Echo Global Logistics

Transcription

1 Echo Global Logistics Command Acquisition: Delivering on Our Strategic Roadmap April 21, 2015 P E O P L E T E C H N O L O G Y R E S U L T S

2 Forward Looking Statements and Non- GAAP Financial Measures This presentation 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. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of terms such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target" or the negative of these terms or other comparable terms. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause Echo s actual results, performance or achievements to differ materially from the statements contained in this release. For a discussion of important factors that could affect Echo s actual results, please refer to Echo s SEC filings, including the "Risk Factors" section of Echo s Form 10-K for the year ended December 31, 2014 filed with the SEC. This presentation refers to Adjusted Earnings Before Interest, Depreciation and Amortization ( Adjusted EBITDA ), defined as a "non-gaap financial measure" by the Securities and Exchange Commission. We refer to Adjusted EBITDA to describe earnings excluding the changes in contingent consideration payable, acquisition-related transaction costs, non-recurring compensation expenses and non-recurring operational expenses. We believe this measure provides useful information to investors about the financial performance of the Company's ongoing business. Adjusted EBITDA is used by management in its financial and operational decision-making and evaluation of overall operating performance. These measures may be different from similar measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. For a reconciliation of this non-gaap financial measure to the nearest comparable GAAP financial measure, see "Adjusted EBITDA Reconciliation" included in the Appendix of this presentation. 2

3 Compelling Transaction Rationale 1 Scale Enhances leading market position Increased TL network density Complementary TL network Multi-modal offering leverage across broader customer base Talent Experienced workforce and aligned management Technology Leadership Depth and breadth of leading solution Seamless Integration Culture and business model alignment Accretive to Earnings Significant synergy potential 3

4 Combining Two Leaders in Transportation Management Truckload freight brokerage leader North American coverage with primarily East Coast and Southeast density Spot market focus $102MM and $37MM in Net Revenue and Adjusted EBITDA (1) in 2014, respectively Paul Loeb founded and sold American Backhaulers to C.H. Robinson 572 employees (504 in sales) Headquartered in Skokie, IL (12 miles from Echo HQ) Multi-modal leader Managed Transportation and brokerage North American coverage with density on West Coast and Midwest $208MM and $45MM in Net Revenue and Adjusted EBITDA (1) in 2014, respectively 1,800 employees (1,177 sales) Headquartered in Chicago, IL Note: (1) Please see reconciliation on slide 15 4

5 1 Critical Scale Enhances Leading Market Position Strong leadership position in large market Leading domestic multimodal offering Dominant sales organization LTL revenue Truckload revenue Gross revenue Net revenue Combined 2014 $0 $500 $1,000 $1,500 $2,000 Large freight network reaches tipping point for shippers and carriers Diversified customers and carriers $149 8% $0 $100 $200 $300 $400 Echo Command Back office operating leverage $445 26% $1,140 66% TL LTL Other 5

6 Command Echo 1 Complementary Networks with Limited Customer Overlap Highly complementary networks Command: strong East Coast and Southeast Echo: strong upper Midwest and West Coast Overlapping lanes include complementary inbound/outbound combinations Minimal customer overlap Note: Comparison of 2014 lanes with minimum 100 annual shipments 6

7 2 Experienced Management Team Aligned with Shareholders TBU Douglas R. Waggoner Chief Executive Officer Years Experience: 30+ David Menzel President and COO Years Experience: 30+ TBU Paul Loeb Founder and Chief Executive Officer Years Experience: 30+ Danny Zamost President Years Experience: 23 World-class management team with strong entrepreneurial mindset Command management believes in Echo Command management receiving $25MM in common and restricted stock Command leadership team is expected to retain current roles TBU Kyle Sauers Chief Financial Officer Years Experience: 22+ TBU John Cameli Chief Operating Officer Years Experience: 19 Paul Loeb joining Echo Board Board to expand from 6 to 7 Significant management experience, with more than 150 years of experience 7

8 Command Echo 2 Strong Cultural Fit Echo and Command both share: Young, energetic and collegial atmospheres Strong customer-centric cultures built by experienced leaders Best-in-class sales forces Shared common goals High standards Feedback-rich environments Data-driven recruiting and training methodologies 8

9 3 Combines Industry-Leading Proprietary Technology Platforms Echo Technology Flexible and highly-scalable, allowing Echo to adapt to customer needs Highly integrated Seamless communication and back-end reporting Combined Technology Command to operate autonomously for near-term Will migrate to Echo platform over time Integrate some of Command s technology into Echo s platform Command Technology TMW-based platform Promising new technology in development 9

10 4 Seamless Integration COMMON CULTURE SIMILAR PROCESS / BUSINESS MODEL History of Successful M&A Integration 19% CAGR / 34% IRR (1) Acquired Revenue (2) $352MM Organic Growth (3) $317MM COMPLEMENTARY TECHNOLOGY CHICAGO LOCATION SUCCESSFUL TRACK RECORD Note: (1) CAGR and IRR calculations as of December 31, 2014 (2) Acquired revenue represents the trailing 12 months of revenue of each acquisition as of the date of purchase (3) Organic Growth represents the annualized 2H-2014 revenue of all acquisitions less acquired revenue 10

11 5 Strengthens Financial Profile and Drives Growth Opportunities Echo Gross Revenue ($MM) Command Gross Revenue ($MM) 1,500 1, , Metrics Echo Command Gross Revenue $1,173.4MM $561.1MM Net Revenue $208.2MM $101.8MM Adjusted EBITDA (1) $45.1MM $37.0MM Capex $15.2MM $1.2MM Sales Employees (2) 1, Total Employees (2) 1, Note: (1) Please see reconciliation on slide 15 (2) Sales and Total Employees is as of 3/31/

12 Transaction Summary Approximately $395MM in cash and $25MM in newly issued stock Purchase Price and Consideration $25MM in common and restricted stock to key Command personnel Command founder Paul Loeb to join Echo Board of Directors Command management team to remain in place Asset purchase for tax purposes will provide tax benefits due to step-up Ability to realize revenue, cost, operational and purchasing power synergies Significant Synergies Expanded customer base to provide significant cross selling opportunities Talent acquisition and long-tenured sales force driving higher revenue Attractive Financial Profile Combined 2014 Revenue and Net Revenue of $1.73B and $310MM, respectively Meaningfully narrows the gap to 2017 financial targets, two years ahead of schedule Transaction is expected to be accretive to earnings Fully committed financing Financing Subject to market conditions, Echo will evaluate possible equity and convertible offerings Significant liquidity through a new $200MM ABL revolver Timing and Closing Conditions Regulatory clearances and customary closing conditions Expected Closing: 2Q

13 Delivering on Our Strategic Plan Transaction Benefits for Our Shareholders Strategic Objectives 1 Scale Enhances leading market position Increases TL network density Complementary TL network Multi-modal offering leverage across broader customer base 2 Talent Experienced workforce and aligned management 3 Technology Leadership Depth and breadth of leading solution 4 Seamless Integration Culture and business model alignment 5 Accretive to Earnings Approaching 2017 financial targets meaningfully ahead of schedule Transaction is expected to be accretive to earnings 6 Attractive Market Opportunity Well positioned to thrive in a high growth industry 13

14 14 Appendix

15 Adjusted EBITDA Reconciliation 2014 Metrics ($MM) Echo Command Net Income $16.8MM $21.6MM Change in Contingent Consideration Income Taxes Acquisition-Related Deal Costs Non-Recurring Compensation Expense Non-Recurring Operational Expenses Depreciation and Amortization Other Adjustments Adjusted EBITDA $45.1MM $37.0 MM 15