TLG Target Logistics

Target Logistics, Inc. (AMEX: TLG), a domestic and international freight forwarder and logistics provider, today announced a net income for the fourth quarter ended June 30, 2006 of $642,564 or $.03 per diluted share ($0.03 per basic share), an increase of 27% compared to $505,280 or $.02 per diluted share ($.03 per basic share) reported in the fourth quarter ended June 30, 2005. Fourth quarter revenue was $40.4 million, an increase of 10.0% from the $36.7 million reported in the comparable 2005 period. For the fiscal year ended June 30, 2006, net income increased 73% to $2.7 million, or $.13 per diluted share ($0.15 per basic share), compared to $1.56 million or $.07 per diluted share ($0.08 per basic share) for the fiscal year ended June 30, 2005. Annual revenue increased 16% to $160 million from the $138 million reported in the comparable 2005 period. "Our continued success provides testimony to the strength of our non-asset based business model," said Stuart Hettleman, chairman and chief executive officer. "We met our yearly forecasts, and believe the momentum we have seen in both top and bottom line performance can continue in FY 2007 and beyond. This is our fifteenth consecutive profitable quarter, and our fifth consecutive year of operating income increases for Target." Subsequent to the end of the year, the company announced the acquisition of certain assets of Discovery Air Cargo, Inc., a freight forwarder providing a full range of services to the New York City and Long Island area. The acquisition is expected to add $7 million in annual revenues in FY 2007. "We are very excited about the increase in our acquisition pipeline and its potential impact on our future growth. The Discovery acquisition reflects an important element of our growth strategy: to increase freight volume in cities where Target already has a presence which enables us to negotiate more favorable rates from our transportation providers," concluded Mr. Hettleman. The company noted that FY 2006 marks the 4th consecutive year that SG&A has decreased as a percentage of revenue. On an annual basis, SG&A as a percentage of revenue decreased from 30.1% in 2005 to 28.4% in 2006. "The increase in Q4 revenue of 10% was achieved solely through organic growth," said Phil Dubato, chief financial officer. "Operating and net income increases were solid, despite a comparison with Q4 2005, when we experienced an inordinate demand for value added and special services which command a premium." Target Logistics will hold a conference call at 4:00 PM. ET on Wednesday, September 6, 2006. Interested parties are invited to listen to the call live, over the Internet at www.targetlogistics.com. The live call may also be accessed at http://phx.corporate-ir.net/playerlink.zhtml?c=62341&s=wm&e=1377712. The call will also be available by dialing (866)272-9941, or for international callers, (617) 213-8895 and by using the confirmation code 17101884. A replay of the teleconference will be available until October 6, 2006 at www.targetlogistics.com. A replay will also be available by dialing (888) 286 8010 (domestic) or 617 801 6888 (international) and by using confirmation code 88546544. Target Logistics, Inc. provides domestic and international time definite freight forwarding and logistics services through its wholly owned subsidiary, Target Logistic Services, Inc. Target has a network of offices in 34 cities throughout the United States and a worldwide agent network with coverage in over 70 countries. Its freight forwarding services include arranging for the total transport of customers' freight, including providing door to door service, distributions and reverse logistics. Statements contained in this press release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Although Target Logistics believes that the expectations reflected in such forward-looking statements are reasonable, the forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projections. -0- *T Target Logistics, Inc. Consolidated Statements of Operations Three months ended Twelve months ended June 30, June 30, ------------------------- --------------------------- 2006 2005 2006 2005 ------------ ------------ ------------- ------------- (audited) (audited) Operating revenues $40,404,501 $36,738,180 $160,368,570 $138,392,375 Cost of transportation 27,901,554 24,688,659 110,098,043 93,913,264 ------------ ------------ ------------- ------------- Gross profit 12,502,947 12,049,521 50,270,527 44,479,111 Selling, general and administrative expenses ("SG&A"): Target subsidiary (exclusive forwarder commissions) 3,781,547 3,956,818 15,874,335 15,920,706 SG&A - Target subsidiary 7,144,869 6,693,550 27,620,391 24,002,255 SG&A - Corporate 386,452 274,628 1,384,180 1,102,018 Depreciation and amortization 169,586 264,503 616,310 600,155 ------------ ------------ ------------- ------------- Selling, general and administrative expenses 11,482,454 11,189,499 45,495,216 41,625,134 Operating income 1,020,493 860,022 4,775,311 2,853,977 Other income (expense): Interest (expense) (7,997) (21,910) (126,516) (85,717) Income before taxes 1,012,496 838,112 4,648,795 2,768,260 Provision for income taxes 369,932 332,832 1,943,197 1,207,122 ------------ ------------ ------------- ------------- Net income $642,564 $505,280 $2,705,598 $1,561,138 ------------ ------------ ------------- ------------- Net Income per share attributable to common shareholders: Basic $0.03 $0.03 $0.15 $0.08 ------------ ------------ ------------- ------------- Diluted $0.03 $0.02 $0.13 $0.07 ------------ ------------ ------------- ------------- Weighted average shares outstanding: Basic 17,886,735 15,834,778 16,223,353 15,830,915 ------------ ------------ ------------- ------------- Diluted 21,490,385 21,490,100 21,490,369 21,489,990 ------------ ------------ ------------- ------------- Target Logistics, Inc. and Subsidiaries Selected Balance Sheet Data June 30, June 30, 2006 2005 ------------------- ------------------- (unaudited) (audited) Cash and Cash Equivalents $ 7,015,018 $ 6,525,577 Total Current Assets $ 29,797,740 $ 28,789,386 Total Assets $ 45,250,881 $ 42,599,718 Current Liabilities $ 23,014,672 $ 23,062,048 Long Term Liabilities $ 555,199 $ 377,911 Working Capital $ 6,783,068 $ 5,727,338 Shareholders' Equity $ 21,681,010 $ 19,159,759 Credit Line Availability $ 11,274,357 $ 10,256,965 *T