XPO Logistics, Inc. - FORM 8-K - EX-99.2 - EXHIBIT 99.2

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8-K - FORM 8-K - XPO Logistics, Inc.	d443697d8k.htm
EX-99.1 - EXHIBIT 99.1 - XPO Logistics, Inc.	d443697dex991.htm

Management Presentation

November 2012

Exhibit 99.2

Disclaimer

This presentation contains, and XPO Logistics, Inc. (the “Company”) may from time to time make, written or oral “forward-looking

statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange

Act of 1934, as amended. All statements, other than statements of historical facts, made in this presentation that address activities,

events or developments that the Company expects or anticipates will or may occur in the future, including such things as future capital

expenditures (including the amount and nature thereof), finding suitable merger or acquisition candidates, expansion and growth of the

Company’s business and operations and other such matters, are forward-looking statements. These statements are based on certain

assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and

expected future developments as well as other factors it believes are appropriate in the circumstances. In some cases, forward-looking

statements can be identified by the use of forward-looking terms such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,”

“believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other comparable terms. Investors are

cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and

uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Factors that could

adversely affect actual results and performance include, among others, economic conditions generally; competition; the Company’s

ability to find suitable acquisition candidates and execute its acquisition strategy; the Company’s ability to raise capital; the Company’s

ability to attract and retain key employees to execute its growth strategy; the Company’s ability to develop and implement a suitable

information technology system; the Company’s ability to maintain positive relationships with its network of third-party transportation

providers; litigation; and governmental regulation. Additional factors that could cause actual results to differ materially from those

projected in the forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended

December 31, 2011, and in the Company’s other filings with the Securities and Exchange Commission (the “SEC”). This presentation

should be read in conjunction with the Company’s filings with the SEC, which are available to the public over the Internet at

www.sec.gov and the Company’s website www.xpologistics.com. All forward-looking statements made in this presentation speak only

as of the date of this presentation. All forward-looking statements made in this presentation are qualified by these cautionary statements

and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if

substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The

Company assumes no obligation to update any such forward-looking statements.

The XPO Growth Strategy

Build a multi-billion dollar, non-asset based, third party

logistics business

Primary focus on truck brokerage

Execute selective acquisitions and cold-starts

Scale up operations company-wide

Apply best practices with highly skilled management team

Disciplined focus on creating shareholder value

Founded and led four highly successful companies

Amerex Oil Associates:

Built one of world’s largest oil brokerage firms

Hamilton Resources:

Grew global oil trading company to ~$1 billion

United Waste:

Created fifth largest solid waste business in North America

United Rentals:

Built world’s largest equipment rental company

United Waste stock outperformed S&P 500 by 5.6x from 1992 to 1997

United Rentals stock outperformed S&P 500 by 2.2x from 1997 to 2007

CEO Bradley S. Jacobs

A Large Market Opportunity

Sources: American Trucking Association, Armstrong & Associates, EVE Partners LLC

Worldwide logistics:

>$3 trillion

U.S. logistics:

>$1 trillion

U.S. trucking:

~$350 billion

U.S. truck brokerage

~$50 billion

Long-term outsourcing trend

Brokers add efficiency to both shippers and carriers

–

Shippers gain access to thousands of carriers

–

Carriers gain access to millions of loads

85% of shipments are not presently handled by brokers

$300 billion untapped opportunity

Sources: American Trucking Association, Armstrong & Associates

15% penetration is likely to increase

Truck Brokerage Growing at 2x to 3x GDP

More than 10,000 licensed brokers in the U.S.

Only about 25 brokers with more than $200 million in revenue

Large potential acquisition universe

Lack of working capital can motivate sellers

Brokerage Is a Highly Fragmented Market

Sources: Armstrong & Associates

Capitalize on attractive acquisition universe

–

Focus primarily on truck brokers

Rapidly scale acquired companies

–

Provide access to centralized carrier capacity in Charlotte

–

Move onto technology platform

–

Aggressively expand sales force

Benefit from added carriers, customers and lane histories with

each acquisition

Acquisition and Optimization Strategy

28-year-old business, acquired in October 2012

Operations in Gainesville (Georgia), Reno, Chicago and Dallas

$124 million in annual brokerage revenue

Highly scalable

–

Talented management team

–

Well-positioned geographically for hiring salespeople

–

Strong customer and carrier relationships

–

Attractive end markets

Acquired Turbo Logistics

20-year-old business, acquired in August 2012

Highly scalable operations in Toronto, Montreal, Vancouver

and Cleveland

$100 million in annual brokerage revenue

Strong base of over 1,000 customers

Significant synergies with XPO

Acquired Kelron Logistics

32-year-old business, acquired in May 2012

Operations in South Carolina, North Carolina, Texas and Florida

$22 million in annual brokerage revenue

Highly scalable; plan to triple in size

Completed integration in 90 days

Acquired Continental Freight Services

Truck brokerage cold-start plan ahead of schedule

–

Q4 2011: Phoenix

–

Q2 2012: Ann Arbor and Dallas

–

Q3 2012: Chicago, Jacksonville, Montgomery and

Tri-State (Morris County, NJ)

–

Q4 2012: Charlotte

Led by industry veterans with strong track records

Open additional locations over the next several years

South Bend operation –

good example of cold-start opportunity

Cold-starts Are High Return Opportunities

Provides carrier procurement and shared services

Expand carrier procurement team to 100 people by December

Cover freight more efficiently

Enable sales offices to focus on new business

National Operations Center in Charlotte

Differentiate XPO through superior technology

Purchase transportation more efficiently as data pool grows

Rolled out first phase of platform in March 2012

Added pricing tools in July 2012

Currently beta testing enhanced pricing and truck-finding tools

Scalable Technology Platform

Source: Company data

Highly Skilled Management Team

Partial list below

NCR, Avery Dennison, Arrow Electronics

AutoNation, Skadden Arps

Oakleaf Waste Management

Echo Global Logistics

Union Pacific, Odyssey Logistics

United Rentals, United Waste

Compass Group

Goldman Sachs, UBS, JPMorgan Chase

C.H. Robinson, Knight Brokerage

Stifel Nicolaus, Alex. Brown

C.H. Robinson, American Backhaulers

Sean Fernandez

Chief Operating Officer

Gordon Devens

General Counsel

Mario Harik

Chief Information Officer

David Rowe

Chief Technology Officer

Lou Amo

VP, Carrier Procurement

Troy Cooper

SVP, Finance

John Tuomala

VP, Talent Management

Scott Malat

Chief Strategy Officer

Greg Ritter

SVP, Brokerage Operations

John Hardig

Chief Financial Officer

Marie Fields

Director of Training

The full management team can be found on www.xpologistics.com

Freight

Forwarding

Optimize Existing Operations

Non-asset based

premium freight

brokerage services

Truck

Brokerage

Expedited

Transportation

Non-asset based

expedited service

provider through

Express-1, Inc.

Non-asset based ground,

air and ocean freight

forwarding service

through Concert Group

Logistics, Inc.

Top 5 provider of domestic expedite

Grow business in attractive sectors

–

Cross-border Mexico

–

Temperature-controlled

–

Defense

Opened new hub in Birmingham in August 2012

–

Positioned for shift in manufacturing to the southeast

Synergies with Turbo Division

Expedited Transportation

Source: Company data

Currently a $65 million player in a $150 billion market

Significant opportunity to grow market share

Added locations in Los Angeles, Houston, Kansas City,

Charlotte, Atlanta and Newark in 2012

–

Currently 28 locations

Plan to build footprint to 35 locations over two years

Freight Forwarding

Source: Company data

Financial Overview

2011 revenue: $177 million

Approaching a $500 million annual revenue run rate

Approximately $265 million cash as of October 31, 2012

Marketing new accounts receivable facility

Key Financial Statistics

Equity ownership aligns management team with shareholders

Management

and

directors

own

54%

the

company

(1)

Incentivized Management

Common Stock Equivalent Capitalization (as of 9/30/12)

Common Shares

17.9 million

Preferred Shares

10.7 million

Warrants (Strike Price $7 per share)

10.7 million (5.5 million dilutive)

(2)

Convertible senior notes

8.7 million shares

(3)

Stock options and RSUs

0.6 million shares dilutive

(4)

Fully Diluted Shares Outstanding

43.4 million shares

(1)

Based on SEC beneficial ownership calculation

(2)

Dilutive effect of warrants calculated using treasury method (avg. market close price of $14.43 for Q3 2012); total warrant proceeds of $75 million

(3)

Assumes conversion in full of $143.75 million in aggregate principal amount of convertible senior notes issued in September and October 2012

(4)

Dilutive effect of Q3 2012 weighted average outstanding RSUs and stock options calculated using treasury method (avg. market close price of $14.43 for Q3 2012)

Conclusion

Large, growing, fragmented industry

Significant potential for value creation through cold-starts

Strong pipeline of acquisition targets

Resources to scale up acquired and existing operations

Highly experienced management team aligned with

shareholder interests

Summary of Opportunities

Attached files

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