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8-K - 8-K - XPO Logistics, Inc.d719134d8k.htm
EX-99.3 - EX-99.3 - XPO Logistics, Inc.d719134dex993.htm
EX-99.2 - EX-99.2 - XPO Logistics, Inc.d719134dex992.htm

Exhibit 99.1

 

LOGO

XPO Logistics Announces First Quarter 2014 Results

Reports 51% organic growth company-wide

Raises estimate for cost synergies from Pacer integration to $15 million

Opens freight brokerage cold-start in Kansas City

Reaffirms full year 2014 guidance

GREENWICH, Conn. — May 1, 2014 — XPO Logistics, Inc. (NYSE: XPO) today announced financial results for the first quarter of 2014. Total gross revenue increased 147.7% year-over-year to $282.4 million. Net revenue increased 259.1% to $58.4 million.1

The company reported a net loss of $28.1 million for the quarter, compared with a net loss of $14.5 million for the same period in 2013. The net loss available to common shareholders was $28.9 million, or a loss of $0.70 per diluted share, compared with a net loss of $15.3 million, or a loss of $0.85 per diluted share, for the same period in 2013. The company’s first quarter 2014 results reflect: $10.8 million, or $7.5 million after-tax, of transaction and integration costs related to the acquisition of Pacer International, Inc.; $4.5 million, or $3.7 million after-tax, for a commitment fee related to an undrawn debt funding option for the Pacer transaction; and $2.3 million, before-tax and after-tax, related to conversions of the company’s convertible senior notes.

Earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”), a non-GAAP financial measure, was a loss of $10.1 million for the quarter, compared with a loss of $9.8 million for the same period in 2013. EBITDA for the first quarter reflects $1.4 million and $1.1 million of non-cash share-based compensation for 2014 and 2013, respectively. Excluding $10.8 million of transaction and integration costs related to the Pacer acquisition, adjusted EBITDA for the first quarter of 2014 was $678,000. Reconciliations of EBITDA and adjusted EBITDA to net income are provided in the attached financial tables.

The company had approximately $157 million of cash, including $13 million of restricted cash, as of March 31, 2014, immediately following its acquisition of Pacer.

Reaffirms Full Year Financial Targets

The company reaffirmed its full year 2014 targets for an annual revenue run rate of at least $2.75 billion and an annual EBITDA run rate of at least $100 million by December 31. The company expects to acquire at least $400 million of historical annual revenue in 2014, excluding the Pacer acquisition.

 

1  Effective 2014, the company began reporting Net Revenue and Net Revenue Margin instead of the equivalent Gross Margin and Gross Margin Percentage to conform the presentation of operating expenses with its acquired intermodal operations. Refer to the attached financial tables for further information.


CEO Comments

Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, “In the first quarter, we increased our revenue to $282 million – significantly more than expected – including notable year-over-year organic growth of 51%. Our 11 brokerage cold-starts, including our newest branch in Kansas City, are on a combined revenue run rate of $190 million, nearly triple the rate of 12 months ago. Our employee productivity metrics are on the rise, and our strategic accounts team signed 33 new major accounts in the quarter.

“Our expedited business, which benefited from weather-related supply chain disruptions, increased first quarter profitability fivefold from a year ago. This included the impact of our online portal XPO NLM, which we purchased in December: XPO NLM managed over 130,000 expedited loads in the first quarter, a 47% increase in volume from a year ago. We increased freight forwarding revenue by more than 20% year-over-year, and improved our brokerage margin by 90 basis points, excluding the benefit of last-mile margin. We capped the quarter with our purchase of Pacer International on March 31.

“The integration of Pacer is going extremely well. We’ve already unified our sales force, and we have many large intermodal bids in the pipeline. We moved the former Pacer truck brokerage operation onto our proprietary Freight Optimizer technology, giving them access to our network of over 26,000 carriers. And we’ve made great progress at right-sizing costs in technology, real estate, sales and administrative functions. We acted quickly to reverse the losses in Pacer’s logistics business by closing 10 underperforming locations and consolidating six duplicative offices in the U.S., Asia and Europe. The remaining locations have become part of our XPO Global Logistics freight forwarding network. We now expect to capture about $15 million of cost synergies – three times our original estimate – while expanding services to our customers.”

Jacobs continued, “Excluding the costs associated with the acquisition of Pacer, this was our second straight quarter of positive EBITDA. We’re on track to meet our target run rate of $100 million of EBITDA by year-end 2014, and approximately $425 million of EBITDA in 2017 on revenue of $7.5 billion.”

First Quarter 2014 Results by Business Unit

 

    Freight brokerage: The company’s freight brokerage business generated total gross revenue of $231.7 million for the quarter, a 196.2% increase from the same period in 2013. Net revenue margin1 was 19.1%, compared with 12.9% in 2013, an improvement of 620 basis points. The year-over-year increases in revenue and margin for the quarter were primarily due to the acquisition of high-margin last-mile logistics providers 3PD and Optima Service Solutions in 2013, 75% organic revenue growth, and continued margin improvement. Excluding the benefit of last-mile margin, freight brokerage net revenue margin improved 90 basis points, compared with 2013. The increase in net revenue was offset by higher intangible asset amortization related to acquisitions, and by the company’s strategic investments in sales and procurement personnel over the trailing 12 months. First quarter operating income was a loss of $4.0 million, compared with a loss of $3.8 million a year ago.

 

   

Expedited transportation: The company’s expedited transportation business generated total gross revenue of $33.8 million for the quarter, a 41.6% increase from the same period in 2013. Net revenue margin was 33.6%, compared with 15.9% in 2013, an improvement of 1,770 basis points. The year-over-year increase in net revenue margin primarily reflects


 

the acquisition of managed transportation expeditor NLM, which generated $6.4 million of gross revenue and net revenue in the first quarter. Excluding NLM, expedited net revenue margin improved, driven largely by higher revenue per mile. First quarter operating income was $3.7 million, compared with $753,000 a year ago, primarily reflecting the positive impact of NLM and significant organic margin improvement.

 

    Freight forwarding: The company’s freight forwarding business generated total gross revenue of $19.5 million for the quarter, a 20.2% increase from the same period in 2013. Net revenue margin was 13.9%, compared with 14.7% in 2013. The decrease in net revenue margin was primarily due to an increase in international shipments, which typically generate higher revenue, but at a lower margin, than domestic shipments. First quarter operating income was $552,000, a 48.4% increase year-over-year.

 

    Corporate: Corporate SG&A expense for the first quarter of 2014 was $21.7 million, compared with $8.7 million for the first quarter of 2013. Corporate SG&A includes: $6.4 million, or $5.3 million after-tax, of integration charges related to the acquisition of Pacer; $4.6 million, or $4.1 million after-tax, of acquisition-related transaction costs primarily related to Pacer; and $1.2 million, or $1.0 million after-tax, of litigation costs.

Raises Estimate for Cost Synergies from Pacer Integration to $15 Million

The company increased its target for cost synergies related to the integration of Pacer International, Inc., acquired March 31, 2014. The company now expects to realize approximately $15 million of synergies.

Opens Freight Brokerage Cold-start in Kansas City

On March 31, 2014, the company opened a cold-start location in Kansas City, Mo., as part of a planned organic expansion of its freight brokerage footprint. The branch is the company’s eleventh freight brokerage cold-start.

Conference Call

The company will hold a conference call on Friday, May 2, 2014, at 8:30 a.m. Eastern Time. Participants can call toll-free (from U.S./Canada) 1-800-708-4539; international callers dial +1-847-619-6396. A live webcast of the conference will be available on the investor relations area of the company’s website, www.xpologistics.com/investors. The conference will be archived until June 1, 2014. To access the replay by phone, call toll-free (from U.S./Canada) 1-888-843-7419; international callers dial +1-630-652-3042. Use participant passcode 37094021.

About XPO Logistics, Inc.

XPO Logistics, Inc. (NYSE: XPO) is one of the fastest growing providers of transportation logistics services in North America: the fourth largest freight brokerage firm, the third largest provider of intermodal services, the largest provider of last-mile logistics for heavy goods, and the largest manager of expedited shipments, with growing positions in managed transportation, global freight forwarding and less-than-truckload brokerage. The company facilitates more than 25,000 deliveries a day throughout the U.S., Mexico and Canada.

XPO Logistics has 123 locations and approximately 3,000 employees. Its three business segments – freight brokerage, expedited transportation and freight forwarding – utilize


relationships with ground, rail, sea and air carriers to serve over 14,000 customers in the manufacturing, industrial, retail, commercial, life sciences and government sectors. The company has more than 1,000 owner-operator trucks under contract to its drayage and expedited subsidiaries, and has access to additional capacity through its relationships with over 26,000 other carriers. For more information: www.xpologistics.com

Explanatory Note Regarding Impact of Pacer Acquisition

The company acquired Pacer International, Inc. on March 31, 2014. Accordingly, the company’s financial statements for the first quarter of 2014 do not include any results of operations for Pacer. However, the balance sheet for Pacer is reflected in the company’s consolidated balance sheets as of March 31.

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures as defined under Securities and Exchange Commission (“SEC”) rules, such as earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”) and adjusted EBITDA for the quarters ended March 31, 2014 and 2013. As required by SEC rules, we provide reconciliations of these measures to the most directly comparable measure under United States generally accepted accounting principles (“GAAP”), which are set forth in the attachments to this release. We believe that EBITDA and adjusted EBITDA improve comparability from period to period by removing the impact of our capital structure (interest expense from our outstanding debt), asset base (depreciation and amortization) and tax consequences, and, in the case of adjusted EBITDA, non-recurring costs related to the Pacer acquisition. In addition to its use by management, we believe that EBITDA and adjusted EBITDA are measures widely used by securities analysts, investors and others to evaluate the financial performance of companies in our industry. Other companies may calculate EBITDA and adjusted EBITDA differently, and therefore our measures may not be comparable to similarly titled measures of other companies. EBITDA and adjusted EBITDA are not measures of financial performance or liquidity under GAAP and should not be considered in isolation or as an alternative to net income, cash flows from operating activities and other measures determined in accordance with GAAP. Items excluded from EBITDA and adjusted EBITDA are significant and necessary components of the operations of our business, and, therefore, EBITDA and adjusted EBITDA should only be used as supplemental measures of our operating performance.

Forward-looking Statements

This press release includes 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, including the company’s full year 2014 and full year 2017 financial targets and expected cost synergies from the Pacer integration. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances.


These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include, but are not limited to, those discussed in XPO’s filings with the SEC and the following: economic conditions generally; competition; XPO’s ability to find suitable acquisition candidates and execute its acquisition strategy; the expected impact of acquisitions, including the expected impact on XPO’s results of operations; XPO’s ability to raise debt and equity capital; XPO’s ability to attract and retain key employees to execute its growth strategy; litigation, including litigation related to alleged misclassification of independent contractors; the ability to develop and implement a suitable information technology system; the ability to maintain positive relationships with XPO’s networks of third-party transportation providers; the ability to retain XPO’s and acquired businesses’ largest customers; XPO’s ability to successfully integrate acquired businesses and realize anticipated synergies and cost savings; rail and other network changes; weather and other service disruptions; and governmental regulation. All forward-looking statements set forth in this press release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, XPO or its businesses or operations. Forward-looking statements set forth in this document speak only as of the date hereof, and XPO undertakes no obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events except to the extent required by law.

Investor Contact:

XPO Logistics, Inc.

Tavio Headley, +1-203-930-1602

tavio.headley@xpologistics.com

Media Contacts:

Brunswick Group

Gemma Hart, Darren McDermott, +1-212-333-3810


XPO Logistics, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share data)

 

     Three Months Ended
March 31,
 
     2014     2013  

Revenue

   $ 282,403      $ 113,999   

Operating expenses

    

Cost of purchased transportation and services

     224,006        97,739   

Direct operating expense

     3,880        —     

Sales, general and administrative expense

     75,878        27,627   
  

 

 

   

 

 

 

Total operating expenses

     303,764        125,366   
  

 

 

   

 

 

 

Operating loss

     (21,361     (11,367
  

 

 

   

 

 

 

Other expense (income)

     15        (109

Interest expense

     10,058        3,064   
  

 

 

   

 

 

 

Loss before income tax provision

     (31,434     (14,322

Income tax (benefit) provision

     (3,299     222   
  

 

 

   

 

 

 

Net loss

     (28,135     (14,544

Cumulative preferred dividends

     (742     (743
  

 

 

   

 

 

 

Net loss available to common shareholders

   $ (28,877   $ (15,287
  

 

 

   

 

 

 

Basic loss per share

    

Net loss

   $ (0.70   $ (0.85

Diluted loss per share

    

Net loss

   $ (0.70   $ (0.85

Weighted average common shares outstanding

    

Basic weighted average common shares outstanding

     41,313        18,032   

Diluted weighted average common shares outstanding

     41,313        18,032   


XPO Logistics, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

 

     March 31,
2014
    December 31,
2013
 
     (Unaudited)        
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 143,886      $ 21,524   

Accounts receivable, net of allowances of $5,066 and $3,539, respectively

     342,752        134,227   

Prepaid expenses

     8,515        3,935   

Deferred tax asset, current

     6,182        3,041   

Other current assets

     10,869        7,304   
  

 

 

   

 

 

 

Total current assets

     512,204        170,031   
  

 

 

   

 

 

 

Property and equipment, net of $15,658 and $11,803 in accumulated depreciation, respectively

     98,819        56,571   

Goodwill

     539,168        363,448   

Identifiable intangible assets, net of $22,722 and $15,411 in accumulated amortization, respectively

     250,203        185,179   

Deferred tax asset, long-term

     511        72   

Restricted cash

     13,332        2,141   

Other long-term assets

     9,518        2,799   
  

 

 

   

 

 

 

Total long-term assets

     911,551        610,210   
  

 

 

   

 

 

 

Total assets

   $ 1,423,755      $ 780,241   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Current liabilities:

    

Accounts payable

   $ 227,738      $ 71,391   

Accrued salaries and wages

     19,257        11,741   

Accrued expenses, other

     45,947        9,489   

Current maturities of long-term debt

     1,777        2,028   

Other current liabilities

     6,486        4,684   
  

 

 

   

 

 

 

Total current liabilities

     301,205        99,333   
  

 

 

   

 

 

 

Convertible senior notes

     99,844        106,268   

Revolving credit facility and other long-term debt, net of current maturities

     470        75,373   

Deferred tax liability, long-term

     24,793        15,200   

Other long-term liabilities

     32,663        28,224   
  

 

 

   

 

 

 

Total long-term liabilities

     157,770        225,065   
  

 

 

   

 

 

 

Commitments and contingencies

    

Stockholders’ equity:

    

Preferred stock, $.001 par value; 10,000,000 shares; 73,335 and 74,175 shares issued and outstanding, respectively

     42,258        42,737   

Common stock, $.001 par value; 150,000,000 shares authorized; 52,570,800 and 30,583,073 shares issued, respectively; and 52,525,800 and 30,538,073 shares outstanding, respectively

     53        30   

Additional paid-in capital

     1,063,242        524,972   

Treasury stock, at cost, 45,000 shares held

     (107     (107

Accumulated deficit

     (140,666     (111,789
  

 

 

   

 

 

 

Total stockholders’ equity

     964,780        455,843   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 1,423,755      $ 780,241   
  

 

 

   

 

 

 


XPO Logistics, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

     Three Months Ended
March 31,
 
     2014     2013  

Operating activities

    

Net loss

   $ (28,135   $ (14,544

Adjustments to reconcile net loss to net cash from operating activities

    

Provisions for allowance for doubtful accounts

     2,196        231   

Depreciation and amortization

     11,273        1,554   

Stock compensation expense

     2,206        1,097   

Accretion of debt

     1,430        1,438   

Other

     2,062        (211

Changes in assets and liabilities, net of effects of acquisitions:

    

Accounts receivable

     (56,414     (9,771

Deferred tax expense

     (4,529     135   

Income tax payable

     2,298        (814

Prepaid expense and other current assets

     114        (62

Other long-term assets

     (96     (2

Accounts payable

     48,676        (3,417

Accrued expenses and other liabilities

     10,177        (3,659
  

 

 

   

 

 

 

Cash flows used by operating activities

     (8,742     (28,025
  

 

 

   

 

 

 

Investing activities

    

Acquisition of businesses, net of cash acquired

     (190,962     (16,560

Payment for purchases of property and equipment

     (3,935     (1,081

Other

     246        125   
  

 

 

   

 

 

 

Cash flows used by investing activities

     (194,651     (17,516
  

 

 

   

 

 

 

Financing activities

    

Repayment of borrowings on revolving debt facility

     (75,000     —     

Proceeds from stock offering, net

     413,183        —     

Payment for cash held as collateral in lending arrangement

     (11,269     —     

Dividends paid to preferred stockholders

     (742     (743

Other

     (417     173   
  

 

 

   

 

 

 

Cash flows provided (used) by financing activities

     325,755        (570
  

 

 

   

 

 

 

Net increase (decrease) in cash

     122,362        (46,111

Cash and cash equivalents, beginning of period

     21,524        252,293   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 143,886      $ 206,182   
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information:

    

Cash paid for interest

   $ 4,287      $ 3,328   

Cash (received) paid for income taxes

   $ (1,507   $ 732   

Equity portion of acquisition purchase price

   $ 108,815      $ 2,573   


Freight Brokerage

Summary Financial Table

(Unaudited)

(In thousands)

 

     Three Months Ended March 31,  
     2014     2013     $ Variance     Change %  

Revenue

   $ 231,689      $ 78,230      $ 153,459        196.2

Cost of purchased transportation and services

     187,372        68,164        119,208        174.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenue

     44,317        10,066        34,251        340.3
  

 

 

   

 

 

   

 

 

   

 

 

 

Direct operating expense

     3,880        —          3,880        100.0

SG&A expense

        

Salaries & benefits

     25,526        10,163        15,363        151.2

Other SG&A expense

     7,841        1,895        5,946        313.8

Purchased services

     2,072        814        1,258        154.5

Depreciation & amortization

     8,993        1,014        7,979        786.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Total SG&A expense

     44,432        13,886        30,546        220.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

   $ (3,995   $ (3,820   $ (175     4.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Freight Brokerage

Key Data

(In thousands, except personnel data)

 

     3 Mos Ended
March 31,
2014
    3 Mos Ended
March 31,
2013
 

Revenue

    

Truckload, LTL, and Intermodal

   $ 144,585      $ 78,230   

Last Mile

     87,104        —     
  

 

 

   

 

 

 

Total Revenue

   $ 231,689      $ 78,230   
  

 

 

   

 

 

 

Net Revenue

    

Truckload, LTL, and Intermodal

   $ 19,921      $ 10,066   

Last Mile

     24,396        —     
  

 

 

   

 

 

 

Total Net Revenue

   $ 44,317      $ 10,066   
  

 

 

   

 

 

 

Net Revenue %

    

Truckload, LTL, and Intermodal

     13.8     12.9

Last Mile

     28.0     —     
  

 

 

   

 

 

 

Overall Net Revenue %

     19.1     12.9
  

 

 

   

 

 

 

Freight Brokerage personnel (end of period)

     2,331        668   

Note: Employee totals are as of period end, and primarily include the positions of shipper sales, carrier procurement and brokerage operations, and reflect the impact of recruitment and acquisitions.


Expedited Transportation

Summary Financial Table

(Unaudited)

(In thousands)

 

     Three Months Ended March 31,  
     2014      2013      $ Variance      Change %  

Revenue

   $ 33,810       $ 23,875       $ 9,935         41.6

Cost of purchased transportation and services

     22,442         20,067         2,375         11.8
  

 

 

    

 

 

    

 

 

    

 

 

 

Net revenue

     11,368         3,808         7,560         198.5
  

 

 

    

 

 

    

 

 

    

 

 

 

SG&A expense

           

Salaries & benefits

     4,154         1,945         2,209         113.6

Other SG&A expense

     1,456         604         852         141.1

Purchased services

     434         289         145         50.2

Depreciation & amortization

     1,578         217         1,361         627.2
  

 

 

    

 

 

    

 

 

    

 

 

 

Total SG&A expense

     7,622         3,055         4,567         149.5
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

   $ 3,746       $ 753       $ 2,993         397.5
  

 

 

    

 

 

    

 

 

    

 

 

 

Note: Total depreciation and amortization for the Expedited Transportation reportable segment included in both direct expense and SG&A, was $1,612,000 and $268,000 for the three-months ended March 31, 2014 and 2013, respectively.

Freight Forwarding

Summary Financial Table

(Unaudited)

(In thousands)

 

     Three Months Ended March 31,  
     2014      2013      $ Variance     Change %  

Revenue

   $ 19,506       $ 16,233       $ 3,273        20.2

Cost of purchased transportation and services

     16,793         13,847         2,946        21.3
  

 

 

    

 

 

    

 

 

   

 

 

 

Net revenue

     2,713         2,386         327        13.7
  

 

 

    

 

 

    

 

 

   

 

 

 

SG&A expense

          

Salaries & benefits

     1,635         1,433         202        14.1

Other SG&A expense

     349         403         (54     -13.4

Purchased services

     77         90         (13     -14.4

Depreciation & amortization

     100         88         12        13.6
  

 

 

    

 

 

    

 

 

   

 

 

 

Total SG&A expense

     2,161         2,014         147        7.3
  

 

 

    

 

 

    

 

 

   

 

 

 

Operating income

   $ 552       $ 372       $ 180        48.4
  

 

 

    

 

 

    

 

 

   

 

 

 


XPO Corporate

Summary of Sales, General & Administrative Expense

(Unaudited)

(In thousands)

 

     Three Months Ended March 31,  
     2014      2013      $ Variance      Change %  

SG&A expense

           

Salaries & benefits

   $ 9,844       $ 4,507       $ 5,337         118.4

Other SG&A expense

     3,620         1,359         2,261         166.4

Purchased services

     7,632         2,622         5,010         191.1

Depreciation & amortization

     568         184         384         208.7
  

 

 

    

 

 

    

 

 

    

 

 

 

Total SG&A expense

   $ 21,664       $ 8,672       $ 12,992         149.8
  

 

 

    

 

 

    

 

 

    

 

 

 

Note: Intercompany eliminations included revenue of $2.6 million and $4.3 million for the three-months ended March 31, 2014 and 2013, respectively.

Reconciliation of Non-GAAP Measures

XPO Logistics, Inc.

Consolidated Reconciliation of EBITDA to Net Loss

(In thousands)

 

    

Three Months Ended

March 31,

 
     2014     2013     Change %  

Net loss available to common shareholders

   $ (28,877   $ (15,287     88.9

Preferred dividends

     (742     (743     -0.1
  

 

 

   

 

 

   

 

 

 

Net loss

     (28,135     (14,544     93.4
  

 

 

   

 

 

   

 

 

 

Interest expense

     10,058        3,064        228.3

Income tax benefit

     (3,299     222        -1586.0

Depreciation and amortization

     11,273        1,502        650.5
  

 

 

   

 

 

   

 

 

 

EBITDA

   $ (10,103   $ (9,756     3.6
  

 

 

   

 

 

   

 

 

 

Pacer transaction and restructuring costs

     (10,781     —          100.0
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 678      $ (9,756     -106.9
  

 

 

   

 

 

   

 

 

 

Note: Please refer to the “Non-GAAP Financial Measures” section of the press release.


XPO Logistics, Inc.

Consolidated Calculation of Diluted Weighted Shares Outstanding

 

     Three Months Ended  
     March 31, 2014      March 31, 2013  

Basic common stock outstanding

     41,312,894         18,031,926   
  

 

 

    

 

 

 

Potentially Dilutive Securities:

     

Shares underlying the conversion of preferred stock to common stock

     10,503,286         10,610,714   

Shares underlying the conversion of the convertible senior notes

     7,741,643         8,749,239   

Shares underlying warrants to purchase common stock

     8,004,967         6,342,298   

Shares underlying stock options to purchase common stock

     529,385         550,611   

Shares underlying restricted stock units

     565,825         414,088   
  

 

 

    

 

 

 
     27,345,106         26,666,950   
  

 

 

    

 

 

 
     
  

 

 

    

 

 

 

Diluted weighted shares outstanding

     68,658,000         44,698,876   
  

 

 

    

 

 

 

Note: For dilution purposes, GAAP requires diluted shares to be reflected on a weighted average basis, which takes into account the portion of the period in which the diluted shares were outstanding. The table above reflects the weighted average diluted shares for the periods presented. The impact of this dilution was not reflected in the earnings per share calculations on the Condensed Consolidated Statements of Operations because the impact was anti-dilutive. The treasury method was used to determine the shares underlying the warrants to purchase common stock with an average closing market price of common stock of $28.85 per share and $17.15 per share for the three months ended March 31, 2014 and 2013, respectively.


For informational purposes, the following table represents fully diluted shares as of March 31, 2014, calculated on a non-weighted basis without giving effect to the portion of any period in which the diluted shares were outstanding. The dilutive effect of the warrants, options and RSUs in the table was calculated using the closing market price of common stock on March 31, 2014. A non-weighted basis for calculating fully diluted shares is a non-GAAP financial measure as defined under SEC rules.

XPO Logistics, Inc.

 

     Diluted Shares as of
March 31, 2014
 

Common stock outstanding

     52,525,800   

Preferred stock

     10,476,430   

Convertible senior notes

     7,341,643   

Warrants

     8,053,888   

Outstanding stock options

     648,459   

Restricted stock units

     1,577,972   
  

 

 

 

Total

     80,624,192   
  

 

 

 

XPO Logistics, Inc.

Prior Period Results Conformed to 2014 Presentation

Consolidated Statements of Operations

(In thousands)

 

AS REPORTED    For the     For the     For the  
     Year Ended     Three Months Ended     Year Ended  
     December 31,
2011
     December 31,
2012
    March 31,
2013
    June 30,
2013
    September 30,
2013
    December 31,
2013
    December 31,
2013
 

Revenue

   $ 177,076       $ 278,591      $ 113,999      $ 137,091      $ 193,982      $ 257,231      $ 702,303   

Direct expense

               

Transportation services

     133,007         224,035        94,880        114,924        156,446        201,555        567,805   

Station commissions

     11,098         9,321        1,708        1,992        1,706        1,762        7,168   

Other direct expense

     3,193         4,409        1,151        835        995        842        3,823   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct expense

     147,298         237,765        97,739        117,751        159,147        204,159        578,796   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin

     29,778         40,826        16,260        19,340        34,835        53,072        123,507   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

SG&A expense

               

Salaries & benefits

     16,338         39,278        18,048        20,491        27,065        35,029        100,633   

Other SG&A expense

     3,937         11,616        4,262        5,198        9,521        10,377        29,358   

Purchased services

     6,733         15,388        3,815        5,914        8,311        7,174        25,214   

Depreciation and amortization

     1,046         2,508        1,502        1,752        8,357        9,016        20,627   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total SG&A expense

     28,054         68,790        27,627        33,355        53,254        61,596        175,832   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

   $ 1,724       $ (27,964   $ (11,367   $ (14,015   $ (18,419   $ (8,524   $ (52,325
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

AS CONFORMED    For the     For the     For the  
     Year Ended     Three Months Ended     Year Ended  
     December 31,
2011
     December 31,
2012
    March 31,
2013
    June 30,
2013
    September 30,
2013
    December 31,
2013
    December 31,
2013
 

Revenue

   $ 177,076       $ 278,591      $ 113,999      $ 137,091      $ 193,982      $ 257,231      $ 702,303   

Cost of purchased transportation and services

     147,298         237,765        97,739        117,751        159,147        204,159        578,796   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenue

     29,778         40,826        16,260        19,340        34,835        53,072        123,507   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Direct operating expense

     0         0        0        0        2,077        4,278        6,355   

SG&A expense

               

Salaries & benefits

     16,338         39,278        18,048        20,491        26,948        34,799        100,286   

Other SG&A expense

     3,937         11,616        4,262        5,198        8,067        7,762        25,289   

Purchased services

     6,733         15,388        3,815        5,914        7,805        5,741        23,275   

Depreciation and amortization

     1,046         2,508        1,502        1,752        8,357        9,016        20,627   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total SG&A expense

     28,054         68,790        27,627        33,355        51,177        57,318        169,477   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

   $ 1,724       $ (27,964   $ (11,367   $ (14,015   $ (18,419   $ (8,524   $ (52,325
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


XPO Logistics, Inc.

Prior Period Results Conformed to 2014 Presentation

Freight Brokerage

Statement of Operations Data

(in thousands)

 

AS REPORTED    For the     For the      For the  
     Year Ended     Three Months Ended      Year Ended  
     December 31,
2011
     December 31,
2012
    March 31,
2013
    June 30,
2013
    September 30,
2013
    December 31,
2013
     December 31,
2013
 

Revenue

   $ 29,186       $ 125,121      $ 78,230      $ 95,360      $ 152,616      $ 215,183       $ 541,389   

Direct expense

                

Transportation services

     24,434         108,507        67,957        82,705        124,804        169,253         444,719   

Other direct expense

     55         489        207        88        162        118         575   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total direct expense

     24,489         108,996        68,164        82,793        124,966        169,371         445,294   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Gross margin

     4,697         16,125        10,066        12,567        27,650        45,812         96,095   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

SG&A expense

                

Salaries & benefits

     2,484         15,171        10,163        12,367        17,559        24,784         64,873   

Other SG&A expense

     716         3,590        1,895        3,031        6,626        8,637         20,189   

Purchased services

     148         1,695        814        979        2,269        3,501         7,563   

Depreciation and amortization

     44         1,223        1,014        1,180        4,611        8,087         14,892   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total SG&A expense

     3,392         21,679        13,886        17,557        31,065        45,009         107,517   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Operating income (loss)

   $ 1,305       $ (5,554   $ (3,820   $ (4,990   $ (3,415   $ 803       $ (11,422
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

 

AS CONFORMED    For the     For the      For the  
     Year Ended     Three Months Ended      Year Ended  
     December 31,
2011
     December 31,
2012
    March 31,
2013
    June 30,
2013
    September 30,
2013
    December 31,
2013
     December 31,
2013
 

Revenue

   $ 29,186       $ 125,121      $ 78,230      $ 95,360      $ 152,616      $ 215,183       $ 541,389   

Cost of purchased transportation and services

     24,489         108,996        68,164        82,793        124,966        169,371         445,294   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Net revenue

     4,697         16,125        10,066        12,567        27,650        45,812         96,095   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Direct operating expense

     0         0        0        0        2,077        4,278         6,355   

SG&A expense

                

Salaries & benefits

     2,484         15,171        10,163        12,367        17,442        24,554         64,526   

Other SG&A expense

     716         3,590        1,895        3,031        5,172        6,022         16,120   

Purchased services

     148         1,695        814        979        1,763        2,068         5,624   

Depreciation and amortization

     44         1,223        1,014        1,180        4,611        8,087         14,892   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total SG&A expense

     3,392         21,679        13,886        17,557        28,988        40,731         101,162   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Operating income (loss)

   $ 1,305       $ (5,554   $ (3,820   $ (4,990   $ (3,415   $ 803       $ (11,422