Stonepath Group Reports Record Revenue and Profits For 2003; Stonepath Posts $8.6 Million in EBITDA for 2003 - up 87% from Prior Year
PHILADELPHIA, Feb 25, 2004 (BUSINESS WIRE) -- Stonepath Group (AMEX: STG), a global logistics services organization, today reported financial results for the three months and year ended December 31, 2003.

For the fourth quarter of 2003, Stonepath reported revenues of $69.9 million, up from $43.3 million for the same prior year period, an increase of $26.6 million or 61.3%. Net income attributable to common stockholders was $4.9 million, or $0.14 per basic share and $0.11 per diluted share, and included a non-cash tax benefit of $1.7 million. This compares to net income attributable to common stockholders of $1.3 million, or $0.06 per basic share and $0.04 per diluted share, for the same prior year period.

For the year ended December 31, 2003, Stonepath reported revenues of $220.3 million, up from $122.8 million for the same prior year period, an increase of $97.5 million or 79.4%. Net income attributable to common stockholders was $7.1 million, or $0.24 per basic share and $0.18 per diluted share, and was negatively impacted by $1.4 million of costs related to discontinued operations, a litigation settlement and the delayed effectiveness of a registration statement during the third quarter of 2003, and positively impacted by $1.7 million in non-cash tax benefits. This compares to net income attributable to common stockholders of $17.4 million, or $0.79 per basic share and $0.08 per diluted share, for the same prior year period, which included a net non-cash benefit of $15.0 million associated with the restructuring of the Company's Series C preferred stock after giving effect to $1.95 million in preferred stock dividends.

According to the Company's Chief Financial Officer, Bohn Crain, "Our 2003 results included amortization of customer intangibles arising from the Company's past acquisitions and other non-cash charges totaling $780,000 for the fourth quarter and $2.7 million for the year ended December 31, 2003. While we believe we are actually growing the value of our acquired customer relationships through our acquisition strategy, our GAAP based financial reporting will continue to include these types of non-cash charges which are likely to increase as we continue our acquisition strategy. As a result, we believe that earnings before interest, taxes, depreciation and amortization, or EBITDA, is a useful financial measure for investors because it eliminates the effect of these non-cash costs and provides an important metric of the economic reality of our business."

For the fourth quarter of 2003, EBITDA was $4.2 million, or $0.09 per diluted share, as compared to $1.8 million, or $0.06 per diluted share for the same prior year period, an improvement of $2.4 million or 136.8%, and $0.03 per diluted share.

For the year ended December 31, 2003, EBITDA was $8.6 million, or $0.22 per diluted share, as compared to $4.6 million, or $0.16 per diluted share for the same prior year period, an improvement of $4.0 million or 87.0%. Excluding the impact of the nonrecurring costs of $1.4 million, EBITDA was $10.0 million, or $0.26 per diluted share, an improvement of $5.4 million, or 118.7% and $0.10 per diluted share over the same prior year period.

Reconciliations of EBITDA amounts to the most directly comparable GAAP measures for the three and twelve months ended December 31, 2003 are included in the financial information provided as part of this release.

"Our fourth quarter and full year results continued the trend of revenue and earnings expansion for Stonepath," said Dennis Pelino, the Company's Chief Executive Officer. "We plan to build on this success in 2004 with a continuing focus on profitable growth, integration and productivity improvement. With the recently completed acquisition of a controlling interest in Shaanxi Sunshine Express Cargo Services Int'l Co., Ltd and before the benefit of any further acquisitions, our base 2004 plan calls for $14.0 million of EBITDA, or $0.28 per diluted share, on $300.0 million in revenues. This represents year-on-year revenue growth of 36%, EBITDA growth of 63% and growth in EBITDA per diluted share of 27%."

Pelino continued: "In addition, we also expect to keep up our momentum on the acquisition front in 2004. With the benefit of our $20.0 million bank facility and recently effective $50.0 million equity shelf registration, we should have access to the capital necessary to meet our goal of scaling our business to revenues in the range of $500.0 million in run rate revenues by the end of 2006. We will continue our expansion in our existing North American and Asian markets and also look to establish a footprint in Europe and South America and expect to deploy $10.0 to $20.0 million in acquisition capital over the course of 2004."

Pelino closed, "We will continue to execute our business plan, deploying our capital in support of profitable, best of breed companies and management teams that are complementary to our global network. Through this disciplined approach we believe we can continue to build a world class supply-chain execution platform and create significant value for our shareholders and customers along the way."

A reconciliation of EBITDA to the most directly comparable GAAP measure in accordance with SEC Regulation S-K follows: