SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): December 29, 2003
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Stonepath Group, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware 001-16105 65-0867684
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
1600 Market Street, Suite 1515
Philadelphia, Pennsylvania 19103
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (215) 979-8370
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 Press release dated December 29, 2003
Item 9. Regulation FD Disclosure.
On December 29, 2003, Stonepath Group, Inc. (the "Company") issued a
press release announcing, among other things, the completion of several
acquisitions, financial guidance for its forecasted 2004 results of operations
and a revision to its 2003 forecasted revenues.
Item 12. Results of Operations and Financial Condition.
The press release dated December 29, 2003 is attached hereto as Exhibit
99.1.
The Company is in the process of preparing amendments to its 2003
quarterly reports, as well as an amendment to its Annual Report on Form 10-K/A
for the year ended December 31, 2002, to restate the consolidated financial
statements contained therein to reduce revenue and costs of transportation by a
like amount for transactions that were previously reported in error. The periods
that will be impacted include the second, third and fourth quarters of 2002, as
well as the first, second and third quarters of 2003.
During the third week of December 2003, and in the course of conducting
a regularly scheduled review of internal controls and centralization of the
financial reporting process, the Company discovered an error in the legacy
accounting process of its International Services division. The error was that
the Company inadvertently failed to eliminate in the consolidation process
certain intercompany transactions between Stonepath Logistics International
Services, Inc. (formerly known as "Global Transportation Systems, Inc.") and
Global Container Line, Inc., its wholly-owned subsidiary which operates as a
non-vessel operating common carrier. This resulted in an overstatement of
revenues and a corresponding overstatement of the cost of transportation, with
no resulting impact on net revenues, EBITDA or net earnings. The Company has
determined that this error had been embedded in the legacy accounting processes
of Global Transportation Systems, Inc. for a period which began substantially
before its acquisition by the Company in April 2002.
A preliminary analysis of the effects of this restatement on previously
reported consolidated revenues and costs of transportation is provided below.
The Company expects to file amended periodic reports on Form 10-Q/A and Annual
Report on Form 10-K/A for the relevant periods, once it has confirmed all
restated amounts with its auditors.
FY 2002 Three Months Ended June 30, 2002 Six Months Ended June 30, 2002
--------------------------------------------- ------------------------------------------------
As Previously As Previously
Reported Adjustment As Restated Reported Adjustment As Restated
------------- ------------ ------------ ------------- ------------ ------------
Total revenue $ 32,689,603 $ (4,213,890) $ 28,475,713 $ 45,755,163 $ (4,213,890) $ 41,541,273
Cost of transportation 23,903,884 (4,213,890) 19,689,994 32,549,853 (4,213,890) 28,335,963
------------ ------------ ------------ ------------ ------------ ------------
Net revenue $ 8,785,719 $ - $ 8,785,719 $ 13,205,310 $ - $ 13,205,310
============ ============ ============ ============ ============ ============
Transportation revenue $ 30,176,525 $ (4,213,890) $ 25,962,635 $ 42,758,978 $ (4,213,890) $ 38,545,088
Cost of transportation 23,903,884 (4,213,890) 19,689,994 32,549,853 (4,213,890) 28,335,963
------------ ------------ ------------ ------------ ------------ ------------
Net transportation revenue 6,272,641 - 6,272,641 10,209,125 - 10,209,125
Net transportation margin 20.8% 24.2% 23.9% 26.5%
Customs brokerage 1,748,245 - 1,748,245 1,748,245 - 1,748,245
Warehousing and other
value added services 764,833 - 764,833 1,247,940 - 1,247,940
------------ ------------ ------------ ------------ ------------ ------------
Total net revenue $ 8,785,719 $ - $ 8,785,719 $ 13,205,310 $ - $ 13,205,310
============ ============ ============ ============ ============ ============
Net income (loss) $ 268,264 $ - $ 268,264 $ (958,690) $ - $ (958,690)
============ ============ ============ ============ ============ ============
EBITDA $ 773,575 $ - $ 773,575 $ (82,138) $ - $ (82,138)
============ ============ ============ ============ ============ ============
Three Months Ended September 30, 2002 Nine Months Ended September 30, 2002
--------------------------------------------- -----------------------------------------------
As Previously As Previously
Reported Adjustment As Restated Reported Adjustment As Restated
------------- ------------ ------------ ------------- ------------ ------------
Total revenue $ 43,860,010 $ (5,958,486) $ 37,901,524 $ 89,615,173 $(10,172,376) $ 79,442,797
Cost of transportation 31,863,934 (5,958,486) 25,905,448 64,413,787 (10,172,376) 54,241,411
------------ ------------ ------------ ------------ ------------ ------------
Net revenue $ 11,996,076 $ - $ 11,996,076 $ 25,201,386 $ - $ 25,201,386
============ ============ ============ ============ ============ ============
Transportation revenue $ 40,512,880 $ (5,958,486) $ 34,554,394 $ 83,271,858 $(10,172,376) $ 73,099,482
Cost of transportation 31,863,934 (5,958,486) 25,905,448 64,413,787 (10,172,376) 54,241,411
------------ ------------ ------------ ------------ ------------ ------------
Net transportation revenue 8,648,946 - 8,648,946 18,858,071 - 18,858,071
Net transportation margin 21.3% 25.0% 22.6% 25.8%
Customs brokerage 2,204,007 - 2,204,007 3,952,252 - 3,952,252
Warehousing and other
value added services 1,143,123 - 1,143,123 2,391,063 - 2,391,063
------------ ------------ ------------ ------------ ------------ ------------
Total net revenue $ 11,996,076 $ - $ 11,996,076 $ 25,201,386 $ - $ 25,201,386
============ ============ ============ ============ ============ ============
Net income $ 1,991,482 $ - $ 1,991,482 $ 1,032,792 $ - $ 1,032,792
============ ============ ============ ============ ============ ============
EBITDA $ 2,715,318 $ - $ 2,715,318 $ 2,633,180 $ - $ 2,633,180
============ ============ ============ ============ ============ ============
Three Months Ended December 31, 2002 Year Ended December 31, 2002
--------------------------------------------- -----------------------------------------------
As Previously As Previously
Reported Adjustment As Restated Reported Adjustment As Restated
------------- ------------ ------------ ------------- ------------ ------------
Total revenue $ 50,034,046 $ (6,772,987) $ 43,261,059 $139,649,219 $(16,945,363) $122,703,856
Cost of transportation 36,925,237 (6,772,987) 30,152,250 101,339,024 (16,945,363) 84,393,661
------------ ------------ ------------ ------------ ------------ ------------
Net revenue $ 13,108,809 $ - $ 13,108,809 $ 38,310,195 $ - $ 38,310,195
============ ============ ============ ============ ============ ============
Transportation revenue $ 47,099,960 $ (6,772,987) $ 40,326,973 $130,371,818 $(16,945,363) $113,426,455
Cost of transportation 36,925,237 (6,772,987) 30,152,250 101,339,024 (16,945,363) 84,393,661
------------ ------------ ------------ ------------ ------------ ------------
Net transportation revenue 10,174,723 - 10,174,723 29,032,794 - 29,032,794
Net transportation margin 21.6% 25.2% 22.3% 25.6%
Customs brokerage 2,337,253 - 2,337,253 6,289,505 - 6,289,505
Warehousing and other
value added services 596,833 - 596,833 2,987,896 - 2,987,896
------------ ------------ ------------ ------------ ------------ ------------
Total net revenue $ 13,108,809 $ - $ 13,108,809 $ 38,310,195 $ - $ 38,310,195
============ ============ ============ ============ ============ ============
Net income $ 1,347,537 $ - $ 1,347,537 $ 2,380,329 $ - $ 2,380,329
============ ============ ============ ============ ============ ============
EBITDA $ 1,945,297 $ - $ 1,945,297 $ 4,578,477 $ - $ 4,578,477
============ ============ ============ ============ ============ ============
FY 2003 Three Months Ended March 31, 2003
---------------------------------------------
As Previously
Reported Adjustment As Restated
------------- ------------ ------------
Total revenue $ 45,365,204 $ (6,783,941) $ 38,581,263
Cost of transportation 33,181,564 (6,783,941) 26,397,623
------------ ------------ ------------
Net revenue $ 12,183,640 $ - $ 12,183,640
============ ============ ============
Transportation revenue $ 42,573,538 $ (6,783,941) $ 35,789,597
Cost of transportation 33,181,564 (6,783,941) 26,397,623
------------ ------------ ------------
Net transportation revenue 9,391,974 - 9,391,974
Net transportation margin 22.1% 26.2%
Customs brokerage 1,863,591 - 1,863,591
Warehousing and other
value added services 928,075 - 928,075
------------ ------------ ------------
Total net revenue $ 12,183,640 $ - $ 12,183,640
============ ============ ============
Net loss $ (7,305) - $ (7,305)
============ ============ ============
EBITDA $ 623,041 $ - $ 623,041
============ ============ ============
Three Months Ended June 30, 2003 Six Months Ended June 30, 2003
--------------------------------------------- -----------------------------------------------
As Previously As Previously
Reported Adjustment As Restated Reported Adjustment As Restated
------------ ------------ ------------ ------------- ------------ ------------
Total revenue $ 54,407,172 $ (7,963,637) $ 46,443,535 $ 99,772,376 $(14,747,578) $ 85,024,798
Cost of transportation 40,302,074 (7,963,637) 32,338,437 73,483,638 (14,747,578) 58,736,060
------------ ------------ ------------ ------------ ------------ ------------
Net revenue $ 14,105,098 $ - $ 14,105,098 $ 26,288,738 - $ 26,288,738
============ ============ ============ ============ ============ ============
Transportation revenue $ 50,655,146 $ (7,963,637) $ 42,691,509 $ 93,228,684 $(14,747,578) $ 78,481,106
Cost of transportation 40,302,074 (7,963,637) 32,338,437 73,483,638 (14,747,578) 58,736,060
------------ ------------ ------------ ------------ ------------ ------------
Net transportation revenue 10,353,072 - 10,353,072 19,745,046 - 19,745,046
Net transportation margin 20.4% 24.3% 21.2% 25.2%
Customs brokerage 2,178,492 - 2,178,492 4,042,083 - 4,042,083
Warehousing and other
value added services 1,573,534 - 1,573,534 2,501,609 - 2,501,609
------------ ------------ ------------ ------------ ------------ ------------
Total net revenue $ 14,105,098 $ - $ 14,105,098 $ 26,288,738 $ - $ 26,288,738
============ ============ ============ ============ ============ ============
Net income $ 129,443 $ - $ 129,443 $ 122,138 $ - $ 122,138
============ ============ ============ ============ ============ ============
EBITDA $ 719,676 $ - $ 719,676 $ 1,342,717 $ - $ 1,342,717
============ ============ ============ ============ ============ ============
Three Months Ended September 30, 2003 Nine Months Ended September 30, 2003
--------------------------------------------- -----------------------------------------------
As Previously As Previously
Reported Adjustment As Restated Reported Adjustment As Restated
------------- ------------ ------------ ------------- ------------ ------------
Total revenue $ 77,343,013 $(12,089,997) $ 65,253,016 $177,115,389 $(26,837,575) $150,277,814
Cost of transportation 58,686,895 (12,089,997) 46,596,898 132,170,533 (26,837,575) 105,332,958
------------ ------------ ------------ ------------ ------------ ------------
Net revenue $ 18,656,118 $ - $ 18,656,118 $ 44,944,856 $ - $ 44,944,856
============ ============ ============ ============ ============ ============
Transportation revenue $ 72,072,997 $(12,089,997) $ 59,983,000 $165,301,681 $(26,837,575) $138,464,106
Cost of transportation 58,686,895 (12,089,997) 46,596,898 132,170,533 (26,837,575) 105,332,958
------------ ------------ ------------ ------------ ------------ ------------
Net transportation revenue 13,386,102 - 13,386,102 33,131,148 - 33,131,148
Net transportation margin 18.6% 22.3% 20.0% 23.9%
Customs brokerage 3,252,198 - 3,252,198 7,294,281 - 7,294,281
Warehousing and other
value added services 2,017,818 - 2,017,818 4,519,427 - 4,519,427
------------ ------------ ------------ ------------ ------------ ------------
Total net revenue $ 18,656,118 $ - $ 18,656,118 $ 44,944,856 $ - $ 44,944,856
============ ============ ============ ============ ============ ============
Net income $ 2,075,103 $ - $ 2,075,103 $ 2,197,241 $ - $ 2,197,241
============ ============ ============ ============ ============ ============
EBITDA $ 3,078,754 $ - $ 3,078,754 $ 4,421,471 $ - $ 4,421,471
============ ============ ============ ============ ============ ============
The information in this report, being furnished pursuant to Item 9 and
Item 12 of Form 8-K, shall not be deemed filed for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
subject to the liabilities of that Section, and is not incorporated by reference
in any filing under the Securities Act of 1933, as amended, or the Exchange Act,
except as expressly set forth by specific reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STONEPATH GROUP, INC.
Date: December 29, 2003 By: /s/ Dennis L. Pelino
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Name: Dennis L. Pelino
Title: Chairman and Chief Executive Officer
Exhibit Index
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Exhibit Number Description
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99.1 Press Release dated December 29, 2003