EXHIBIT 99.2
CONTACT:
Segmentz, Inc.
Jeff Curry
269-695-4955
JeffC@express-1.com
SEGMENTZ, INC. REPORTS SOLID
FINANCIAL RESULTS FOR THIRD QUARTER OF 2005
COMPANY COMPLETES RESTRUCTURING, GENERATES BREAKEVEN EBITDA
AND RAISES ANNUAL EBITDA GUIDANCE
BUCHANAN, Mich. - November 9, 2005 - Segmentz, Inc. (AMEX: SZI), a leading
provider of expedited transportation services, today announced its financial
results for the third quarter ended September 30, 2005.
For the third quarter of 2005, revenues were $9.5 million compared with $14.4
million for the third quarter of 2004. The decline in revenue is directly
attributed to the sale of unprofitable, non-core assets and operating units. For
the third quarter of 2005, the Company reported a GAAP net loss of approximately
$551,000, or $0.02 per share, which includes approximately $490,000 in
restructuring charges. This compares with a GAAP net loss of approximately
$289,000, or $0.01 per share, for the comparable period in 2004. EBITDA was
positive by approximately $331,000 for the third quarter of 2005. This compares
with an EBITDA loss of approximately $149,000 for the year-ago quarter. Please
refer to Table 1 at the end of this news release for a reconciliation of net
income, as reported, to EBITDA.
"Segmentz accomplished all of its principal objectives in the third quarter,"
said Michael Welch, Segmentz, Inc. president and chief executive officer. "We
continued to grow our core revenues and posted strong profitability at
Express-1, our primary operating unit. We also named a new chief financial
officer, completed our restructuring activities and entered into a new line of
credit. As a result of these actions, the Company is now competing in the
marketplace with a renewed sense of focus and stability."
"We met our sales goals for the third quarter, growing revenue by approximately
20 percent year-over-year at Express-1," Welch said. "This is particularly
impressive given our strong results in the year-ago quarter. During the quarter,
we focused on our core growth opportunity - expedited transportation services -
and successfully expanded our fleet of independent owner operators. In addition
to Express-1, which generated approximately $8.1 million in third-quarter sales,
our Evansville operation contributed approximately $1.2 million in quarterly
revenue and additional profits."
Mark Patterson, Segmentz, Inc.'s newly appointed chief financial officer, said,
"With the sale of Bullet and the relocation of our corporate headquarters, we
have brought to a close an extended period of reorganization. In total, our
restructuring actions reduced the Company's
total quarterly operating expenses by more than 35 percent year-over-year. Our
employee headcount has been reduced from 441 as of September 30, 2004 to 127 as
of September 30, 2005. This restructuring has substantially shifted our cost
structure to a more variable model. We also generated greater efficiencies by
moving from four operational software platforms to one standard platform."
ADDITIONAL THIRD-QUARTER FINANCIAL INFORMATION
- - Operating expenses, which consist primarily of payment for owner operator and
partner trucking services, fuel, maintenance and insurance costs, were
approximately $7.4 million for the third quarter of 2005. These expenses
declined by approximately 39 percent from $12.1 million in the third quarter
of 2004. This decline is the result of the Company's restructuring
initiatives and the sale of unprofitable, non-core operating units.
- - Gross profit for the third quarter of 2005 was approximately $2.1 million, or
22 percent of total sales. This is a significant improvement from the
Company's gross profit of approximately $2.2 million, or 16 percent of sales,
for the year-ago quarter, reflecting the Company's focus on its more
profitable lines of business.
- - General and administrative expenses were approximately $2.1 million,
exclusive of restructuring costs of approximately $490,000, for the third
quarter of 2005. This is down from $2.7 million for the third quarter of
2004, again reflecting the Company's restructuring actions.
- - Segmentz, Inc. closed the third quarter with approximately $176,000 in cash.
This balance is down from $854,000 on December 31, 2004. The reduction in
cash is due primarily to a decline in current liabilities, and cash
expenditures associated with the Company's Temple Trucking and Bullet
Transportation transactions. In a separate press release today, the Company
announced that it has entered into a $6 million, two-year asset-based
revolving credit facility with Chemical Bank that will support and facilitate
its growth.
FINANCIAL GUIDANCE
"With our restructuring activities behind us, our full attention is now aimed
at generating profitable growth through Express-1's expedited transportation
services," Welch continued. "Demand for carriers of high-priority freight is
increasing rapidly and continues to outstrip supply. To capitalize on these
market conditions we intend to expand our fleet of independent owner
operators. We also intend to continue to cultivate relationships with peer
companies in our industry that can supplement Express-1's capacity and
provide us with an additional revenue stream."
"At the same time, we will seek opportunities to drive additional leverage in
our operating model. We believe these initiatives will enable us to return to
GAAP profitability in the fourth quarter and maintain a double-digit growth
rate into 2006 at Express-1, our primary operating unit," concluded Welch.
Segmentz, Inc. today updated the guidance it provided in August for the full
year 2005. The Company continues to expect revenues in the range of $38.5
million to $40 million for the year ended December 31, 2005. The Company now
expects to be EBITDA positive for the full year rather than approximately
breakeven.
CONFERENCE CALL/WEBCAST INFORMATION
Management will conduct a conference call this morning at 10:00 a.m. ET to
discuss the Company's third-quarter financial results. Those interested in
accessing a live or archived webcast of the call should visit the Company's
website at http://www.express-1.com. Those wishing to take part in the live
teleconference call can dial 877-407-9210 or 201-689-8049. A playback will be
available through midnight on November 17, 2005. To listen to the playback,
please call 877-660-6853 or 201-612-7415. Use account number 286 and conference
ID number 175007.
ABOUT SEGMENTZ, INC.
Segmentz, Inc. provides expedited transportation services to more than 1,000
organizations, ranging from mid-sized companies to the Fortune 500. Through its
primary operating unit - Express-1 - the Company specializes in same-day and
next-day pick up and delivery. To maximize the Company's flexibility and
minimize overhead, Segmentz maintains a non-asset-based business model and
utilizes a fleet of professional, independent owner operators. The Company has a
state-of-the-art 24/7 call center utilizing a world-class communications
technology and dispatch infrastructure that covers the 48 continental U.S.
states and Canada. Segmentz, Inc. is publicly traded on the American Stock
Exchange under the symbol SZI. For more information about the Company, visit
www.express-1.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that may be subject to
various risks and uncertainties. Such forward-looking statements are made
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995 and are made based on management's current expectations or
beliefs as well as assumptions made by, and information currently available to,
management. These forward-looking statements, which may include statements
regarding our future financial performance or results of operations, including
expected revenue growth, cash flow growth, future expenses, future operating
margins and other future or expected performance, are subject to the following
risks: that our recent reorganization fails to result in projected operating
efficiencies; the acquisition of businesses or the launch of new lines of
business, which could increase operating expenses and dilute operating margins;
increased competition, which could lead to negative pressure on our pricing and
the need for increased marketing; the inability to maintain, establish or renew
relationships with customers, whether due to competition or other factors; the
inability to comply with regulatory requirements governing our business
operations; and to the general risks associated with our businesses.
In addition to the risks and uncertainties discussed above you can find
additional information concerning risks and uncertainties that would cause
actual results to differ materially from those projected or suggested in the
forward-looking statements in the reports that we have filed with the Securities
and Exchange Commission. The forward-looking statements contained in this press
release represent our judgment as of the date of this release and you should not
unduly rely on such statements. Unless otherwise required by law, we undertake
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise after the
date of this press release. In light of these
risks and uncertainties, the forward-looking events and circumstances discussed
in the filing may not occur, and actual results could differ materially from
those anticipated or implied in the forward-looking statements.
USE OF GAAP AND NON-GAAP MEASURES
In addition to results presented in accordance with generally accepted
accounting principles (GAAP), the Company has included "EBITDA", a non-GAAP
financial measure. The Company defines EBITDA as earnings before interest,
taxes, depreciation and amortization. In addition, the Company excludes from its
EBITDA calculation the cumulative effect of a change in accounting principle,
discontinued operations, and the impact of restructuring and certain other
charges, and includes in the EBITDA calculation selected financial data related
to various Company acquisitions. A reconciliation of EBITDA to the most directly
comparable GAAP financial measure is set forth herein.
Management believes the use of non-GAAP financial measures provides useful
information to investors to assist them in understanding the underlying
operational performance of the Company. Specifically, management believes EBITDA
is a useful measure of operating performance before the impact of investing and
financing transactions, making comparisons between companies' earnings power
more meaningful and providing consistent period-over-period comparisons of the
Company's performance. The Company uses these non-GAAP financial measures
internally to measure its ongoing business performance and in reports to bankers
to permit monitoring of the Company's ability to pay outstanding liabilities.
GAAP RECONCILIATION
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------------------------------------------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Net loss as reported $ (550,697) $ (288,783) $(6,412,570) $(1,087,165)
Income tax (benefit) provision $ -- $ (166,000) $ -- $ (601,000)
Interest expense $ 56,424 $ 11,590 $ 133,108 $ 93,942
Depreciation and amortization $ 335,699 $ 293,871 $ 1,175,459 $ 822,578
Restructuring, exit and
consolidation expenses $ 490,039 $ -- $ 4,448,039 $ --
----------- ----------- ----------- -----------
EBITDA $ 331,465 $ (149,322) $ (655,964) $ (771,645)
----------- ----------- ----------- -----------
Segmentz, Inc.
Statements of Operations (Unaudited)
Three Months Ended Nine Months Ended
-------------------------------------------------------------------
September 30, September 30, September 30, September 30,
2005 2004 2005 2004
------------ ------------ ------------- -------------
Revenues:
Operating revenue $ 9,511,754 $ 14,361,376 $ 30,150,370 $ 28,550,218
Expenses:
Operating expenses 7,447,718 12,113,206 23,897,865 23,803,296
------------ ------------ ------------ ------------
Gross profit 2,064,036 2,248,170 6,252,505 4,746,922
Sales, general and administrative expense 2,068,270 2,691,363 8,083,928 6,341,145
Restructuring, exit and consolidation expense 490,039 -- 4,448,039 --
------------ ------------ ------------ ------------
Total sales, general and administrative
expense 2,558,309 2,691,363 12,531,967 6,341,145
Interest Expense 56,424 11,590 133,108 93,942
------------ ------------ ------------ ------------
Income (loss) before income tax provision (550,697) (454,783) (6,412,570) (1,688,165)
Income tax (benefit) provision -- (166,000) -- (601,000)
------------ ------------ ------------ ------------
Net loss $ (550,697) $ (288,783) $ (6,412,570) $ (1,087,165)
============ ============ ============ ============
Basic loss per common share (0.02) (0.01) (0.24) (0.05)
------------ ------------ ------------ ------------
Basic weighted average common shares outstanding (in 000's) 26,730 26,288 26,722 23,058
------------ ------------ ------------ ------------
Diluted loss per common share (0.02) (0.01) (0.24) (0.05)
------------ ------------ ------------ ------------
Diluted weighted average common shares outstanding (in 000's) 26,730 26,288 26,722 23,058
------------ ------------ ------------ ------------
Segmentz, Inc.
Balance Sheet
September 30, 2005
(Unaudited) December 31, 2004
ASSETS
Current assets:
Cash and cash equivalents $ 175,571 $ 853,588
Accounts receivable, net of
allowance of $578,000 5,195,615 7,522,402
Prepaid expenses 248,927 987,733
Other current assets 789,835 1,538,000
---------------------------------------------------
Total current assets 6,409,948 10,901,723
Property and equipment, net of
accumulated depreciation 2,347,809 4,120,168
Goodwill 1,857,045 2,634,000
Identified intangible assets 4,737,903 6,196,115
Loans and advances 551,993 131,517
Other long term assets 1,918,224 1,081,505
---------------------------------------------------
$ 17,822,922 $ 25,065,028
---------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 840,277 $ 2,080,679
Accrued salaries and wages 213,451 643,718
Accrued expenses, other 1,947,025 2,669,750
Line of credit 2,521,000 1,182,926
Short-term portion of long-term debt 248,307 480,309
Other current liabilities 141,567 130,000
---------------------------------------------------
Total current liabilities 5,911,627 7,187,382
---------------------------------------------------
Notes payable and capital leases 886,689 558,805
Other long-term liabilities 324,200 16,544
---------------------------------------------------
Total long-term liabilities 1,210,889 575,349
Stockholders' equity:
Common stock, $.001 par value;
100,000,000 shares authorized;
26,730,034 shares issued
and outstanding 26,730 26,727
Additional paid-in capital 20,470,813 20,405,136
Treasury stock (255,000)
Accumulated deficit (9,542,137) (3,129,556)
---------------------------------------------------
Total stockholders' equity 10,700,406 17,302,297
---------------------------------------------------
$ 17,822,922 $ 25,065,028