Air and ocean freight forwarder Pacific CMA had a net loss of $198,407 in the second quarter on revenue that increased 29 percent year-over-year to $37.4 million.
The increase in revenue primarily was the result of the organic growth through subsidiaries AGI, Shenzhen Careship, Airgate and Paradigm, and the inclusion of the results of WCL after its acquisition in July 2005, said Pacific CMA.
In the second quarter a year ago, the company earned a net income of $240,138. The company said the decrease in net income was mainly due to a 26 percent increase in G & A expenses to support the Company's rapid growth, 31 percent higher forwarding costs and accretion of the Company's Series A preferred stock net to redemption value.
The same factors were at work during the first quarter. So for the first six months of 2006, the company had a net loss of $976,911, compared with net income in the 2005 period of $224,211.
During the first six months of the year, PAM increased air freight volume by 29 percent and sea freight operations by 16 percent. Chairman and CEO Alfred Lam attributed the added business to positive industry trends. "While businesses are increasingly outsourcing freight forwarding to save money and stay focused on their own core competencies," said Lam, "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."
"Although we had considerable cost increases in the first six months as a result of organic growth and the acquisition of WCL," said Pacific CMA's President, Scott Turner, "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."