Cargo Connection Logistics Holdings, Inc. Chairman Issues Shareholder Message
To the Shareholders of Cargo Connections Logistics Holding, Inc.
8/22/2005 5:29:01 PM
INWOOD, N.Y., Aug 22, 2005 (BUSINESS WIRE) -- Since the June 30, 2005 10QSB is the first financial report we have issued as a public company, I thought it would be appropriate to explain some of the nuances of our business and update you on what has transpired over the past few weeks.
First of all, I've been delighted by the level of interest we've received from our shareholders. A significant number have called asking for updates on our plans while several have actually stopped in for a visit at our headquarters in New York. Virtually everyone who has visited the facility has had the same reaction; how impressed they all were with the size and scope of our company.
To truly understand our business you have to take into account that our country is one of the world's largest consumers of goods. It should come as no surprise to any of our shareholders, or for that matter anyone in the United States, that our country does not produce most of the merchandise it consumes. Therefore, about 80 percent of the items used in our everyday lives such as clothing, bedding, electronics, etc. are produced outside of the country - and that's good news for us because the transportation of these goods is what we are all about.
It is critical that you, our shareholders, understand that companies in our industry (and we are no exception) traditionally do approximately 40 percent of its volume in the first two-thirds of the year and the other 60 percent of its volume in the last third of the year. In the industry we refer to this as "peak season". Please keep this in mind as you look at our sales for the first two quarters.
Traditionally we are able to make up any deficits incurred in the first part of the year with the business we generate in the latter part of the year. To that end, we have recently signed agreements with several new clients such as Continental Airlines and we have expanded our relationship with a Fortune 500 company (please note, we are respecting the wishes of this company not to publicly announce its name).
We also recently announced the formation of a new subsidiary, Independent Transport Group, LLC ("ITG") which we believe will have a very positive impact on our business by providing us with the ability to attract more independent operators who are the lifeblood of our industry.
It is important to note the significant costs of going public and complying with the guidelines required to operate as public company as well as the sorting out of the beverage assets are reflected in the most recent filing.
Moreover, during the first half of this year one of our customers, Limited Brands, instituted significant changes with regard to how they do business and it has had a negative, but what management believes temporary, impact on gross revenue. In response, management has taken steps to reduce overhead associated with the operations involved with Limited Brands. In spite of these actions the company realized a modest increase in transportation sales compared to the same period last year.
Additionally, we work with many companies in the fashion industry which is very seasonal. However, we have and continue to diversify our client mix to include hi-tech, personal care products, foodstuffs, etc. and it is through this expanded and diversified client mix as well as the recent entry and expansion of services in new and existing markets that we believe will allow us to achieve organic growth which will eventually be enhanced through acquisition.
What's particularly rewarding is that many of our shareholders, specifically the ones who have paid a site visit, have commented that unlike many Over the Counter Bulletin Board companies, we have a great foundation to build upon. It's also quite evident for anyone who knows us that we are driven to build on that base and grow our business as quickly and as efficiently as possible.
The other piece of the equation that is important for you to understand is that our infrastructure will sustain exponential growth with incremental additions. The systems we currently operate are capable of handling more than 10,000 users and in excess of $1 billion in revenue. Based on such scalability, we believe that we are in a position of growth in a multi-billion dollar industry.
Currently we have approximately 300,000 sq feet of warehouse space that is United States Customs Bonded. Those are the stations that have been referenced in all of our press releases. We have between 35 and 50 tractor trailers with our placards on the side of them.
We have an extensive computer system and an IT Department to support that system as well as our LAN and WAN networks. In fact, our computer system will easily accommodate up to twenty (20) times our current volume. The system has the capacity to sustain around the world operations. It is supported with an imaging system that gives our customers immediate access to up-to-the-hour information on the whereabouts of their freight.
This system will be part of the platform on which we will be able to grow. I think it is also important to note that we are targeting future acquisitions that will allow the company to spread the cost of our operations as a whole. These companies will not only add revenue, but will fill capacity in the stations that have the room to accommodate additional business.
Currently we are in various stages of negotiations with four different acquisition targets each of which will be accretive to earnings if they come to fruition. We've also set strict performance guidelines and standards that will be associated with any and all agreements prior to an acquisition being completed.
Last week we announced the formation of ITG. As previously mentioned, this will be a very important part of our future. As the program develops, you will be kept abreast through our normal channels of communications.
I also want to explain why it has taken longer than we anticipated to complete this filing. For one, we have recently changed independent auditors and that has taken its toll time wise. Additionally, it has been our position from the get go to provide the most timely and accurate information possible. We do anticipate this process to run smoother with future filings.
To say the past few months have been hectic would be an understatement. But, it's also been very rewarding. We not only have our eighty plus employees behind us but a strong shareholder base. I welcome your calls and, yes, even the impromptu visits. While I cannot predict the future, I can tell you that we will continue to strive to do our very best to reward your valued support.
Jesse Dobrinsky
Chairman, Cargo Connection Logistics Holding, Inc.
About Cargo Connection Logistics Corp. / Mid-Coast Management, Inc.
Cargo Connection Logistics Corp. is a leader in world trade logistics. Headquartered adjacent to JFK International Airport, the company is a transportation logistics provider for shipments importing into and exporting out of the United States, especially through the Gateways of Chicago, Illinois; JFK, New York; Miami, Florida and Atlanta, Georgia with service areas throughout the United States and North America. Mid-Coast Management operates container freight station operations specifically designed to handle internationally arriving freight for companies like Mast Industries, the major supplier to Limited Brands - one of the world's largest multi-brand specialty retailers as well as many other significant fashion brands. Since its inception, Mid-Coast Management, Inc. has developed relationships with many other retailers and works with Freight Forwarders from around the world.
Additional information about Cargo Connection can be obtained at its website cargocon.com.
SOURCE: Cargo Connection Logistics Holding, Inc.
For Cargo Connection Logistics Holding, Inc., Inwood
Peter Nasca Associates, Inc.
Peter Nasca, 305-937-1711
pnasca@pnapr.com
. |
