small
Parcel
Transactional
(Brokerage)
SMB$25K –
$50MM
National$50MM –
$2Bn+
Managed
Transportation
(Enterprise)
SMB$500K –
$10MM
National$10MM –
$200MM
Indicates primary market
need, offered by Echo
Indicates secondary market
need, offered by Echo
Echo at a Glance
Detroit,MI Chicago,IL
Green Bay,WI
Jacksonville,FL
Denver,CO
Minneapolis,MN
Houston,TX
Yorba Linda,CA
Rochester,NY
Sacramento,CA
Watsonville,CA
San Ramon,CA
Clearwater,FL
Albany,IN
Long Beach,CA
Sandy,UTLockport,IL
Dallas,TX
Kansas City,KS St. Louis,MO
Atlanta,GA
Nashville,TN
Park City,UT
Scottsdale,AZ
Port Sanilac, MI
4
Pittsburgh, PA
• Industry and market share leader, a one-stop-shop for shippers
• Robust pricing engine capable of managing and simplifying
complex pricing structures across multiple carriers and shippers
• Multi-channel automation
• Data capture and analytics tools to optimize pricing and
carrier selection
• Efficient back office integration to manage billing and
payments on high volume, transaction based systems
Product OfferingsDiverse Multimodal Portfolio
Truckload Brokerage
• Differentiated model to efficiently aggregate capacity in
fragmented market
• Centralized, role-based execution
• Highly scalable matching capability
• Quick access to market information
• Highly automated leveraging internal and external data
• Smaller carriers increasingly interested in doing business with
brokers
1. Fleet size available for 87% of loads as of Q1 2020
TL Carrier Profile by Fleet Size (# of trucks) (1)
LTL Brokerage Managed Transportation
• Managed service offering leverages transportation
experts with robust TMS technology
• Ability to drive measureable savings by utilizing Echo’s
multi-modal capabilities
• Highly efficient execution with multiple automation points
for both shippers and carriers
• Moving up market with fee based services
• Strong procurement capability across all modes of
transportation5
< 10 21%
10-50 25%
50-100 13%
100-500 19%
>500 21%
< 10 10 - 50 50 - 100 100 - 500 > 500
6
7 33 95
203 260
426
603
758
884
1,173
1,512
1,716
1,943
2,440
2,185
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Building on a Strong
Track Record of Growth
2009
Echo IPO
2006
Doug Waggoner joins
Echo from USF
Bestway
2005
Echo founded
2005 – 2019
Gross Revenue CAGR
51%
Gross Revenue ($MM)
2014
Echo exceeds $1Bn
in gross revenue
2018
Revenue Exceeds $2.4B
2015
Echo acquires Command
Transportation
Industry Leading Technology Platform
Pricing EnginesAnalytics
Client Facing
Portal
• Proprietary technology designed in-house by
engineering and transportation experts
• Integrated across multiple modes
• Aggregates supply and demand
• Analytics optimized marketplace
• Robust internal and external reporting
Echo Technology Platform
Digital Freight
Matching
Carrier Facing
Portals
Artificial
Intelligence
Visibility Reporting
Echo’s Culture Attracts Top Talent
The Echo Way – Our Core Values
Bring Your Own Do What’s Right Better Is the Only Option
Carry the Load Together Work Hard and Hustle
“The Hub”Learning
Management
System: Live
stream
meetings,
social groups,
knowledge
banks
Echo Engage
Recognition, sentiment
polling, achievements,
performance and career
discussions, real-time
feedback, goals
Echo News Network Intranet streamlining
communication with
real-time updates and
business collaboration
tools
Virtual MeetupsLive streaming
and video chats
Applicant Tracking Promoting internal
movement,
improve hiring
manager
experience and
candidate selection
effectiveness
Award-Winning Culture Connected Workforce
Employees
8
324
2,527
104 114 119 127
107 127 134 142 146
157 161 167 184
214
0
75
150
225
300
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Echo outperformed through financial crisis ($MM)
Attractive Market
Gross Revenue ($Bn)The US 3PL market has grown meaningfully
from $104 billion in 2005 to $214 billion for 2018
Growing US 3PL Market
$203$260
$426
Source Armstrong & Associates Research
Carrier Market (Trucks/Trucking Companies)
‒ Approximately 3 million drivers in U.S., ~80% work for company with <10 trucks
‒ Top 10 truckload (TL) carriers represent 5% of U.S. market
‒ Shortage of drivers makes Echo’s network of carriers more valuable
Brokerage Market
‒ Only a handful of players of meaningful scale
‒ Industry customer service levels improving, but there is large opportunity to differentiate for companies that execute effectively
‒ Remains highly fragmented with hundreds of small brokers
Significant
Brokerage
Opportunity
Sources: Armstrong & Associates, Inc; U.S. Department of Transportation
Highly Fragmented North American Broker and Carrier Market
9
Multiple Growth Drivers
Grow and Enhance
Sales Force
Productivity and
Sales Offering
Placeholder for EPS 2
• Growth of sales force and improvement in average tenure
• Technology enhancements drive efficient productivity gains
• Evolution of managed transportation business to reach larger accounts
• LTL SEO automated selling
Productivity vs Tenure
Capitalize on
Attractive Market
Conditions
• Rising prices and volatility often increase spot market opportunities
• Access to capacity and data analytics provide strategic value in dynamic
freight markets
• Potential for a tighter truckload market in the near future
Leverage TL Scale
and Technology
• Advanced matching and pricing technologies
• Superior access to capacity
• Client centric, and carrier’s first choice
1
4
3
10
Continue
Acquisitions
• Growth from future acquisitions
• Brokerage market is highly fragmented with hundreds of smaller players
• Echo has completed 21 acquisitions in 14 years
Placeholder for EPS 2
2
Months
Sales Force MaturityDriving Productivity Gains
Sales Tenure (Months) (1)Months
• Tenure is lengthening
• Increasing share of wallet
• Expanding truckload national accounts
Client Rep Productivity by Months of
Tenure (2) (3)
Gross Profit (000s)
Highlights
Notes
1. Headcount includes both client and carrier-facing sales representatives. Tenure shown is trailing twelve month average
2. Chart compares total annualized gross profit generated per average inside sales client representative by months of tenure
3. Includes all existing and ex-employees11
0
250
500
750
1,000
1,250
Apr17-Mar18 Apr18-Mar19 Apr19-Mar20
15.3 17.7
21.0 20.2
27.5
31.4 32.9
35.7 38.4
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Freight Cycle Dynamics
Illustrative Freight CycleIndex of Supply and Demand
Supply Demand
Strong Macro
Environment
Weak Macro
Environment
Demand Exceeds
Supply
• Good margins
• Significant
volumes of spot
at high margins
Expanding
margins as
demand falls
faster than supply
Soft Market
• Reduced prices
• Plenty of
capacity
Contracting
margins as
demand rises
faster than supply
Demand Exceeds
Supply
• Good margins
• Significant
volumes of spot
at high margins
A B C D A
12
Leading Organizations Endorse Echo
with Industry Awards and Recognition
#1 – Inbound Logistics’ Readers’ Choice Top 10 3PL Excellence Awards (2017, 2018, 2019)
Built In Chicago’s Top 100 Digital Companies
Inbound Logistics’ Top 10 3PLs
EPA SmartWay Transport Partner
Transport Topics’ Top 50 Logistics Companies
Target Corp. Outstanding Partnership Award
Food Logistics’ Top 3PL & Cold Storage Providers
Chicago’s 101 Best & Brightest Places to
Work For
#47 – Crain’s Chicago Business’ 50 Fastest-Growing Companies
Quaker Oats: Regional Broker of the Year
#4 – Transport Topics’ Top Freight Brokerage
Firms
Food Logistics’ Top Green Providers
Global Trade’s America’s Leading 3PLs
13
True Value Customer First Award
Financial Performance
Gross Revenue Net Revenue
Adjusted EBITDA(1)
$ MM $ MM
$ MM
603758
884
1,173
1,5121,716
1,943
2,440
2,185
0
750
1,500
2,250
3,000
2011 2012 2013 2014 2015 2016 2017 2018 2019
117143 156
208
290319
339
420
386
0
100
200
300
400
2011 2012 2013 2014 2015 2016 2017 2018 2019
28 36
3750
70 7262
100
84
0
23
45
68
90
2011 2012 2013 2014 2015 2016 2017 2018 2019
19.4% 18.9% 17.6% 17.7% 19.2% 18.6% 17.4% 17.2% 17.7%
% of Gross Revenue
24% 25% 24% 24% 23% 23% 18% 24% 22%
% of Net Revenue
26% 17% 33% 29% 13% 13% 26% -10%
% Growth
Note
1. Adjusted EBITDA refers to EBITDA excluding the effects of changes in contingent consideration, acquisition related transaction costs, Term Loan B commitment fees, non-recurring settlement costs, loss related to Shipper Direct acquisition, stock compensation expense and other expense
14
Liquidity Considerations
Key Takeaways
• Liquidity Metrics at March 31, 2020
Cash Balance: $38.7M
Outstanding ABL Balance: $100M
Excess ABL Availability: $157.7M
Outstanding Convertible Notes: $69.2M
Total Available Liquidity: $127.2M
• Excess ABL availability will be used to finance maturity
of convertible notes on May 1, 2020.
• Summary of ABL Credit Facility (1)
◦ Maximum loan amount: $350 million
◦ Collateral: 85% advance rate on eligible AR
◦ AR availability at March 31, 2020: $257.7 million
◦ Interest Rate: LIBOR + 150 bps or LIBOR + 125bps
if borrowing less than 50% of availability
◦ Maturity date: October 23, 2023
◦ Fixed Charge Coverage Ratio of at least 1.0
Net balance of $157.7M represents
the total excess ABL availability.
(100.0)
(1) For a copy of the full credit agreement, please reference: https://echogloballogisticsinc.gcs-web.com/financial-information/sec-filings
257.7
(69.2)
2020 Guidance(1)
Note
1. 2020 Guidance reflects guidance given during the earnings call on April 22, 2020
2. April trends are representative of the first 13 business days of the month
Q2 2020
• Revenue: $450M - $500M• Commission: 29.75% - 30.25%• G&A Costs: $43.5M - $46.5M• Depreciation: $7.0M• Cash Interest: $1.4M• Share Count: 26.2M• Non-GAAP Tax Rate: 25.0%
Excluded for Non-GAAP:
• Amortization: $2.8M• Non-cash Interest: $0.3M• Stock Compensation: $2.3M
FY 2020
• Revenue: N/A• Commission: 29.75% - 30.25%• G&A Costs: N/A• Depreciation: $27.8M• Cash Interest: $6.0M• Share Count: 26.2M• Non-GAAP Tax Rate: 25.0%
Excluded for Non-GAAP:
• Amortization: $11.0M• Non-cash Interest: $1.8M• Stock Compensation: $11.5M
Second Quarter 2020 Trends(2)
• April per business day revenue down 12%• April per business day TL shipments down 4%• April per business day LTL shipments down 24%• April net revenue margin approximately 17.4%
Historical Financial Information
17
Reconciliation of Non- GAAP Financial Measures
dollars in millions, except per share data FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Net Income 12.0$ 12.3$ 14.2$ 16.8$ 7.8$ 1.6$ 12.6$ 28.7$ 14.8$
Depreciat ion 5.8 7.0 8.2 10.0 12.4 16.3 18.5 23.6 26.6
Amort izat ion 2.5 2.2 2.3 3.9 11.7 15.8 14.2 13.0 11.8
Non-cash interest expense - - - - 4.9 7.6 8.1 9.1 7.3
Cash interest expense - - - - 4.3 6.6 6.7 6.5 5.3
Income tax expense (benefit) 6.6 7.9 8.6 10.4 3.7 (0.2) (8.3) 9.3 7.0
EBITDA 26.9 29.4 33.3 41.1 44.8 47.7 51.8 90.2 72.9
Change in contingent considerat ion (0.2) (0.1) 0.1 2.2 0.2 (0.1) 1.0 0.4 1.1
Acquisit ion related transaction costs - - - 1.5 6.6 - - 0.3 -
Term Loan B commitment fees (non-recurring interest expense) - - - - 2.0 - - - -
Non-recurring sett lement costs - 0.7 - - - - - - -
Loss related to Shipper Direct acquisit ion - 2.5 - - - - - - -
Stock compensation expense 1.3 2.7 3.3 4.4 14.0 13.1 9.0 9.3 10.2
Other expense 0.3 0.4 0.4 0.3 0.2 - - - -
Adjusted EBITDA 28.3$ 35.6$ 37.1$ 49.5$ 67.8$ 60.8$ 61.8$ 100.2$ 84.1$
Fully diluted EPS 0.53$ 0.54$ 0.61$ 0.71$ 0.28$ 0.05$ 0.45$ 1.03$ 0.55$
Change in contingent considerat ion (0.01) - - 0.09 0.01 (0.00) 0.04 0.01 0.04
Amort izat ion 0.11 0.10 0.10 0.17 0.42 0.54 0.51 0.47 0.44
Acquisit ion-related transaction costs - - - 0.06 0.23 - - 0.01 -
Non-cash interest expense - - - - 0.17 0.26 0.29 0.33 0.27
Term Loan B commitment fees (non-recurring interest expense) - - - - 0.07 - - - -
Non-recurring sett lement costs - 0.11 - - - - - - -
Loss related to Shipper Direct acquisit ion - 0.03 - - - - - - -
Stock Compensation Expense 0.06 0.12 0.14 0.19 0.50 0.45 0.32 0.33 0.38
Tax effect of adjustments (0.06) (0.11) (0.09) (0.20) (0.52) (0.47) (0.75) (0.30) (0.23)
Non-GAAP fully diluted EPS 0.63$ 0.77$ 0.76$ 1.02$ 1.16$ 0.83$ 0.86$ 1.88$ 1.45$