XPO, Inc. - Quarter Report: 2010 September (Form 10-Q)

Express-1 Expedited Solutions, Inc.

Notes to Consolidated Financial Statements
Three and Nine Months Ended September 30, 2010 and 2009
(Unaudited)

1. Significant Accounting Principles

Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements of Express-1 Expedited Solutions, Inc. (“we”, “us”, “our” or the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with the instructions to Form 10-Q. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted pursuant to those rules and regulations. However, we believe that the disclosures contained herein are adequate to make the information presented not misleading.

     The financial statements reflect, in our opinion, all material adjustments (which include only normal recurring adjustments) necessary to fairly present our financial position at September 30, 2010 and December 31, 2009 and results of operations for the three and nine month periods ended September 30, 2010 and 2009. The preparation of the financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best available information and actual results could differ materially from those estimates.

     These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended December 31, 2009 included in our Annual Report on Form 10-K as filed with the SEC and available on the SEC’s website (www.sec.gov). Results of operations in interim periods are not necessarily indicative of results to be expected for a full year.

Revenue Recognition

     Within the Company’s Express-1 and Bounce Logistics business units, revenue is recognized at the time of freight delivery; with related costs of delivery being accrued as incurred and expensed within the same period in which the associated revenue is recognized. For these business units, the Company uses the following supporting criteria to determine revenue has been earned and should be recognized:

	•		Persuasive evidence that an arrangement exists,
	•		Services have been rendered,
	•		The sales price is fixed and determinable, and
	•		Collectability is reasonably assured.

     Within its Concert Group Logistics business unit, the Company utilizes an alternative point in time to recognize revenue. Concert Group Logistics revenue and associated operating expenses are recognized on the date the freight is picked up from the shipper. This method of revenue recognition is not the preferred method of revenue recognition as prescribed within generally accepted accounting principles in the United States of America (US GAAP). This method recognizes revenue and associated expenses prior to the point in time that all services are completed; however, the use of this method does not result in a material difference. The Company has evaluated the impact of this alternative method on its consolidated financial statements and concluded that the impact is not material to the financial statements.

     The Company reports revenue on a gross basis in accordance with US GAAP principles. The following facts justify our position of reporting revenue on a gross basis:

	•		The Company is the primary obligor and is responsible for providing the service desired by the customer.
	•		The customer holds the Company responsible for fulfillment including the acceptability of the service.
	•		The Company has discretion in setting sales prices and as a result, its earnings vary.
	•		The Company has discretion to select its drivers, contractors, or other transportation providers (collectively, “service providers”) from among thousands of alternatives, and
	•		The Company bears credit risk on its receivables.

Stock-Based Compensation

     The Company has in place a stock option plan approved by the shareholders for 5,600,000 shares of its common stock. Through the plan, the Company offers stock options to employees and directors which assist in recruiting and retaining these individuals. Under the plan, the Company may also grant restricted stock awards, subject to the satisfaction by the recipient of certain conditions specified in the restricted stock grant.

     Options generally become fully vested three to five years from the date of grant and expire five to ten years from the grant date. During the nine-month period ended September 30, 2010, the Company granted 635,000 options to purchase shares of its common stock while cancelling or retiring 301,000 options in the same period. As of September 30, 2010 the Company has 3,130,000 options outstanding and an additional 2,122,000 options available for future grants under the existing plan. During the life of the plan 347,000 stock options have been exercised.

     The weighted-average fair value of each stock option recorded in expense for the nine-month period ended September 30, 2010 was estimated on the date of grant using the Black-Scholes option pricing model and amortized over the requisite service period of the underlying options. The Company has used one grouping for the assumptions, as its option grants are primarily basic with similar characteristics. The expected term of options granted has been derived based upon the Company’s history of actual exercise behavior and represents the period of time that options granted are expected to be outstanding. Historical data was also used to estimate option exercises and employee terminations. Estimated volatility is based upon the Company’s historical market price at consistent points in a period equal to the expected life of the options. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant and the dividend yield is zero. The weighted average assumptions outlined in the table below were utilized in the calculations of compensation expense from option grants in the reporting period reflected.

		Nine Months Ended
		September 30,
		2010		2009
Risk-free interest rate		2.5%		2.8%
Expected life (in years)		5.8		5.3
Expected volatility		35%		39%
Expected dividend yield		none		none
Grant date fair value		$0.53		$0.31

     The following table summarizes the option activity for the nine-month period ended September 30, 2010:

										Weighted
						Weighted Average				Average
		Options				Exercise Price				Remaining Life
Outstanding at December 31, 2009			3,143,000			$	1.14				5.0
Granted			635,000				1.41
Expired			(301,000	)			1.28
Exercised			(347,000	)			1.25
Outstanding at September 30, 2010			3,130,000				1.17				6.2
Outstanding exercisable at September 30, 2010			2,348,000			$	1.14				5.4

     For the nine months ended September 30, 2010 and 2009, the Company recognized $156,000 and $143,000, respectively, in stock based compensation.

     As of September 30, 2010, the Company had approximately $337,000 of unrecognized compensation cost related to non-vested share-based compensation that is anticipated to be recognized over a weighted average period of approximately 1.2 years. Estimated remaining compensation expense related to existing share-based plans is $45,000, $147,000, $107,000 and $38,000 for the years ended December 31, 2010, 2011, 2012, and 2013, respectively.

     At September 30, 2010, the aggregate intrinsic value of options outstanding was $2.2 million and the aggregate intrinsic value of options exercisable was $1.7 million. The total fair value of options vested during the nine months ended September 30, 2010 and 2009 was $111,000 and $160,000 respectively.

     347,000 options were exercised during the nine-month period ended September 30, 2010 and zero options were exercised during the nine-month period ended September 30, 2009. Cash proceeds received from the exercise of options for the nine months ended September 30, 2010 and 2009 were $434,000 and $0, respectively.

Use of Estimates

     The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that impact the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company reviews its estimates, including but not limited to: unbilled revenue, purchased transportation, recoverability of long-lived assets, accrual of acquisition earn-outs, recoverability of prepaid expenses, estimated legal accruals, valuation allowances for deferred taxes, valuation of investments and allowance for doubtful accounts, on a regular basis and makes adjustments based on historical experiences and existing and expected future conditions. These evaluations are performed and adjustments are made as information is available. Management believes that these estimates are reasonable and have been discussed with the audit committee; however, actual results could differ from these estimates.

Reclassifications

     Certain prior year amounts shown in the accompanying consolidated financial statements have been reclassified to conform to the 2010 presentation. These reclassifications did not have any effect on total assets, total liabilities, total stockholders’ equity or net income.

Income Taxes

     Taxes on income are provided in accordance with US GAAP. Deferred income tax assets and liabilities are recognized for the expected future tax consequences of events that have been reflected in the consolidated financial statements. Deferred tax assets and liabilities are determined based on the differences between the book values and the tax basis of particular assets and liabilities, and the tax effects of net operating loss and capital loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is recognized as income or expense in the period that included the enactment date. A valuation allowance is provided to offset the net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has evaluated its tax position and concluded no valuation allowance on its deferred tax assets is required, as of September 30, 2010. The Company had previously generated a significant federal net operating loss (NOL) deduction which had been utilized over the past several years. During 2009 the carryforward deduction was fully utilized and no further NOL carryforward will be available for federal tax purposes during 2010. For state tax purposes an NOL still exists and as of September 30, 2010 the NOL carryforward equals approximately $2.3 million.

Goodwill

     Goodwill consists of the excess of cost over the fair value of net assets acquired in business combinations. The Company follows the provisions of US GAAP in its accounting of goodwill, which requires an annual impairment test for goodwill and intangible assets with indefinite lives. The first step of the impairment test requires that the Company determine the fair value of each reporting unit, and compare the fair value to the reporting unit’s carrying amount. To the extent a reporting unit’s carrying amount exceeds its fair value, an indication exists that the reporting unit’s goodwill may be impaired and the Company must perform a second more detailed impairment assessment. The second impairment assessment involves allocating the reporting unit’s fair value to all of its recognized and unrecognized assets and liabilities in order to determine the implied fair value of the reporting unit’s goodwill as of the assessment date. The implied fair value of the reporting unit’s goodwill is then compared to the carrying amount of goodwill to quantify an impairment charge as of the assessment date. The Company performs the annual impairment testing during the third quarter unless events or circumstances indicate impairment of the goodwill may have occurred before that time. The Company evaluated its goodwill during the third quarter and determined that no impairment was necessary.

     The Company added $687,000 of goodwill in the first quarter of 2009, as a result of the final earnout settlement related to the acquisition of certain assets and liabilities of Concert Group Logistics, LLC. For a more complete analysis of this item refer to Footnote 7 — Related Party Transactions.

Identified Intangible Assets

     The Company follows the provisions of US GAAP in its accounting of identified intangible assets, which establishes accounting standards for the impairment of long-lived assets such as property, plant and equipment and intangible assets subject to amortization. The Company reviews long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset is less than its carrying amount, the asset is considered to be impaired. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. During the nine-month periods ended September 30, 2010, and 2009, there was no impairment of intangible assets.

Other Long-Term Assets

     Other long-term assets primarily consist of balances representing various deposits, and the long-term portion of the Company’s non-qualified deferred compensation plan. Also included within this account classification are incentive payments to independent station owners within the Concert Group Logistics network. These payments are made by Concert Group Logistics to certain station owners as an incentive to join the network. These amounts are amortized over the life of each independent station contract and the unamortized portion is recoverable in the event of default under the terms of the agreements.

Estimated Fair Value of Financial Instruments

     The aggregated net fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, receivables, payables, accrued expenses and short-term borrowings. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The fair value of the Company’s debt is estimated based upon the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of similar maturities.

Earnings per Share

     Earnings per common share are computed in accordance with US GAAP which requires companies to present basic earnings per share and diluted earnings per share.

     Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the period.

     Diluted earnings per share are computed by dividing net income by the combined weighted average number of shares of common stock outstanding and dilutive options outstanding during the period.

		Three Months Ended								Nine Months Ended
		September 30, 2010				September 30, 2009				September 30, 2010				September 30, 2009
Income from continuing operations		$	1,730,000			$	801,000			$	4,068,000			$	1,089,000
Income from discontinued operations			—				10,000				—				15,000
Net income		$	1,730,000			$	811,000			$	4,068,000			$	1,104,000
Basic weighted shares outstanding			32,381,502				32,035,218				32,154,890				32,035,218
Diluted weighted shares outstanding			33,008,742				32,138,885				32,741,822				32,142,150
Basic earnings per share
Income from continuing operations		$	0.05			$	0.03			$	0.13			$	0.03
Income from discontinued operations			—				—				—				—
Net income			0.05				0.03				0.13				0.03
Diluted earnings per share
Income from continuing operations			0.05				0.03				0.12				0.03
Income from discontinued operations			—				—				—				—
Net income		$	0.05			$	0.03			$	0.12			$	0.03

2. Recent Accounting Pronouncements

     The Company’s management does not believe that recent codified pronouncements by the FASB will have a material impact on the Company’s current or future financial statements.

3. Acquisitions

  First Class (Express-1, Metro Detroit) (Metro Detroit)

     In January of 2009, the Company purchased certain assets and liabilities from First Class Expediting Services Inc. (FCES). FCES was a Rochester Hills; Michigan based company providing regional expedited transportation in the Midwest. The Company paid the former owners of FCES $250,000 in cash and received approximately $40,000 of net assets consisting primarily of fixed assets net of related debt. The Company funded the transaction through cash available from working capital.

     For financial reporting purposes, Metro Detroit is included within the operating results of Express-1. The Company has recognized identifiable intangible assets of $210,000 amortizable over a 2-5 year period.

  LRG (CGL International)

     On October 1, 2009, CGL purchased certain assets and liabilities of Tampa, Florida based LRG International, Inc., an international freight forwarder. The purchase complements and expands CGL’s ability to move international freight competitively. The transaction has an effective date of October 1, 2009. For financial reporting purposes, CGL International is included within the operating results of CGL.

     At closing, the Company paid the former owners of LRG International, Inc. $2.0 million in cash. The Company used its existing line of credit to finance the transaction. On the one year anniversary of the purchase, the Company will pay the former owners $500,000. The transaction also provides for two potential annual earn-out payments totaling $900,000 provided certain performance criteria are met over a two year period. The Company recorded a liability of $737,000 based on the estimated fair value for these earn-outs. The Company has the discretion of paying the additional consideration in the form of cash, stock or any combination thereof.

     The following table sets forth the components of identifiable intangible assets associated with the acquisition of LRG International, Inc.:

		Fair Value				Useful Lives
Trademark/name		$	220,000			5 years
Association memberships			160,000			5 years
Customer list			1,410,000			12 years
Non-compete agreements			60,000			5 years
Total identifiable intangible assets		$	1,850,000

4. Commitments and Contingencies

Litigation

     In the ordinary course of business, the Company may be a party to a variety of legal actions. The Company does not currently anticipate any of these matters or any matters in the aggregate to have a materially adverse effect on the Company’s business or its financial position or results of operations.

5. Debt

Notes Payable and Capital Leases

     The Company enters into notes payable and capital leases with various third parties from time to time to finance certain operational equipment and other assets used in its business operations. Generally, these loans and capital leases bear interest at market rates, and are collateralized with equipment and certain assets of the Company.

     The following table outlines the Company’s debt obligations as of September 30, 2010 and December 31, 2009.

		Interest rates				Term (months)				As of September 30, 2010				As of December 31, 2009
Term notes payable			2.5	%			36			$	4,167,000			$	1,400,000
Capital leases payable			5% - 18	%			12 - 36				17,000				28,000
Total notes payable and capital leases											4,184,000				1,428,000
Less: current maturities of notes payable and capital leases											1,671,000				1,215,000
Non-current maturities of notes payable and capital leases										$	2,513,000			$	213,000

The Company entered into a new $5.0 million term note March 31, 2010. Commencing April 30, 2010, the term note is payable in 36 consecutive monthly installments consisting of $139,000 in monthly principal payments plus the unpaid interest accrued on the note. Interest is payable at the one-month LIBOR plus 225 basis points (2.51% at September 30, 2010).

6. Revolving Credit Facilities

Line of Credit

     On March 31, 2010, the Company entered a credit facility which provides for a receivables based line of credit of up to $10.0 million. The Company may draw upon the receivables based line of credit the lesser of $10.0 million or 80% of eligible accounts receivable, less amounts outstanding under letters of credit and 50% of the above term loan balance. The proceeds of the line of credit will be used exclusively for working capital purposes.

     Substantially all the assets of the Company and wholly owned subsidiaries (Express-1, Inc., Concert Group Logistics, Inc., and Bounce Logistics, Inc.) are pledged as collateral securing the Company’s performance under the credit facility and in Note 5 above. The line of credit bears interest based upon one-month LIBOR with an initial increment of 200 basis points.

     The line of credit and the term note referenced in Note 5 above carry certain covenants related to the Company’s financial performance. Included among the covenants are a fixed charge coverage ratio and a total funded debt to earnings before interest, taxes, depreciation and amortization ratio. As of September 30, 2010, the Company was in compliance with all terms under the line of credit and the above term note and no events of default existed under the terms of the agreements.

     The Company had outstanding standby letters of credit at September 30, 2010 of $410,000 related to insurance policies either continuing in force or recently canceled. Amounts outstanding for letters of credit reduce the amount available under the line of credit, dollar-for-dollar.

     Available capacity in excess of outstanding borrowings under the line was approximately $5.5 million as limited by 80% of the Company’s eligible receivables as of September 30, 2010. The line of credit carries a maturity date of March 31, 2012. As of September 30, 2010 the line of credit balance was $4.1 million.

7. Related Party Transactions

     In January 2008, in conjunction with the Company’s purchase of substantially all assets of Concert Group Logistics, LLC (“Concert Transaction”), Daniel Para, was appointed to the Board of Directors of the Company. Prior to the completion of the Concert Transaction, Mr. Para served as the Chief Executive Officer of Concert Group Logistics, LLC, and was its largest stockholder. The Company purchased substantially all the assets of Concert Group Logistics, LLC for $9.0 million in cash, 4,800,000 shares of the Company’s common stock and the assumption of certain liabilities. The transaction contained performance targets, whereby the former owners of Concert Group Logistics, LLC could earn up to $2.0 Million of additional consideration. During March of 2009, the final earnout settlement with CGL was completed for consideration totaling $1.2 million that included a $1.1 million cash payment in addition to the forgiveness of an $87,000 debt. The settlement included a general release between the Company and the former owners of Concert Group Logistics, LLC. Subsequent to the release, the Company has no future obligations related to the earnout provisions of the Concert Transaction. As the largest shareholder of Concert Group Logistics, LLC, Mr. Para received, either directly or through his family trusts and partnerships, approximately 85% of the proceeds transferred in the transaction. Immediately after the transaction, Mr. Para became the largest shareholder of the Company, through holdings attributable to himself and Dan Para Investments, LLC.

     In April 2009, the Company contracted the services of Daniel Para to serve as the Director of Business Development. Mr. Para will manage all Company activity related to mergers and acquisitions. His remuneration for these services was $10,000 per month in 2009. For the six months ended June 30, 2010, his remuneration was $53,000. Effective June 1, 2010 Dan Para, was appointed the CEO of CGL and is no longer serving as the Director of Business Development.

     In January 2008, in conjunction with the Concert Group Logistics acquisition, the Company entered into a lease for approximately 6,000 square feet of office space located within an office complex at 1430 Branding Avenue, Downers Grove, Illinois 60515. The lease calls for, among other general provisions, rent payments in the amount of $101,000, $104,000 and $107,000 to be paid for 2010 and the two subsequent years thereafter. The building is owned by an Illinois Limited Liability Company, which has within its ownership group, Daniel Para, the former CEO of Concert Group Logistics, LLC.

     The above transactions are not necessarily indicative of amounts, terms and conditions that the Company may have received in transactions with unrelated third parties.

8. Operating Segments

     The Company has four reportable segments based on the type of service provided, to its customers:

     Express-1, Inc. (Express-1) — provides time critical expedited transportation to its customers. This typically involves dedicating one truck and driver to a load which has a specified time delivery requirement. Most of the services provided are completed through a fleet of exclusive use vehicles that are owned and operated by independent contract drivers. The use of non-owned resources to provide transportation services minimizes the amount of capital investment required and is often described with the terms “non-asset” or “asset-light.” In January of 2009, certain assets and liabilities of First Class Expediting (Metro Detroit) were purchased to complement the operations of Express-1. The financial reporting of this operation has been included with Express-1.

     Concert Group Logistics, Inc. (CGL) — provides freight forwarding services through a chain of independently owned stations located throughout the United States. These stations are responsible for selling and operating freight forwarding transportation services within their geographic area under the authority of CGL. In October of 2009, certain assets and liabilities of LRG International (CGL International) were purchased to complement the operations of CGL. The financial reporting of this operation has been included with CGL.

     Bounce Logistics, Inc. (Bounce) — provides premium truckload brokerage transportation services to its customers throughout the Unites States.

     Corporate — The costs of the Company’s Board of Directors, executive team and certain corporate costs associated with operating as a public company are referred to as “corporate” charges. In addition to the aforementioned items, the Company also commonly records items such as its income tax provision and other charges that are reported on a consolidated basis within the corporate classification item.

     The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Substantially all intercompany sales prices are market based. The Company evaluates performance based on operating income of the respective business segments.

     The following schedule identifies select financial data for each of the business segments.

Express-1 Expedited Solutions, Inc
Segment Data
Three and Nine Months Ended September 30, 2010 and 2009

																						Total				Discontinued
						Concert Group																Continuing				Operations
		Express-1				Logistics				Bounce				Corporate				Eliminations				Operations				E-1 Dedicated
Three Months Ended September 30, 2010
Revenues		$	21,407,000			$	18,586,000			$	5,696,000			$	—			$	(1,241,000	)		$	44,448,000			$	—
Operating income (loss) from continuing operations			2,532,000				552,000				280,000				(444,000	)							2,920,000				—
Depreciation and amortization			172,000				140,000				8,000				5,000								325,000				—
Interest expense							23,000				9,000				—								32,000				—
Tax provision			980,000				193,000				109,000				(172,000	)							1,110,000				—
Goodwill			7,737,000				9,222,000				—				—								16,959,000				—
Total assets			26,505,000				26,247,000				3,694,000				24,179,000				(22,873,000	)			57,752,000				—
Three Months Ended September 30, 2009																							—
Revenues			14,704,000				8,945,000				3,077,000				—				(515,000	)			26,211,000				—
Operating income (loss) from continuing operations			1,407,000				287,000				181,000				(430,000	)							1,445,000				19,000
Depreciation and amortization			176,000				96,000				7,000				—								279,000				—
Interest expense			—				19,000				6,000				1,000								26,000				—
Tax provision			—				—				—				599,000								599,000				9,000
Goodwill			7,737,000				7,865,000				—				—								15,602,000				—
Total assets			24,932,000				17,985,000				1,891,000				13,750,000				(14,238,000	)			44,320,000				—
Nine Months Ended September 30, 2010
Revenues			58,176,000				47,598,000				13,494,000				—				(2,838,000	)			116,430,000				—
Operating income (loss) from continuing operations			6,663,000				1,363,000				518,000				(1,459,000	)							7,085,000				—
Depreciation and amortization			505,000				484,000				23,000				14,000								1,026,000				—
Interest expense							116,000				23,000				1,000								140,000				—
Tax provision			2,741,000				510,000				204,000				(680,000	)							2,775,000				—
Goodwill			7,737,000				9,222,000				—				—								16,959,000				—
Total assets			26,505,000				26,247,000				3,694,000				24,179,000				(22,873,000	)			57,752,000				—
Nine Months Ended September 30, 2009
Revenues			33,682,000				28,739,000				7,089,000				—				(984,000	)			68,526,000				666,000
Operating income (loss) from continuing operations			2,264,000				838,000				308,000				(1,361,000	)							2,049,000				28,000
Depreciation and amortization			537,000				278,000				20,000				—								835,000				1,000
Interest expense			—				52,000				18,000				4,000								74,000				—
Tax provision			—				—				—				858,000								858,000				13,000
Goodwill			7,737,000				7,865,000				—				—								15,602,000				—
Total assets		$	24,932,000			$	17,985,000			$	1,891,000			$	13,750,000			$	(14,238,000	)		$	44,320,000			$	—

9. Discontinued Operations

     During the fourth quarter of 2008, the Company discontinued it Express-1 Dedicated business unit. The Company had operated this unit under the terms of a dedicated contract to supply transportation services to a domestic automotive manufacturer.

     Substantially all of the assets of Express-1 Dedicated have been redeployed in other operating units of the Company, and therefore, no impairment charges were recorded on the Company’s financial statements during 2009. Management does not anticipate recording any additional material activity on its discontinued operations in future periods.

     The following table reflects the revenue, operating expenses, gross margins, and net income of the Company’s discontinued Express-1 Dedicated business unit for the three and nine-month period ending September 30, 2009.

		Three Months Ended				Nine Months Ended
		September 30, 2009				September 30, 2009
Operating revenue		$	—			$	666,000
Operating expense			(19,000	)			532,000
Gross margin			19,000				134,000
Sales, general, and administrative expenses			—				106,000
Income from continuing operations before tax provision			19,000				28,000
Tax provision			9,000				13,000
Net income		$	10,000			$	15,000

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations.

     Forward-Looking Statements. This Form 10-Q 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 facts, included or incorporated by reference in this Form 10-Q which address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof), finding suitable merger or acquisition candidates, expansion and growth of the Company’s business and operations, and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances.

     Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Factors that could adversely affect actual results and performance include, among others, potential fluctuations in quarterly operating results and expenses, government regulation, technology change and competition. Consequently, all of the forward-looking statements made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.

Critical Accounting Policies

     The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions. In certain circumstances, those estimates and assumptions can affect amounts reported in the accompanying consolidated financial statements. We have made our best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. We do not believe there is a great likelihood that materially different amounts will be reported related to the accounting policies described below. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. Note 1 of the “Notes to Consolidated Financial Statements” in our Annual Report on Form 10-K for the year ended December 31, 2009, includes a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements. For the period ended September 30, 2010, there were no significant changes to our critical accounting policies.

New Pronouncements

     The Company’s management does not believe that recent codified pronouncements by the FASB will have a material impact on the Company’s current or future financial statements.

Executive Summary

     Express-1 Expedited Solutions, Inc. (the “Company,” “we,” “our” and “us”), a Delaware corporation, is a transportation services organization focused upon premium logistics solutions provided through its non-asset based or asset-light operating units. The Company’s operations are provided through three distinct but complementary operating divisions, each with its own President. Our wholly owned subsidiaries include; Express-1, Inc. (“Express-1”), Concert Group Logistics, Inc. (“Concert Group Logistics” or “CGL”) and Bounce Logistics, Inc. (“Bounce Logistics”, or “Bounce”). These operating divisions are more fully outlined in the following table.

Business Divisions		Primary Office Location		Premium Industry Niche		Initial Date
Express-1		Buchanan, Michigan		Expedited Transportation		August 2004
Concert Group Logistics		Downers Grove, Illinois		Freight Forwarding		January 2008
Bounce Logistics		South Bend, Indiana		Premium Truckload Brokerage		March 2008

     Express-1 and CGL were both existing companies acquired as part of two separate acquisitions. Express-1, Inc. was formed in 1989, while CGL was formed in 2001. Bounce Logistics was a start-up operation formed in March 2008.

     Express-1, Inc. (Express-1) — provides time critical expedited transportation to its customers. This typically involves dedicating one truck and driver to a load which has a specified time delivery requirement. Most of the services provided are completed through a fleet of exclusive use vehicles that are owned and operated by independent contract drivers. The use of non-owned resources to provide transportation services minimizes the amount of capital investment required and is often described with the terms “non-asset” or “asset-light.” In January of 2009, certain assets and liabilities of First Class Expediting (Metro Detroit) were purchased to complement the operations of Express-1. The financial reporting of this operation has been included with Express-1.

     Concert Group Logistics, Inc. (CGL) — provides freight forwarding services through a chain of independently owned stations located throughout the United States. These stations are responsible for selling and operating freight forwarding transportation services within their geographic area under the authority of CGL. In October of 2009, certain assets and liabilities of LRG International (CGL International) were purchased to complement the operations of CGL. The financial reporting of this operation has been included with CGL.

     Bounce Logistics, Inc. (Bounce) — provides premium truckload brokerage transportation services to its customers throughout the Unites States.

Other Reporting Disclosures

     During the fourth quarter of 2008, the Company discontinued its Express-1 Dedicated business unit. The Company had operated this unit under the terms of a dedicated contract to supply transportation services to a domestic automotive manufacturer. The automotive manufacturer did not renew the contract and Express-1 Dedicated ceased operations in February of 2009. The financial results of this discontinued business unit for all reported periods are included as discontinued operations for reporting purposes.

     Throughout our reports, we refer to the impact of fuel on our business. For purposes of these references, we have considered the impact of fuel surcharge revenues, and the related fuel surcharge expenses only as they relate to our Express-1 business unit. The expediting transportation industry commonly negotiates both fuel surcharges charged to its customers as well as fuel surcharges paid to its carriers. Therefore, we feel that this approach, most readily conveys the impact of fuel revenues, costs, and the resulting gross margin within this business unit.

     Alternatively, within our other two units, Concert Group Logistics and Bounce Logistics, fuel charges to our customers are not commonly negotiated and identified separately from total revenue and the associated cost of transportation. We therefore, have not included an analysis of fuel surcharges for these two operating units. We believe this is a common practice within the freight forwarding and freight brokerage business sectors.

     We often refer to the costs of our Board of Directors, our executive team and certain operating costs associated with operating as a public company as “corporate” charges. In addition to the aforementioned items, we also record items such as our income tax provision and other charges that are reported on a consolidated basis within the corporate line items of the following tables.

For the three months ended September 30, 2010 compared to the three months ended September 30, 2009

The following tables are provided to allow users to visualize quarterly results within our major reporting classifications. The tables do not replace the financial statements, notes thereto, or management discussion contained within this report on Form 10-Q. We encourage users to review these items for a more complete understanding of our financial position and results of operations.

Express-1 Expedited Solutions, Inc.
Summary Financial Table
For the Three Months Ended September 30,

(Unaudited)

																		Percent of
		Quarter to Date								Quarter to Quarter Change								Business Unit Revenue
		2010				2009				In Dollars				In Percentage				2010				2009
Revenues
Express-1		$	21,407,000			$	14,704,000			$	6,703,000				45.6	%			48.2	%			56.1	%
Concert Group Logistics			18,586,000				8,945,000				9,641,000				107.8	%			41.8	%			34.1	%
Bounce Logistics			5,696,000				3,077,000				2,619,000				85.1	%			12.8	%			11.7	%
Intercompany eliminations			(1,241,000	)			(515,000	)			(726,000	)			-141.0	%			-2.8	%			-1.9	%
Total revenues			44,448,000				26,211,000				18,237,000				69.6	%			100.0	%			100.0	%
Direct expenses
Express-1			16,096,000				11,430,000				4,666,000				40.8	%			75.2	%			77.7	%
Concert Group Logistics			16,699,000				8,026,000				8,673,000				108.1	%			89.8	%			89.7	%
Bounce Logistics			4,755,000				2,541,000				2,214,000				87.1	%			83.5	%			82.6	%
Intercompany eliminations			(1,241,000	)			(515,000	)			(726,000	)			-141.0	%			100.0	%			100.0	%
Total direct expenses			36,309,000				21,482,000				14,827,000				69.0	%			81.7	%			82.0	%
Gross margin
Express-1			5,311,000				3,274,000				2,037,000				62.2	%			24.8	%			22.3	%
Concert Group Logistics			1,887,000				919,000				968,000				105.3	%			10.2	%			10.3	%
Bounce Logistics			941,000				536,000				405,000				75.6	%			16.5	%			17.4	%
Total gross margin			8,139,000				4,729,000				3,410,000				72.1	%			18.3	%			18.0	%
Selling, general & administrative
Express-1			2,779,000				1,867,000				912,000				48.8	%			13.0	%			12.7	%
Concert Group Logistics			1,335,000				632,000				703,000				111.2	%			7.2	%			7.1	%
Bounce Logistics			661,000				355,000				306,000				86.2	%			11.6	%			11.5	%
Corporate			444,000				430,000				14,000				3.3	%			1.0	%			1.6	%
Total selling, general & administrative			5,219,000				3,284,000				1,935,000				58.9	%			11.7	%			12.5	%
Operating income from continuing operations
Express-1			2,532,000				1,407,000				1,125,000				80.0	%			11.8	%			9.6	%
Concert Group Logistics			552,000				287,000				265,000				92.3	%			3.0	%			3.2	%
Bounce Logistics			280,000				181,000				99,000				54.7	%			4.9	%			5.9	%
Corporate			(444,000	)			(430,000	)			(14,000	)			-3.3	%			-1.0	%			-1.6	%
Operating income from continuing operations			2,920,000				1,445,000				1,475,000				102.1	%			6.6	%			5.5	%
Interest expense			32,000				26,000				6,000				23.1	%			0.1	%			0.1	%
Other expense			48,000				19,000				29,000				152.6	%			0.1	%			0.1	%
Income from continuing operations before tax			2,840,000				1,400,000				1,440,000				102.9	%			6.4	%			5.3	%
Tax provision			1,110,000				599,000				511,000				85.3	%			2.5	%			2.3	%
Income from continuing operations			1,730,000				801,000				929,000				116.0	%			3.9	%			3.1	%
Loss from discontinued operations, net of tax			—				10,000				(10,000	)			-100.0	%			0.0	%			0.0	%
Net income		$	1,730,000			$	811,000			$	919,000				113.3	%			3.9	%			3.1	%

Express-1 Expedited Solutions, Inc.
Summary of Selling, General & Administrative Expenses
For the Three Months Ended September 30,

(Unaudited)

		Quarter to Date								Quarter to Quarter Change
		2010				2009				In Dollars				In Percentage
Express-1, Inc.
Salaries & benefits		$	1,919,000			$	1,309,000			$	610,000				46.6	%
Purchased services			339,000				165,000				174,000				105.5	%
Depreciation & amortization			123,000				129,000				(6,000	)			-4.7	%
Other			398,000				264,000				134,000				50.8	%
Total selling, general & administrative			2,779,000				1,867,000				912,000				48.8	%
Concert Group Logistics
Salaries & benefits			789,000				377,000				412,000				109.3	%
Purchased services			64,000				20,000				44,000				220.0	%
Depreciation & amortization			140,000				129,000				11,000				8.5	%
Other			342,000				106,000				236,000				222.6	%
Total selling, general & administrative			1,335,000				632,000				703,000				111.2	%
Bounce
Salaries & benefits			472,000				247,000				225,000				91.1	%
Purchased services			34,000				18,000				16,000				88.9	%
Depreciation & amortization			8,000				7,000				1,000				14.3	%
Other			147,000				83,000				64,000				77.1	%
Total selling, general & administrative			661,000				355,000				306,000				86.2	%
Corporate
Salaries & benefits			118,000				86,000				32,000				37.2	%
Purchased services			191,000				232,000				(41,000	)			-17.7	%
Depreciation & amortization			5,000				—				5,000				100.0	%
Other			130,000				112,000				18,000				16.1	%
Total selling, general & administrative			444,000				430,000				14,000				3.3	%
Total SG&A expenses
Total salaries & benefits			3,298,000				2,019,000				1,279,000				63.3	%
Total purchased services			628,000				435,000				193,000				44.4	%
Total depreciation & amortization			276,000				265,000				11,000				4.2	%
Total other			1,017,000				565,000				452,000				80.0	%
Total selling, general & administrative		$	5,219,000			$	3,284,000			$	1,935,000				58.9	%

     Consolidated Results

     Solid growth in all three operating divisions continued in the third quarter of 2010 when compared to the same quarter in 2009. We continue to believe that our 2009 investment in sales diversification and maintaining our Express-1 fleet have paid big dividends in 2010. The sales team has produced an increasingly diverse customer base, and our successful 2009 acquisitions of First Class and LRG International have been integrated and continue to grow and prosper. Express-1 has experienced solid overall revenue growth with its international department becoming a major factor in Express-1’s service offerings. Additionally, CGL and Bounce are seeing strong organic growth as the freight environment continues to improve. Based on the above, gross revenues increased to $44.4 million in the third quarter as compared to $26.2 million in the same period in 2009, representing a 69.6% increase.

     Direct expenses represent expenses attributable to freight transportation. During the third quarter of 2010, these expenses continued to maintain a direct relationship to our operating revenues. Our “asset light” operating model provides transportation capacity through variable cost transportation alternatives, and therefore enables us to control our operating costs as our volumes fluctuate. Our primary means of providing capacity are through our fleet of independent contractors and brokerage relationships. We continue to view this operating model as a strategic advantage. Our overall gross margin improved to 18.3% for the third quarter of 2010 as compared to 18.0% for the third quarter of 2009 due in large part to improved margins at Express-1. We believe that this is also a positive sign for the economy as overall industry capacity shortages coupled with economic improvements continue to put upward pressure on margins.

     We are encouraged that as a percentage to total revenue our SG&A costs have dropped during the third quarter of 2010 to 11.7% as compared to 12.5% in the comparable period in 2009. Overall, selling, general and administrative (SG&A) expenses increased by $1.9 million for the three months ended September 30, 2010 compared to the same period in 2009. Salaries and benefits represented $1.3 million of the increased SG&A costs and were incurred due to the increased business volumes in addition to reestablishing some of the benefits that were eliminated in 2009. The current percentage of 11.7% is consistent with historical trends and we believe this percentage is sustainable throughout the remainder of the year as additional volumes have contributed to our efficiencies.

     Net income for the quarter ended September 30, 2010 totaled $1.7 million compared to $811,000 for the same quarter in 2009 representing an increase of 113.3%. This positive trend reflects the overall improvement in the economy in addition to efficiencies garnered during the economic downturn. This positive trend also reflects positive impacts due to acquisition activity over the past two years.

     Express-1

     For the fourth consecutive quarter, Express-1 generated record quarterly revenues of $21.4 million in the third quarter as revenue grew by 45.6% compared to the same period in 2009. Express-1’s continued investment in sales diversification has paid off handsomely as it has expanded its presence into other markets. Also, the Company’s investment in its Mexican freight operation has exceeded management’s expectations by providing approximately 17.0% of Express-1’s revenue for the quarter. During the quarter, home appliance, and retail business sectors have also contributed to the Company surpassing previous year’s levels and have contributed to our overall improvement in diversifying our customer base which historically has been more dependent on the automotive sector. Additionally, our Detroit Metro office (formerly First Class Expedite Service) continued to provide a boost to our business by serving as the key contact for certain large customer relationships. In the quarter, the Detroit office tendered 518 shipments with our main office, and handled approximately 6,000 shipments with their Detroit based fleet. Express-1 has historically rebounded quickly from recessions as the expediting industry in general is typically one of the first benefactors of a recovering economy.

     Fuel prices have increased resulting in a corresponding increase in fuel surcharge as a percentage of revenue in the third quarter of 2010. For the three month period ended September 30, 2010, fuel surcharge revenues represented 12.1% of our revenue as compared to 10.2% in the same period in 2009. Rising fuel prices tend to have a negative impact on our gross margin percentage since these revenues are substantially passed through to our owner operators. We believe that any negative margin impact from fuel will be offset by pricing adjustments allowed by the market due to tightening truck capacity.

     Express-1’s gross margin percentage increased to 24.8% for the third quarter of 2010 compared to 22.3% in the same quarter in 2009. We believe that margins will remain somewhat consistent moving forward in 2010 as tightening capacity has allowed the Company to gain margin with targeted revenue increases. We are somewhat cautious with our anticipated margin moving forward due to the fact that direct transportation cost pressures due to fuel increases and an overall lack of capacity will offset any upside gains that the market might allow on the revenue side.

     Selling, general and administrative expenses increased slightly in the third quarter of 2010 to 13.0% as compared to 12.7% in the third quarter of 2009. Overall, selling, general and administrative (SG&A) expenses increased by $912,000 in the third quarter of 2010 compared to the same period in 2009. The current percentage of 13.0% is consistent with historical trends and we believe this percentage is sustainable throughout the remainder of the year. Increases in salaries and benefits added $610,000 to the SG&A, compared to the same quarter in 2009. The increase in this area resulted from increased business volumes in addition to the reestablishment of benefits that were eliminated in 2009.

     For the quarter ended September 30, 2010, Express-1 generated income from operations before tax of $2.5 million compared to $1.4 million in the same quarter in 2009 representing an increase of 80.0%. Management remains optimistic about the remainder of the year as the overall economy improves and trucking capacity tightens.

     Concert Group Logistics (CGL)

     CGL continued to rebound from its 2009 results. CGL’s third quarter revenue was $18.6 million which compared favorably to revenues of $8.9 million in 2009 representing an increase of 107.8%. The purchase of certain assets and liabilities of LRG International (CGL International) in October of 2009, contributed to the revenue increases during the third quarter as compared to the same period in 2009. CGL International (formerly LRG International) revenues represented $4.0 million or 21.5% of CGL’s third quarter’s revenue.

     Direct expenses of $16.7 million consist primarily of payments for purchased transportation in addition to payments to CGL’s independent offices that control the overall operation of customer shipments. CGL International’s direct expense represented $3.4 million or 20.4% of the total direct expense of CGL. As a percentage of CGL revenue, direct expenses represented 89.8% for the third quarter of 2010 as compared to 89.7% for the same quarter in 2009. We anticipate slight improvements in CGL’s gross margin moving forward due to CGL International being a company-owned office with less of its costs being reflected as direct expenses. These costs relate to the operational activities of the 2 CGL International branches in Tampa and Miami and have been included in the SG&A expense line item for financial presentation purposes.

     Selling, general and administrative expenses increased in the third quarter of 2010 by $703,000 as compared to the same period in 2009. These cost increases relate primarily to additional costs of $355,000 associated with running CGL International as Company owned branches. These additional costs represent a shift from direct costs to SG&A costs due to CGL International’s company owned status. Total SG&A costs of $1.3 million for the third quarter represented an increase of $703,000 from the same quarter in 2009. The majority of this increase, $412,000 was due to increased payroll related to increased volumes and revenues generated during 2010. Additionally, benefits that were discontinued during the recession of 2009 were reestablished during 2010 and have also contributed to the increased costs in the third quarter when compared to the prior year. As a percentage to revenue SG&A costs increased slightly to 7.2% in the third quarter of 2010 as compared to 7.1% in the third quarter of 2009. We anticipate the current SG&A percentage of revenue being sustained for the remainder of the year based on the additional operating costs associated with CGL International being classified on this line item for financial statement presentation. Additionally, other expenses increased by $291,000 in the third quarter of 2010 primarily relating to bad debts incurred during the quarter in addition to other expenses incurred at CGL International.

     For the quarter ended September 30, 2010, Concert Group Logistics generated income from operations before tax of $552,000 representing an increase of 92.3% from the comparable period in 2009. Approximately $220,000 or 39.9% of CGL’s operating income was generated at CGL International. Again, this is due primarily to an improving freight environment and we continue to anticipate favorable results for the remainder of the year as compared to 2009.

     Management continues to focus on the expansion of its independent office network, and is actively pursuing strategic opportunities. As of September 30, 2010 the Company maintained a network of 23 independent offices and 2 Company owned branches as compared to 26 independent offices as of September 30, 2009.

Bounce Logistics

     Bounce continues to see significant growth as its third quarter of 2010 revenues of $5.7 million represented an 85.1% increase over 2009 revenues in the comparable period. We believe this is reflective of an improving economy and Bounce’s aggressive growth strategy. We continue to be very optimistic about growth potential as economic conditions improve in 2010.

     In the third quarter of 2010 Bounces’ direct transportation expenses increased to 83.5% as a percentage of revenue as compared to 82.6% in the third quarter of 2009. This resulted in Bounces’ gross margin being reduced to 16.5% as compared to 17.4% in the comparable period in 2009. We believe the margin for the remainder of 2010 will approximate our current percentage as trucking capacity tightens creating upward pressure on purchased transportation. We believe that volume and price increases will more than offset the margin reduction as the economy continues to improve. We continue to have confidence in Bounce’s ability to grow and access truck capacity in 2010.

     Selling, general and administrative expenses increased by $306,000 in the third quarter of 2010 compared to the same period in 2009. Increases in payroll and related benefits accounted for $225,000 of the increase during the quarter as compared to the same quarter in 2009. As mentioned previously, increased staffing due to volume increases in addition to reestablished benefits that were discontinued in 2009 accounted for this difference. Overall, our SG&A percentage to revenue increased slightly to 11.6% in the third quarter of 2010 as compared to 11.5% in the same period in 2009 and we anticipate that this percentage will be sustainable throughout the remainder of 2010.

     The above items have resulted in Bounce generating operating income of $280,000 in the third quarter of 2010 compared to $181,000 in the same period in 2009. Management continues to be optimistic regarding the future growth and profitability potential of Bounce for the remainder of 2010.

Corporate

     Corporate costs for the third quarter of 2010 increased by $14,000 as compared to the same quarter in 2009. As a percentage of revenue, corporate costs decreased to 1.0% in the third quarter of 2010 from 1.6% in the same period in 2009. We anticipate holding these costs below 2009 levels as increased revenues have produced favorable efficiencies in scale.

For the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009

The following tables are provided to allow users to visualize quarterly results within our major reporting classifications. The tables do not replace the financial statements, notes thereto, or management discussion contained within this report on Form 10-Q. We encourage users to review these items for a more complete understanding of our financial position and results of operations.

Express-1 Expedited Solutions, Inc.
Summary Financial Table
For the Nine Months Ended September 30,

(Unaudited)

																		Percent of
		Year to Date								Year to Year Change								Business Unit Revenue
		2010				2009				In Dollars				In Percentage				2010				2009
Revenues
Express-1		$	58,176,000			$	33,682,000			$	24,494,000				72.7	%			50.0	%			49.2	%
Concert Group Logistics			47,598,000				28,739,000				18,859,000				65.6	%			40.9	%			41.9	%
Bounce Logistics			13,494,000				7,089,000				6,405,000				90.4	%			11.6	%			10.3	%
Intercompany eliminations			(2,838,000	)			(984,000	)			(1,854,000	)			-188.4	%			-2.5	%			-1.4	%
Total revenues			116,430,000				68,526,000				47,904,000				69.9	%			100.0	%			100.0	%
Direct expenses
Express-1			44,358,000				26,099,000				18,259,000				70.0	%			76.2	%			77.5	%
Concert Group Logistics			42,653,000				25,952,000				16,701,000				64.4	%			89.6	%			90.3	%
Bounce Logistics			11,280,000				5,877,000				5,403,000				91.9	%			83.6	%			82.9	%
Intercompany eliminations			(2,838,000	)			(984,000	)			(1,854,000	)			-188.4	%			100.0	%			100.0	%
Total direct expenses			95,453,000				56,944,000				38,509,000				67.6	%			82.0	%			83.1	%
Gross margin
Express-1			13,818,000				7,583,000				6,235,000				82.2	%			23.8	%			22.5	%
Concert Group Logistics			4,945,000				2,787,000				2,158,000				77.4	%			10.4	%			9.7	%
Bounce Logistics			2,214,000				1,212,000				1,002,000				82.7	%			16.4	%			17.1	%
Total gross margin			20,977,000				11,582,000				9,395,000				81.1	%			18.0	%			16.9	%
Selling, general & administrative
Express-1			7,155,000				5,319,000				1,836,000				34.5	%			12.3	%			15.8	%
Concert Group Logistics			3,582,000				1,949,000				1,633,000				83.8	%			7.5	%			6.8	%
Bounce Logistics			1,696,000				904,000				792,000				87.6	%			12.6	%			12.8	%
Corporate			1,459,000				1,361,000				98,000				7.2	%			1.3	%			2.0	%
Total selling, general & administrative			13,892,000				9,533,000				4,359,000				45.7	%			11.9	%			13.9	%
Operating income from continuing operations
Express-1			6,663,000				2,264,000				4,399,000				194.3	%			11.5	%			6.7	%
Concert Group Logistics			1,363,000				838,000				525,000				62.6	%			2.9	%			2.9	%
Bounce Logistics			518,000				308,000				210,000				68.2	%			3.8	%			4.3	%
Corporate			(1,459,000	)			(1,361,000	)			(98,000	)			-7.2	%			-1.3	%			-2.0	%
Operating income from continuing operations			7,085,000				2,049,000				5,036,000				245.8	%			6.1	%			3.0	%
Interest expense			140,000				74,000				66,000				89.2	%			0.1	%			0.1	%
Other expense			102,000				28,000				74,000				264.3	%			0.1	%			0.0	%
Income from continuing operations before tax			6,843,000				1,947,000				4,896,000				251.5	%			5.9	%			2.8	%
Tax provision			2,775,000				858,000				1,917,000				223.4	%			2.4	%			1.3	%
Income from continuing operations			4,068,000				1,089,000				2,979,000				273.6	%			3.5	%			1.6	%
Income from discontinued operations, net of tax			—				15,000				(15,000	)			-100.0	%			0.0	%			0.0	%
Net income		$	4,068,000			$	1,104,000			$	2,964,000				268.5	%			3.5	%			1.6	%