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As a non-asset based transportation company AutoInfo provides
brokerage, warehousing and distribution services for their fleet of agents around the
country, who service clients in every industry, from small companies to Fortune 100
companies
AutoInfo
Transportation Services
(AUTO-OTC: BB)
AutoInfo, Inc.
6413 Congress Avenue – Suite 260
Boca Raton, FL 33487
Phone: 561-988-9456
William I. Wunderlich
Chief Financial Officer
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
December 29, 2005
BIO:
William Wunderlich, CFO/Executive Vice President,
Mr. Wunderlich, joined us in October 1992 as our vice president - finance, became chief
financial officer in January 1993, president in January 1999 and, in conjunction with the
acquisition of Sunteck, became executive vice president in December 2000. From 1990 to
1992, he served as vice president of Goldstein Affiliates, Inc., a public adjusting
company. From 1981 to 1990, he served as executive vice president, chief financial officer
and a director of Novo Corporation, a manufacturer of consumer products. Mr. Wunderlich is
a Certified Public Accountant with a B.A. degree in Accounting and Economics from the City
University of New York at Queens College.
Company Profile:
AutoInfo, Inc., operating through its Sunteck subsidiary, is a non-asset based
transportation services company, providing transportation capacity and related
transportation services to shippers throughout the United States, and to a lesser extent, Canada.
Our non-asset based services include ground transportation coast to coast, local pick up
and delivery, air freight and ocean freight. We have strategic alliances with less
than truckload, truckload, air, rail and ocean common carriers to service our customers’
needs quickly and effectively.
CEOCFO: Mr. Wunderlich, please describe AutoInfo and your
target market?
Mr. Wunderlich: “AutoInfo is a non-asset based
transportation company that provides brokerage, warehousing and distribution services for
our fleet of agents around the country, who service clients in every industry, from small
companies to Fortune 100 companies.”
CEOCFO: Are you essentially a middleman?
Mr. Wunderlich: “We have two divisions in the company;
in one division we are transportation brokers where in fact our agents act as middlemen
for their clients and arrange transportation on independent carriers. We also have a
contract carrier division where we have approximately 100 owner operators, who own their
own trucks. They operate under our operating-licensing authority. We provide these owner
operators with freight everyday, so in this division we are the trucking company.”
CEOCFO: Please tell us how your business works?
Mr. Wunderlich: “Our agents develop relationships with
and provide services to their customers for their transportation needs. In many cases, a
small percentage of an individual company’s needs and other cases a larger
percentage. Using a large Fortune 100 company as an example, they might have their own
transportation fleet that move a large percentage of their goods on their own trucks. They
will utilize brokers to handle overflow volume, certain lanes of traffic where they do not
have assets available or certain critical freight that needs to move within a certain time
frame. No company can provide internally 100% of their transportation needs.”
CEOCFO: Do the agents work directly for you?
Mr. Wunderlich: “Our agents work directly for us, most
of them on an exclusive basis and we provide a back-office operation for them. This
involves handling all of their paperwork, all licensing and insurance needs, paying the
bills and collecting accounts receivable. They earn a commission based upon the spread
between what the billing rate is to the customer and what is paid to the independent
carrier.”
CEOCFO: Is this typical of the industry?
Mr. Wunderlich: “It is a hybrid; some companies hire and
train agents as employees while others operate through independent agents. We have chosen
to go the route of independent agents who are motivated by our commission based
compensation structure. We can keep our costs variable and our agents benefit directly
from their efforts and results.”
CEOCFO: What is the competitive landscape for you; what are
your agents up against in people using your services?
Mr. Wunderlich: “The largest challenge is finding
available equipment. There is no shortage of freight to be moved, but obviously, there is
always competition. There is no shortage for freight and there is room for everybody to
make a reasonable gross margin. The difficult part is finding available equipment in the
time frames and the traffic lanes that are needed.”
CEOCFO: What do you know at AutoInfo and Sunteck
Transportation that allows you to do that successfully?
Mr. Wunderlich: “Because we have chosen to operate using
sales agents, we have attracted people who have years of experience in the industry and an
established client base, along with relationships with contract carriers and independent
carriers to be able to mover their clients freight. Therefore, it is really the quality of
the people that we’ve attracted to the company and provide them with the proper
tools, both technology wise as well as financially, to be able to operate and move their
clients freight efficiently.”
CEOCFO: Is most of this done on a project-by-project basis or
are there long-term contracts; does it make a difference?
Mr. Wunderlich: “It doesn’t make a difference, but
we have very few long term contracts with customers. Most of it is relationship based and
on a move-by-move basis.”
CEOCFO: Is there a geographic concentration for you now and
if so, would you like to see that change?
Mr. Wunderlich: “No! We have agents all over the
country. Geographically, the population dictates to a certain degree, where freight is
moved, so there is a certain concentration on the East Coast and on the North East, but we
operate all over the country.”
CEOCFO: You certainly had a good quarter with revenue growth;
what accounts for your success and how do you sustain it?
Mr. Wunderlich: “We are constantly attracting new sales
agents to the company, as well as encouraging our existing sales agents to expand their
operations and increase the penetration into their markets. This year we’ve seen
growth from new agents that have joined the company as well as growth of our existing
sales agent base, which is very encouraging. This is the first year that we’ve seen
that type of growth which is a direct result of the quality of the people that we are
bringing into the company. They are motivated to grow their individual office
operation and we provide them with capital and financial support to do that.”
CEOCFO: How do find your sales agents?
Mr. Wunderlich: “We have a full time recruiter, who
contacts potential sales agents. There are thousands of them around the country and it is
a process for the most part of making contact. We stay in touch with a potential new
agent, not necessarily offering a better deal than the deal that he may have with the
current broker, but that we are there, we are financially strong and we are aggressively
looking to expand our operation. In time, many of these agents join us. As we have grown
and have more penetration into the marketplace, with more sales agents operating, the name
of our operating company, which is Sunteck Transport, has become better known within the
industry and we find that we now have people contacting us as well as through our own
recruiting efforts. The majority of our growth of new agents comes from our recruiting
efforts. Through our existing sales agents base, we get recommendations and are put in
touch with other possible new agents.”
CEOCFO: You mentioned financial strength in the company;
could you give us an idea of the financial picture?
Mr. Wunderlich: “As we’ve grown we’ve been
profitable from operations; we have a relationship with Wachovia Bank for a line of
credit. We have a $2½ million line of credit. We have not borrowed anywhere near the
maximum on our line and could increase the line substantially, by several million, if it
became necessary to finance growth at anytime, whether it be internal or through
acquisition. Therefore, we have plenty of capital available at a reasonable interest rate,
to finance our working capital needs and growth.”
CEOCFO: How much of a factor is the price of fuel?
Mr. Wunderlich: “For us it is almost entirely a pass
along. Certainly, with recent developments in the fuel market, as a result of the
hurricanes, but even before that, adding a fuel surcharge has become a standard industry
accepted cost. When we get a quote of what a move will cost from a carrier, including any
fuel surcharge, we include it in our charge to the customer. So for us, it is a pass
through and doesn’t have any effect on the bottom line.”
CEOCFO: Where does the security and tracking of shipments fit
in for you?
Mr. Wunderlich: “Certainly, these last several years
security has become more of a concern. As communications have improved, we know where all
of our trucks and drivers are every day. With our agents using independent carriers, most
of them are rather sophisticated as well and you do your best to stay in touch with your
carriers and track the movement of freight. We haven’t had any situations where we’ve
had a security problem.”
CEOCFO: What are your main opportunities ahead and your
strategies to make them happen?
Mr. Wunderlich: “Our main opportunities are two fold; we
continue to expand our agent base and encourage growth of our existing agents. We are
always looking for strategic acquisitions. We have not made any up until now, but as we’ve
grown the opportunity to look at acquisitions has increased. There are opportunities out
there, through both areas of expanding the agent base as well as looking for strategic
acquisitions and we intend to do both.”
CEOCFO: Is reaching potential investors a focus for you?
Mr. Wunderlich: “It has not been, up until now. We’ve
focused primarily on building the company. As we continue to grow, we expect to increase
our investor relations activities and look to the public marketplace to finance our
growth.”
CEOCFO: In closing, please address potential investors; why
should they be interested and what do people miss about AutoInfo?
Mr. Wunderlich: “We’ve been under the radar screen
and haven’t aggressively gone after new investors. We haven’t needed capital
and, because of our size, people are somewhat unaware of us. Our track record speaks for
itself; we’ve had five years of straight-up growth at a rather exceptional rate. It
is probably unrealistic to expect to be able to continue to growth at 30 to 50% a year,
but we’ve proven that we can successfully build an agent network, that we can attract
agents to join our company and that our model has worked and continues to work. As our
growth has expanded our penetration into different markets, we are less reliant upon any
individual agents, any individual customers or any individual industries. Therefore, we
have a broad base of revenue streams that we expect to be able to continue.”
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