August 22, 2006 at 09:14 AM EDT
Pacific CMA Announces Results for the Second Quarter and First Six Months
Company Reports Double Digit Increases in Revenues and Gross Profits
JAMAICA, N.Y., Aug. 22, 2006 (PRIMEZONE) -- Pacific CMA, Inc. (AMEX:PAM), a global freight forwarding/logistics services company delivering goods primarily through the air and sea gateways of Asia and the United States, today announced its financial results for the second quarter and six months ended June 30, 2006. The 2005 results have been restated to reflect reclassification of expenses related to the Company's Series A convertible redeemable preferred stock, per SFAS no. 133 and 150. Therefore, expenses that had been recorded in other income (expense) in past filings have been reclassified under "Increase in the net loss attributable to common stockholders," following Net income (loss) in the statement of operations.
Total revenue for the 2006 second quarter increased 29%, to $37.4 million from $29.1 million in the previous year's second quarter. The increase in revenue primarily was the result of the organic growth of AGI, Shenzhen Careship, Airgate and Paradigm, and the inclusion of the results of WCL after its acquisition in July 2005.
The Company had a net loss of $198,407 or ($0.01) per share in the 2006 quarter, compared to net income of $240,138 or $0.01 per share in the 2005 second quarter. The decrease in net income was mainly due to a 26% increase in G & A expenses to support the Company's rapid growth, 31% higher forwarding costs and accretion of the Company's Series A preferred stock net to redemption value (mentioned above). EBITDA for the second quarter of 2006 was $555,138 or $0.02 per share compared with $736,858 or $0.03 per share for the same period last year. Gross profit (revenue minus cost of forwarding) for the 2006 second quarter increased 16%, to $5.1 million from $4.4 million in 2005.
For the six months ended June 30, 2006, total revenue increased approximately 24% to $67.8 million compared with $54.7 million in the comparable period of 2005. Continued organic growth of AGI, Shenzhen Careship, Airgate and Paradigm, and the inclusion of WCL's results were the primary drivers of the revenue increase in the first six months.
Although gross profit (revenue minus cost of forwarding) for the six-month period of 2006 increased 15%, to $9.8 million from $8.5 million in 2005, first six months net income and EBITDA were negatively affected by the same factors that impacted net income and EBITDA in the second quarter. Therefore, the Company had a net loss of $976,911 or ($0.04) per share, compared with net income in the 2005 period of $224,211 or $0.01 per share. EBITDA for the six-month period was $729,897 or $0.03 per share for 2006 compared with $1,209,789 or $0.05 per share in 2005.
Alfred Lam, Pacific CMA's Chairman and CEO, said that during the first six months of the year, the Company experienced a 29% and a 16% increase in air freight and sea freight operations respectively, with a 30% and 26% increase in the second quarter alone. "This acceleration in volume can partially be attributed to a number of positive industry trends. While businesses are increasingly outsourcing freight forwarding to save money and stay focused on their own core competencies, they are narrowing the number of freight forwarders they use to those, such as PAM, who can function as knowledgeable long-term partners. Businesses are also increasing their demand for just-in-time and time-definite delivery, which also is one of PAM's many strengths. Additionally, we believe that the gradual reduction of international trade barriers through agreements such as The Closer Economic Partnership Arrangement ("CEPA"), gives us a 'first mover' advantage due to our vast knowledge of business practices and regulations in China," Mr. Lam said.
Pacific CMA's President, Scott Turner, commented, "All our subsidiaries performed well in regard to revenue improvement, a testament to our excellent staff and employees. Although we had considerable cost increases in the first six months as a result of organic growth and the acquisition of WCL, our gross profit, which measures our capability to source, add value and resell third-party products and services, increased significantly. And since that capability is the basis of our business, we believe that Pacific CMA is positioned very well for continued improvement in revenue and cash flow as we move through the remainder of the year."
About Pacific CMA
Pacific CMA is an international, non-asset based supply-chain management company, providing air and ocean freight forwarding, contract logistics, and other logistics-related services. The Company's large and diverse global and local customers operate in industries with unique supply chain requirements, such as the apparel and technology industries. Its AGI Logistics (HK) Ltd. operating unit, based in Hong Kong, is focused on integrated logistics, freight forwarding and warehousing services in the Far East region and Mainland China. Its Airgate International operating unit, founded in 1995, is based in New York and primarily handles import air and ocean shipments from the Far East and Southwest Asia to the United States. The newest division, Paradigm Global Logistics, is located in Los Angeles. For more information, please refer to the Company's Web site: http://www.pacificcma.com.
This press release may contain statements which constitute forward looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995, including statements regarding the intent, belief or current expectations of the Company, its directors, or its officers with respect to the future operating performance of the Company. These forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "plan," "estimate," "approximately," "intend," and other similar words and expressions, or future or conditional verbs such as "should," "would," "could," and "may." In addition, the Company may from time to time make such written or oral "forward-looking statements" in filings with the Securities and Exchange Commission (including exhibits thereto), in its reports to shareholders, and in other communications made by or with the approval of the Company. Investors are cautioned that any such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward looking statements as a result of various factors. Important factors that could cause such differences are described in the Company's periodic filings with the Securities and Exchange Commission.
CONTACT: Pacific CMA Inc. John F. Mazarella, CFO (212) 247-0049 firstname.lastname@example.org EPOCH Financial Group, Inc. James R. Kautz or J. Todd Atenhan (888) 917-5105
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