Document_and_Entity_Informatio
Document and Entity Information Document | 3 Months Ended | |
Mar. 31, 2014 | Apr. 30, 2014 | |
Entity Information [Line Items] | ' | ' |
Entity Registrant Name | 'Echo Global Logistics, Inc. | ' |
Entity Central Index Key | '0001426945 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 23,487,379 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
REVENUE | $247,670,217 | $203,977,378 |
COSTS AND EXPENSES: | ' | ' |
Transportation costs | 205,460,091 | 165,526,099 |
Selling, general, and administrative expenses | 35,272,320 | 31,007,144 |
Depreciation and amortization | 2,956,104 | 2,595,311 |
INCOME FROM OPERATIONS | 3,981,702 | 4,848,824 |
Interest expense | 0 | -717 |
Other expense | -54,927 | -93,499 |
OTHER EXPENSE, NET | -54,927 | -94,216 |
INCOME BEFORE PROVISION FOR INCOME TAXES | 3,926,775 | 4,754,608 |
INCOME TAX EXPENSE | -1,496,816 | -1,777,976 |
NET INCOME | $2,429,959 | $2,976,632 |
Basic net income per share (USD per share) | $0.11 | $0.13 |
Diluted net income per share (USD per share) | $0.10 | $0.13 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $42,642,907 | $52,506,560 |
Accounts receivable, net of allowance for doubtful accounts of $1,873,798 and $1,792,012 at March 31, 2014 and December 31, 2013, respectively | 135,286,860 | 109,662,529 |
Income taxes receivable | 519,579 | 1,337,180 |
Prepaid expenses | 2,117,596 | 2,510,791 |
Deferred income taxes | 946,480 | 943,740 |
Other current assets | 98,403 | 121,403 |
Total current assets | 181,611,825 | 167,082,203 |
Property and equipment, net | 18,115,946 | 15,536,831 |
Intangible assets: | ' | ' |
Goodwill | 58,116,653 | 51,650,060 |
Intangible assets, net of accumulated amortization of $11,821,383 and $11,120,733 at March 31, 2014 and December 31, 2013, respectively | 17,096,596 | 10,647,246 |
Other assets | 235,253 | 230,253 |
Total assets | 275,176,273 | 245,146,593 |
Current liabilities: | ' | ' |
Accounts payable | 90,822,015 | 65,322,807 |
Due to seller-short term | 5,176,201 | 5,763,779 |
Accrued expenses | 9,490,928 | 8,322,117 |
Total current liabilities | 105,489,144 | 79,408,703 |
Due to seller-long term | 1,833,723 | 1,386,653 |
Other noncurrent liabilities | 1,572,692 | 1,573,780 |
Deferred income taxes | 4,021,475 | 3,547,426 |
Total liabilities | 112,917,034 | 85,916,562 |
Stockholders' equity: | ' | ' |
Common stock, par value $0.0001 per share, 100,000,000 shares authorized, 23,005,318 and 22,900,471 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 2,302 | 2,291 |
Additional paid-in capital | 107,431,040 | 106,831,802 |
Retained earnings | 54,825,897 | 52,395,938 |
Total stockholders' equity | 162,259,239 | 159,230,031 |
Total liabilities and stockholders' equity | $275,176,273 | $245,146,593 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets Parentheticals (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Allowance for doubtful accounts | $1,873,798 | $1,792,012 |
Customer relationships and other intangible assets, accumulated amortization | $11,821,383 | $11,120,733 |
Stockholders' equity: | ' | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 23,005,318 | 22,900,471 |
Common stock, shares oustanding | 23,005,318 | 22,900,471 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Operating activities | ' | ' |
Net income | $2,429,959 | $2,976,632 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Deferred income taxes | 471,309 | 374,700 |
Noncash stock compensation expense | 1,308,313 | 1,071,938 |
Increase in contingent consideration due to seller | 224,162 | 758,695 |
Depreciation and amortization | 2,956,104 | 2,595,311 |
Change in assets, net of acquisitions: | ' | ' |
Accounts receivable | -19,192,003 | -7,280,834 |
Taxes receivable (payable) | 817,601 | -589,784 |
Prepaid expenses and other assets | 417,142 | 648,288 |
Change in liabilities, net of acquisitions: | ' | ' |
Accounts payable | 20,505,739 | 6,841,258 |
Accrued expenses and other | 253,591 | -1,152,824 |
Net cash provided by operating activities | 10,191,917 | 6,243,380 |
Investing activities | ' | ' |
Purchases of property and equipment | -4,316,741 | -2,205,498 |
Payments for acquisitions, net of cash acquired | -13,785,095 | -1,958,236 |
Net cash used in investing activities | -18,101,836 | -4,163,734 |
Financing activities | ' | ' |
Principal payments on capital lease obligations | 0 | -7,764 |
Tax benefit of stock options exercised | 126,222 | 315,657 |
Payment of contingent consideration | -1,244,670 | 0 |
Issuance of shares, net of issuance costs | 17,428 | 648,140 |
Employee tax withholdings related to net share settlements of equity-based awards | -852,714 | -734,535 |
Net cash (used in) provided by financing activities | -1,953,734 | 221,498 |
(Decrease) increase in cash and cash equivalents | -9,863,653 | 2,301,144 |
Cash and cash equivalents, beginning of period | 52,506,560 | 41,780,984 |
Cash and cash equivalents, end of period | 42,642,907 | 44,082,128 |
Supplemental disclosure of cash flow information | ' | ' |
Cash paid during the period for interest | 0 | 720 |
Cash paid during the period for income taxes | 81,684 | 1,662,444 |
Contingent Earnout Payments Increase Due to New Acquisitions | $880,000 | $0 |
Consolidated_Statement_of_Stoc
Consolidated Statement of Stockholders' Equity (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] |
Stockholders' equity at beginning of period at Dec. 31, 2013 | $159,230,031 | $2,291 | $106,831,802 | $52,395,938 |
Common stock, shares at beginning of period at Dec. 31, 2013 | 22,900,471 | 22,900,471 | ' | ' |
Increase (decrease) in stockholders' equity: | ' | ' | ' | ' |
Share compensation expense | 1,308,313 | ' | 1,308,313 | ' |
Exercise of stock options (in shares) | ' | 1,600 | ' | ' |
Exercise of stock options | 17,428 | 0 | 17,428 | ' |
Common stock issued for vested restricted stock (in shares) | ' | 146,964 | ' | ' |
Common stock issued for vested restricted stock | 0 | 15 | -15 | ' |
Common shares withheld and retired to satisfy employee tax witholding obligations upon vesting of restricted stock (in shares) | ' | -43,717 | ' | ' |
Common shares withheld and retired to satisfy employee tax withholding obligations upon vesting of restricted stock | -852,714 | -4 | -852,710 | ' |
Tax benefit from exercise of stock options | 126,222 | ' | 126,222 | ' |
Net income | 2,429,959 | ' | ' | 2,429,959 |
Stockholders' equity at end of period at Mar. 31, 2014 | $162,259,239 | $2,302 | $107,431,040 | $54,825,897 |
Common stock, shares at end of period at Mar. 31, 2014 | 23,005,318 | 23,005,318 | ' | ' |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | |
Basis of Presentation | |
The condensed consolidated financial statements include the accounts of Echo Global Logistics, Inc. and its subsidiaries (the "Company"). All significant intercompany accounts and transactions have been eliminated in the consolidation. The consolidated statements of income include the results of entities or assets acquired from the effective date of the acquisition for accounting purposes. | |
The preparation of the consolidated financial statements is in conformity with the rules and regulations of the Securities and Exchange Commission ("SEC") and accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules or regulations. In the opinion of management, the accompanying unaudited financial statements reflect all adjustments considered necessary for a fair presentation of the results for the period and those adjustments are of a normal recurring nature. The operating results for the three month period ended March 31, 2014 are not necessarily indicative of the results expected for the full year of 2014. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's most recent audited financial statements. | |
Preparation of Financial Statements and Use of Estimates | |
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results can differ from those estimates. | |
Fair Value of Financial Instruments | |
The carrying values of the Company's financial investments, which consist of cash and cash equivalents, accounts receivable and accounts payable, approximate their fair values due to their short term nature. The fair value of due to seller is determined based on the likelihood of contingent earn-out payments. |
New_Accounting_Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
New Accounting Pronouncements | ' |
New Accounting Pronouncements | |
In July 2013, the FASB issued authoritative guidance under Accounting Standard Update ("ASU") 2013-11, which provides guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss (“NOL”) carryforward, a similar tax loss, or a tax credit carryforward exists. ASU 2013-11 requires entities to present an unrecognized tax benefit as a reduction of a deferred tax asset for a NOL or tax credit carryforward whenever the NOL or tax credit carryforward would be available to reduce the additional taxable income or tax due if the tax position is disallowed. This accounting standard update requires entities to assess whether to net the unrecognized tax benefit with a deferred tax asset as of the reporting date. The provisions of this new guidance were effective as of the beginning of the Company's 2014 fiscal year and did not have a material impact on its financial statements. |
Acquisitions_Notes
Acquisitions (Notes) | 3 Months Ended |
Mar. 31, 2014 | |
Business Combinations [Abstract] | ' |
Acquisitions | ' |
Acquisitions | |
2014 Acquisitions | |
Online Freight Services, Inc. | |
Effective January 1, 2014, the Company acquired Online Freight Services, Inc. ("OFS"), a non-asset-based truckload transportation brokerage based in Mendota Heights, Minnesota, and the results of OFS have been included in the unaudited consolidated financial statements since that date. The Company agreed to purchase the assets and assume certain liabilities of OFS for $9,460,742 in cash payable at closing and an additional $1,500,000 in cash consideration that may become payable upon achievement of certain performance measures on or prior to December 31, 2017. As a result of the preliminary purchase accounting for the acquisition, the Company recorded $4,286,440 of goodwill, of which $880,000 is related to contingent consideration, and $4,850,000 of intangible assets, primarily customer relationships and trade names. This allocation is subject to change as the Company finalizes purchase accounting. The amount of goodwill deductible for U.S. income tax purposes is approximately $3,406,440, excluding future contingent consideration payments. For the three month period ended March 31, 2014, the Company recorded an increase of $60,000 to the contingent consideration obligation to reflect the change in fair value, which was primarily the result of adjustments to the forecasted financial performance of OFS resulting in a liability due to seller of $940,000 at March 31, 2014. Pro forma results of the acquisition were not presented as they are not material to the financial statements. | |
Comcar Logistics, LLC | |
Effective February 1, 2014, the Company acquired Comcar Logistics, LLC ("Comcar"), a non-asset-based truckload brokerage with offices in Jacksonville, Florida and Denver, Colorado, and the results of Comcar have been included in the unaudited consolidated financial statements since that date. The Company agreed to purchase the assets and assume certain liabilities of Comcar for $4,900,930 in cash. There is no contingent consideration associated with the purchase of Comcar. As a result of the preliminary purchase accounting for the acquisition, the Company recorded $2,180,153 of goodwill, which is approximately the amount of goodwill deductible for U.S. income tax purposes, and $2,300,000 of intangible assets, primarily customer relationships. This allocation is subject to change as the Company finalizes purchase accounting. Pro forma results of the acquisition were not presented as they are not material to the financial statements. |
Fair_Value_Measurement
Fair Value Measurement | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value Measurement | ' | |||||||||||||||
Fair Value Measurement | ||||||||||||||||
The Company applies ASC Topic 820 Fair Value Measurements and Disclosures for its financial assets and financial liabilities. The guidance requires disclosures about assets and liabilities measured at fair value. The Company's financial liabilities primarily relate to contingent earn-out payments of $7,009,924. The potential earnout payments and performance are defined in the individual purchase agreement for each acquisition. Earnings before interest, taxes, depreciation and amortization ("EBITDA") is the performance target defined and measured to determine the earnout payment due, if any, after each defined measurement period. | ||||||||||||||||
ASC Topic 820 includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on observable or unobservable inputs to valuation techniques that are used to measure fair value. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels: | ||||||||||||||||
• | Level 1: Inputs are quoted prices in active markets for identical assets or liabilities. | |||||||||||||||
• | Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable and market-corroborated inputs, which are derived principally from or corroborated by observable market data. | |||||||||||||||
• | Level 3: Inputs that are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. | |||||||||||||||
The significant inputs used to derive the fair value of the amounts due to seller include financial forecasts of future operating results, the probability of reaching the forecast and an appropriate discount rate for each contingent liability. The probability of paying the contingent consideration ranges from 15% to 60%, with discount rates used in determining the fair value of the contingent consideration ranging between 3% and 12%. Historical results of the respective acquisitions serve as the basis for the financial forecasts used in the valuation. Quantitative factors are also considered in these forecasts, including acquisition synergies, growth and sales potential and potential operational efficiencies gained. Changes to the significant inputs used in determining the fair value of the contingent consideration could result in a change in the fair value of the contingent consideration. However, the correlation and inverse relationship between higher projected financial results to the discount rate applied and probability of meeting the financial targets mitigates the effect of any changes to the unobservable inputs. | ||||||||||||||||
The following table sets forth the Company's financial liabilities measured at fair value on a recurring basis and the basis of measurement at March 31, 2014 and December 31, 2013: | ||||||||||||||||
Fair Value Measurements as of March 31, 2014 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Liabilities: | ||||||||||||||||
Contingent consideration obligation | $ | (7,009,924 | ) | $ | — | $ | — | $ | (7,009,924 | ) | ||||||
Fair Value Measurements as of December 31, 2013 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Liabilities: | ||||||||||||||||
Contingent consideration obligation | $ | (7,150,432 | ) | $ | — | $ | — | $ | (7,150,432 | ) | ||||||
The following table provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3): | ||||||||||||||||
Due to Seller | ||||||||||||||||
Balance at December 31, 2013 | $ | (7,150,432 | ) | |||||||||||||
Increase related to acquisition of OFS | (880,000 | ) | ||||||||||||||
Change in fair value | (224,162 | ) | ||||||||||||||
Payment of contingent consideration | 1,244,670 | |||||||||||||||
Balance at March 31, 2014 | $ | (7,009,924 | ) | |||||||||||||
For the three month period ended March 31, 2014, the Company recorded an adjustment to each of the ten remaining contingent consideration obligations related to its acquisitions. The adjustments were the result of the time value of money and using revised forecasts and updated fair value measurements that adjusted the Company's estimated earn-out payments related to the purchases of these businesses. | ||||||||||||||||
For the three month periods ended March 31, 2014 and 2013, the Company recognized charges of $224,162 and $758,695, respectively, in selling, general, and administrative expenses in the consolidated statement of income due to the change in fair value measurements using a level three valuation technique. | ||||||||||||||||
For the three month period ended March 31, 2014, the Company paid $1,244,670 in contingent earn-out payments. The Company paid the former owners of Nationwide Traffic Services LLC, Distribution Services Inc, and Sharp Freight Systems, $437,500, $520,000, and $287,170, respectively, as the EBITDA targets set forth in the purchase agreements were met. For the three month period ended March 31, 2013, the Company did not make any contingent earn-out payments. |
Intangibles_and_Other_Assets_N
Intangibles and Other Assets (Notes) | 3 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||
Intangibles and Other Assets | ' | |||||||||
Intangibles and Other Assets | ||||||||||
The following is a roll-forward of goodwill from December 31, 2013 to March 31, 2014: | ||||||||||
Balance as of December 31, 2013 | $ | 51,650,060 | ||||||||
Goodwill acquired related to the purchase of OFS | 4,286,440 | |||||||||
Goodwill acquired related to the purchase of Comcar | 2,180,153 | |||||||||
Balance as of March 31, 2014 | $ | 58,116,653 | ||||||||
The following is a summary of amortizable intangible assets as of March 31, 2014 and December 31, 2013: | ||||||||||
March 31, 2014 | December 31, 2013 | Weighted- | ||||||||
Average Life | ||||||||||
Customer relationships | $ | 28,138,979 | $ | 21,438,979 | 9.0 years | |||||
Noncompete agreements | 139,000 | 139,000 | 2.9 years | |||||||
Trade names | 640,000 | 190,000 | 4.4 years | |||||||
28,917,979 | 21,767,979 | 8.9 years | ||||||||
Less accumulated amortization | (11,821,383 | ) | (11,120,733 | ) | ||||||
Intangible assets, net | $ | 17,096,596 | $ | 10,647,246 | ||||||
Amortization expense related to intangible assets was $700,650 and $598,437 for the three months ended March 31, 2014 and 2013, respectively. | ||||||||||
The estimated amortization expense for the next five years and thereafter is as follows: | ||||||||||
Remainder of 2014 | $2,151,143 | |||||||||
2015 | 2,623,685 | |||||||||
2016 | 2,266,329 | |||||||||
2017 | 1,987,904 | |||||||||
2018 | 1,656,647 | |||||||||
Thereafter | 6,410,888 | |||||||||
$ | 17,096,596 | |||||||||
Accrued_Expenses_and_Other_Non
Accrued Expenses and Other Noncurrent Liabilities | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accrued Expenses and Other Noncurrent Liabilities | ' | |||||||
Accrued Expenses and Other Noncurrent Liabilities | ||||||||
The components of accrued expenses at March 31, 2014 and December 31, 2013 are as follows: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Accrued compensation | $ | 4,067,430 | $ | 4,147,590 | ||||
Accrued rebates | 2,371,749 | 2,298,476 | ||||||
Deferred rent | 276,515 | 263,893 | ||||||
Other | 2,775,234 | 1,612,158 | ||||||
Total accrued expenses | $ | 9,490,928 | $ | 8,322,117 | ||||
The other noncurrent liability as of March 31, 2014 and December 31, 2013 is the portion of deferred rent in excess of twelve months. |
Income_Taxes
Income Taxes | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Income Taxes | ' | |||||||
Income Taxes | ||||||||
The following table shows the Company's effective income tax rate for the three months ended March 31, 2014 and 2013: | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Income before provision for income taxes | $ | 3,926,775 | $ | 4,754,608 | ||||
Income tax expense | (1,496,816 | ) | (1,777,976 | ) | ||||
Effective tax rate | 38.1 | % | 37.4 | % | ||||
The increase in the Company's effective tax rate was primarily due to the timing and reenactment of the research and development tax credit which occurred in early 2013 for both the 2012 and 2013 tax years. |
Earnings_Per_Share_Notes
Earnings Per Share (Notes) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Earnings Per Share | ' | |||||||
Earnings Per Share | ||||||||
Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by dividing net income by the number of weighted average common share equivalents outstanding. There were no employee stock options excluded from the calculation of diluted earnings per share for the three month periods ended March 31, 2014 and 2013. The computation of basic and diluted earnings per common share for the three month periods ended March 31, 2014 and 2013 are as follows: | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Numerator: | ||||||||
Net income | $ | 2,429,959 | $ | 2,976,632 | ||||
Denominator: | ||||||||
Denominator for basic earnings per share-weighted-average shares | 22,967,118 | 22,796,476 | ||||||
Effect of dilutive securities: | ||||||||
Employee stock awards | 482,459 | 443,696 | ||||||
Denominator for dilutive earnings per share | 23,449,577 | 23,240,172 | ||||||
Basic net income per common share | $ | 0.11 | $ | 0.13 | ||||
Diluted net income per common share | $ | 0.1 | $ | 0.13 | ||||
Stock_Based_Compensation_Plans
Stock Based Compensation Plans | 3 Months Ended |
Mar. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Stock Based Compensation Plans | ' |
Stock-Based Compensation Plans | |
The Company recorded $1,308,313 and $1,071,938 in total stock-based compensation expense with corresponding tax benefits of $510,242 and $418,056 for the three month periods ended March 31, 2014 and 2013, respectively. During the three month periods ended March 31, 2014 and March 31, 2013, the Company did not grant any stock options. The Company granted 163,257 and 101,457 shares of restricted stock to various employees during the three month periods ended March 31, 2014 and 2013, respectively. In 2014, the Company initiated a performance and market-based stock incentive plan for certain executives that provides vesting based on specific financial and market-based performance measurements. The Company granted 43,437 shares of performance and market-based stock during the three month period ended March 31, 2014. In 2013, the Company initiated a performance stock incentive plan for certain executives that provides vesting based on specific financial performance measurements. The Company granted 38,701 shares of performance stock during the three month period ended March 31, 2013. | |
Legal_Matters
Legal Matters | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Legal Matters | ' |
Legal Matters | |
In the normal course of business, the Company is subject to potential claims and disputes related to its business, including claims for freight lost or damaged in transit. Some of these matters may be covered by the Company's insurance and risk management programs or may result in claims or adjustments with the Company's carriers. | |
Effective July 1, 2012, the Company acquired the assets of Shipper Direct, a truckload transportation brokerage located near Nashville, Tennessee. In August 2012, the Company discovered that the revenue and profitability of the acquired business, both prior and subsequent to the acquisition, were not as expected based on representations contained in the Asset Purchase Agreement. The Company believes the representations made in the Asset Purchase Agreement were fraudulent. The founders of Shipper Direct, who had become employees of the Company, were terminated as a result, and the Company requested that the sellers return the entire purchase price and that the contingent consideration provision of the Asset Purchase Agreement be voided. However, the Company received only $1,779,554. On September 25, 2012, the sellers asserted indemnification claims against the Company under the indemnification provisions of the Asset Purchase Agreement for $2,400,000, including a claim for the repayment of the $1,779,554 return of purchase price. The Company believes the sellers' indemnification claims are without merit and intends to vigorously defend against any legal action taken by the sellers with respect to their indemnification claims. | |
In November 2012, the founders filed a complaint with the U.S. Department of Labor alleging that their employment was wrongfully terminated in violation of the whistleblower provisions of Sarbanes-Oxley. On August 27, 2013, this action was terminated in the Company's favor when the founders voluntarily withdrew their complaint. | |
In January 2013, the Company filed a lawsuit in the U.S. District Court for the Northern District of Illinois against Shipper Direct, the founders and others alleging, among other things, breach of contract and fraud. The lawsuit is seeking monetary damages of $2,500,000. On May 28, 2013, the Company obtained a default judgment against the founders, which the founders subsequently attempted to vacate. On April 28, 2014, the Company learned that the default judgment will stand. The monetary amount of the judgment will be determined after a hearing on May 14, 2014. | |
Management does not believe that the outcome of any of the legal proceedings to which the Company is a party will have a material adverse effect on its financial position or results of operations. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Preparation of Financial Statements and Use of Estimates | ' |
Preparation of Financial Statements and Use of Estimates | |
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results can differ from those estimates. | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
The carrying values of the Company's financial investments, which consist of cash and cash equivalents, accounts receivable and accounts payable, approximate their fair values due to their short term nature. The fair value of due to seller is determined based on the likelihood of contingent earn-out payments. |
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Financial liabilities measured at fair value on a recurring basis | ' | |||||||||||||||
The following table sets forth the Company's financial liabilities measured at fair value on a recurring basis and the basis of measurement at March 31, 2014 and December 31, 2013: | ||||||||||||||||
Fair Value Measurements as of March 31, 2014 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Liabilities: | ||||||||||||||||
Contingent consideration obligation | $ | (7,009,924 | ) | $ | — | $ | — | $ | (7,009,924 | ) | ||||||
Fair Value Measurements as of December 31, 2013 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Liabilities: | ||||||||||||||||
Contingent consideration obligation | $ | (7,150,432 | ) | $ | — | $ | — | $ | (7,150,432 | ) | ||||||
Reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs | ' | |||||||||||||||
The following table provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3): | ||||||||||||||||
Due to Seller | ||||||||||||||||
Balance at December 31, 2013 | $ | (7,150,432 | ) | |||||||||||||
Increase related to acquisition of OFS | (880,000 | ) | ||||||||||||||
Change in fair value | (224,162 | ) | ||||||||||||||
Payment of contingent consideration | 1,244,670 | |||||||||||||||
Balance at March 31, 2014 | $ | (7,009,924 | ) |
Intangibles_and_Other_Assets_T
Intangibles and Other Assets (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||
Roll-forward of goodwill | ' | |||||||||
The following is a roll-forward of goodwill from December 31, 2013 to March 31, 2014: | ||||||||||
Balance as of December 31, 2013 | $ | 51,650,060 | ||||||||
Goodwill acquired related to the purchase of OFS | 4,286,440 | |||||||||
Goodwill acquired related to the purchase of Comcar | 2,180,153 | |||||||||
Balance as of March 31, 2014 | $ | 58,116,653 | ||||||||
Summary of amortizable intangible assets | ' | |||||||||
The following is a summary of amortizable intangible assets as of March 31, 2014 and December 31, 2013: | ||||||||||
March 31, 2014 | December 31, 2013 | Weighted- | ||||||||
Average Life | ||||||||||
Customer relationships | $ | 28,138,979 | $ | 21,438,979 | 9.0 years | |||||
Noncompete agreements | 139,000 | 139,000 | 2.9 years | |||||||
Trade names | 640,000 | 190,000 | 4.4 years | |||||||
28,917,979 | 21,767,979 | 8.9 years | ||||||||
Less accumulated amortization | (11,821,383 | ) | (11,120,733 | ) | ||||||
Intangible assets, net | $ | 17,096,596 | $ | 10,647,246 | ||||||
Estimated amortization expense for the next five years and thereafter | ' | |||||||||
The estimated amortization expense for the next five years and thereafter is as follows: | ||||||||||
Remainder of 2014 | $2,151,143 | |||||||||
2015 | 2,623,685 | |||||||||
2016 | 2,266,329 | |||||||||
2017 | 1,987,904 | |||||||||
2018 | 1,656,647 | |||||||||
Thereafter | 6,410,888 | |||||||||
$ | 17,096,596 | |||||||||
Accrued_Expenses_and_Other_Non1
Accrued Expenses and Other Noncurrent Liabilities (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Components of accrued liabilities | ' | |||||||
The components of accrued expenses at March 31, 2014 and December 31, 2013 are as follows: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Accrued compensation | $ | 4,067,430 | $ | 4,147,590 | ||||
Accrued rebates | 2,371,749 | 2,298,476 | ||||||
Deferred rent | 276,515 | 263,893 | ||||||
Other | 2,775,234 | 1,612,158 | ||||||
Total accrued expenses | $ | 9,490,928 | $ | 8,322,117 | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Reconciliation of effective income tax rate | ' | |||||||
The following table shows the Company's effective income tax rate for the three months ended March 31, 2014 and 2013: | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Income before provision for income taxes | $ | 3,926,775 | $ | 4,754,608 | ||||
Income tax expense | (1,496,816 | ) | (1,777,976 | ) | ||||
Effective tax rate | 38.1 | % | 37.4 | % |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Computation of basic and diluted earnings per common share | ' | |||||||
The computation of basic and diluted earnings per common share for the three month periods ended March 31, 2014 and 2013 are as follows: | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Numerator: | ||||||||
Net income | $ | 2,429,959 | $ | 2,976,632 | ||||
Denominator: | ||||||||
Denominator for basic earnings per share-weighted-average shares | 22,967,118 | 22,796,476 | ||||||
Effect of dilutive securities: | ||||||||
Employee stock awards | 482,459 | 443,696 | ||||||
Denominator for dilutive earnings per share | 23,449,577 | 23,240,172 | ||||||
Basic net income per common share | $ | 0.11 | $ | 0.13 | ||||
Diluted net income per common share | $ | 0.1 | $ | 0.13 | ||||
Acquisitions_Details
Acquisitions (Details) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Jan. 02, 2014 | Mar. 31, 2014 | Feb. 01, 2014 | |
Online Freight Services, Inc. [Member] | Online Freight Services, Inc. [Member] | Comcar Logistics, LLC [Member] | Comcar Logistics, LLC [Member] | ||||
Acquisitions: | ' | ' | ' | ' | ' | ' | ' |
Acquisition purchase price | ' | ' | ' | ' | $9,460,742 | ' | $4,900,930 |
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | ' | ' | ' | ' | 1,500,000 | ' | ' |
Goodwill, Acquired During Period | ' | ' | ' | 4,286,440 | ' | 2,180,153 | ' |
Goodwill | 58,116,653 | ' | 51,650,060 | ' | ' | ' | ' |
Business Acquisition, Contingent Consideration, Goodwill Related to Contingent Consideration | ' | ' | ' | ' | 880,000 | ' | ' |
Business Acquisition, Goodwill, Expected Tax Deductible Amount | ' | ' | ' | ' | 3,406,440 | ' | ' |
Increase in contingent consideration due to seller | 224,162 | 758,695 | ' | 60,000 | ' | ' | ' |
Business Acquisition, Contingent Consideration, at Fair Value as of the Balance Sheet Date | ' | ' | ' | 940,000 | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | ' | ' | ' | ' | $4,850,000 | ' | $2,300,000 |
Fair_Value_Measurement_Details
Fair Value Measurement (Details) (USD $) | 3 Months Ended | 3 Months Ended | |||||||||||||||||
Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | |
Number_ContingentConsiderationOblig | Contingent consideration | Minimum | Maximum | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | |
Contingent consideration | Nationwide Traffic Services, LLC. | DSI | Sharp Freight Systems, Inc. [Member] | Selling, general and administrative expenses | Selling, general and administrative expenses | Total | Total | Level 1 | Level 1 | Level 2 | Level 2 | Level 3 | Level 3 | ||||||
Contingent consideration | Contingent consideration | Contingent consideration | Contingent consideration | Contingent consideration | Contingent consideration | Contingent consideration | Contingent consideration | Contingent consideration | Contingent consideration | Contingent consideration | |||||||||
Fair value measurement: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent Consideration Obligations adjusted by Fair Value Adjustment | 10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Probability rate of paying the contingent consideration | ' | ' | 15.00% | 60.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rate used to determine fair value of contingent consideration | ' | ' | 3.00% | 12.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent consideration obligation | ' | ($7,009,924) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($7,009,924) | ($7,150,432) | $0 | $0 | $0 | $0 | ($7,009,924) | ($7,150,432) |
Reconciliation of the beginning and ending balances of the liabilities measured at fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at beginning of period | ' | ' | ' | ' | -7,150,432 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase related to acquisition of OFS | -880,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Change in fair value | ' | ' | ' | ' | -224,162 | ' | ' | ' | ' | -224,162 | -758,695 | ' | ' | ' | ' | ' | ' | ' | ' |
Settlements | ' | ' | ' | ' | 1,244,670 | 0 | 437,500 | 520,000 | 287,170 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at end of period | ' | ' | ' | ' | ($7,009,924) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangibles_and_Other_Assets_G
Intangibles and Other Assets - Goodwill (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Jan. 02, 2014 | Mar. 31, 2014 |
Online Freight Services, Inc. [Member] | Online Freight Services, Inc. [Member] | Comcar Logistics, LLC [Member] | |||
Goodwill: | ' | ' | ' | ' | ' |
Goodwill, Acquired During Period | ' | ' | $4,286,440 | ' | $2,180,153 |
Goodwill roll-forward: | ' | ' | ' | ' | ' |
Balance at beginning of period | 58,116,653 | 51,650,060 | ' | ' | ' |
Business Acquisition, Goodwill, Expected Tax Deductible Amount | ' | ' | ' | 3,406,440 | ' |
Balance at end of period | $58,116,653 | $51,650,060 | ' | ' | ' |
Intangibles_and_Other_Assets_I
Intangibles and Other Assets - Intangible Assets (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Summary of amortizable intangible assets: | ' | ' | ' |
Finite-lived intangible assets, gross | $28,917,979 | ' | $21,767,979 |
Less accumulated amortization | -11,821,383 | ' | -11,120,733 |
Intangible assets, net | 17,096,596 | ' | 10,647,246 |
Weighted average useful life | '8 years 11 months | ' | ' |
Amortization of expense | 700,650 | 598,437 | ' |
Estimated amortization expense for hte next five years and thereafter: | ' | ' | ' |
Remainder of 2014 | 2,151,143 | ' | ' |
2015 | 2,623,685 | ' | ' |
2016 | 2,266,329 | ' | ' |
2017 | 1,987,904 | ' | ' |
2018 | 1,656,647 | ' | ' |
Thereafter | 6,410,888 | ' | ' |
Intangible assets, net | 17,096,596 | ' | 10,647,246 |
Customer relationships | ' | ' | ' |
Summary of amortizable intangible assets: | ' | ' | ' |
Finite-lived intangible assets, gross | 28,138,979 | ' | 21,438,979 |
Weighted average useful life | '9 years 0 months | ' | ' |
Non-compete agreements | ' | ' | ' |
Summary of amortizable intangible assets: | ' | ' | ' |
Finite-lived intangible assets, gross | 139,000 | ' | 139,000 |
Weighted average useful life | '2 years 10 months 24 days | ' | ' |
Trade names | ' | ' | ' |
Summary of amortizable intangible assets: | ' | ' | ' |
Finite-lived intangible assets, gross | $640,000 | ' | $190,000 |
Weighted average useful life | '4 years 5 months | ' | ' |
Accrued_Expenses_and_Other_Non2
Accrued Expenses and Other Noncurrent Liabilities (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Payables and Accruals [Abstract] | ' | ' |
Accrued compensation | $4,067,430 | $4,147,590 |
Accrued rebates | 2,371,749 | 2,298,476 |
Deferred rent | 276,515 | 263,893 |
Other | 2,775,234 | 1,612,158 |
Total accrued expenses | $9,490,928 | $8,322,117 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' |
Income before provision for income taxes | $3,926,775 | $4,754,608 |
Income tax expense | ($1,496,816) | ($1,777,976) |
Effective tax rate | 38.10% | 37.40% |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Anti-dilutive sercurities excluded from the calculation of earnings per share: | ' | ' |
Net income | $2,429,959 | $2,976,632 |
Denominatior for basic earnings per share-weighted-average shares (in shares) | 22,967,118 | 22,796,476 |
Employee stock options/Unvested Restricted Stock (in shares) | 482,459 | 443,696 |
Denominator for dilutive earnings per share (in shares) | 23,449,577 | 23,240,172 |
Basic net income per common share (USD per share) | $0.11 | $0.13 |
Diluted net income per common share (USD per share) | $0.10 | $0.13 |
Stock Options [Member] | ' | ' |
Anti-dilutive sercurities excluded from the calculation of earnings per share: | ' | ' |
Stock options excluded from the calculation of diluted earnings per share (in shares) | 0 | 0 |
Stock_Based_Compensation_Plans1
Stock Based Compensation Plans (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Stock based compensation plans: | ' | ' |
Stock-based compensation expense | $1,308,313 | $1,071,938 |
Tax benefits from stock-based compensation expense | $510,242 | $418,056 |
Stock Options [Member] | ' | ' |
Stock based compensation plans: | ' | ' |
Grants in period, options | 0 | 0 |
Restricted stock | ' | ' |
Stock based compensation plans: | ' | ' |
Grants in period, other than options | 163,257 | 101,457 |
Performance and Market Based Stock | ' | ' |
Stock based compensation plans: | ' | ' |
Grants in period, other than options | 43,437 | ' |
Performance Stock | ' | ' |
Stock based compensation plans: | ' | ' |
Grants in period, other than options | ' | 38,701 |
Legal_Matters_Loss_Contingency
Legal Matters - Loss Contingency (Details) (Shipper Direct Logistics, Inc., USD $) | Aug. 31, 2012 | Sep. 25, 2012 |
Threatened litigation | ||
Wrongful termination | ||
Legal matters: | ' | ' |
Estimate of possible loss | ' | $2,400,000 |
Returned purchase price | $1,779,554 | ' |
Legal_Matters_Gain_Contingency
Legal Matters - Gain Contingency (Details) (Shipper Direct Logistics, Inc., Positive outcome of litigation, USD $) | Jan. 31, 2013 |
Shipper Direct Logistics, Inc. | Positive outcome of litigation | ' |
Gain Contingencies [Line Items] | ' |
Unrecorded amount of gain contingency | $2,500,000 |