Tomorrow will be CRGO >>> (BSNS WIRE) Cargo Connection Logistics Holdings, Inc. Chairman Issues Shareho
der Message
Cargo Connection Logistics Holdings, Inc. Chairman Issues Shareholder Message
Business Editors
INWOOD, N.Y.--(BUSINESS WIRE)--Aug. 22, 2005--
To the Shareholders of Cargo Connections Logistics Holding, Inc.
(OTCBB:CRGO)
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 http://www.cargocon.com.
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward-looking statements. Certain of the
statements contained herein, which are not historical facts, are
forward-looking statements with respect to events, the occurrence of
which involve risks and uncertainties. These forward-looking
statements may be impacted, either positively or negatively, by
various factors. Information concerning potential factors that could
affect the Company is detailed from time to time in the Company's
reports filed with the Securities and Exchange Commission.
KEYWORD: NORTH AMERICA NEW YORK UNITED STATES
INDUSTRY KEYWORD: TRANSPORT MARITIME TRUCKING
SOURCE: Cargo Connection Logistics Holding, Inc.
CONTACT INFORMATION:
For Cargo Connection Logistics Holding, Inc., Inwood
Peter Nasca Associates, Inc.
Peter Nasca, 305-937-1711
pnasca@pnapr.com
*** end of story ***
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