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8-K - 8-K - XPO Logistics, Inc.d764726d8k.htm
EX-99.3 - EX-99.3 - XPO Logistics, Inc.d764726dex993.htm
EX-99.2 - EX-99.2 - XPO Logistics, Inc.d764726dex992.htm

Exhibit 99.1

 

LOGO

XPO Logistics Announces Second Quarter 2014 Results

Reports 49% organic growth company-wide

Generates higher-than-expected gross revenue and EBITDA

Raises year-end target run rates to $3 billion of revenue and $150 million of EBITDA

GREENWICH, Conn. — July 29, 2014 — XPO Logistics, Inc. (NYSE: XPO) today announced financial results for the second quarter of 2014. Total gross revenue increased 323.8% year-over-year to $581.0 million, and net revenue increased 530.1% to $121.9 million.

The company reported a net loss of $13.8 million for the quarter, compared with a net loss of $17.4 million for the same period in 2013. The net loss available to common shareholders was $14.5 million, or a loss of $0.28 per diluted share, compared with a net loss of $18.1 million, or a loss of $1.00 per diluted share, for the same period in 2013.

The adjusted net loss available to common shareholders, a non-GAAP measure, was $11.6 million, or a loss of $0.22 per share for the quarter. Adjusted net loss excludes: a primarily non-cash charge of $3.7 million, or $2.3 million after-tax, of accelerated amortization due to the rebranding of the company’s Express-1 business; and $720,000, or $593,000 after-tax, of transaction and integration costs related to the acquisition of Pacer International, Inc. (“Pacer”). Reconciliations of adjusted net loss to common shareholders and adjusted EPS are provided in the attached financial tables.

Adjusted earnings (loss) before interest, taxes, depreciation and amortization (“adjusted EBITDA”), a non-GAAP financial measure, was a gain of $14.1 million for the quarter, compared with a loss of $12.4 million for the same period in 2013. Adjusted EBITDA for 2014 excludes $627,000 of transaction and integration costs related to the acquisition of Pacer and $321,000 of rebranding costs; and includes $1.6 million of non-cash share-based compensation. A reconciliation of adjusted EBITDA to net income is provided in the attached financial table.

The company had approximately $129 million of cash, including $17 million of restricted cash, as of June 30, 2014.

Raises Full Year Financial Targets

The company has raised its full year 2014 financial targets as follows:

 

    An annual revenue run rate of more than $3 billion by December 31, up from a prior target of $2.75 billion; and

 

    An annual EBITDA run rate of at least $150 million by December 31, up from a prior target of $100 million.


Acquisition Announcements

On July 29, 2014, the company announced that it has entered into a definitive agreement to acquire non-asset based logistics company New Breed Holding Company (“New Breed”) in a transaction valued at approximately $615 million. New Breed is the preeminent U.S. provider of industry-defining contract logistics services for omni-channel distribution, reverse logistics, transportation management, freight bill audit and payment, lean manufacturing support, aftermarket support and supply chain optimization. The transaction is expected to close in the third quarter, subject to customary approvals and conditions.

The company further announced that it has completed the acquisition of Atlantic Central Logistics (“ACL”), in a transaction valued at approximately $36.5 million. ACL is a non-asset based, third party provider of last mile logistics with 14 East Coast locations. The full text of the company’s acquisition announcements can be found at www.xpologistics.com/investors.

CEO Comments

Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, “In the second quarter, we outperformed a favorable brokerage environment and delivered strong results across the board. Our gross revenue, volume, net revenue margin and EBITDA all came in significantly ahead of plan. We reported robust organic growth of 49% company-wide, and in our freight brokerage unit, we generated outsized organic growth of 67%. We accomplished this by capitalizing on our increasing scale and lane density, and by improving the productivity of our sales force.”

Jacobs continued, “We’re very bullish about the two acquisitions we announced today. New Breed is the Rolls Royce of contract logistics – the preeminent provider of high margin, technology-intense, engineered solutions for blue chip customers. This will be a transformational addition to our service offering and a major increase in scale. Our XPO network will grow to more than 200 locations and approximately 10,000 employees. We’ll offer the most comprehensive range of logistics services in North America, with world-class technology and expertise.

“ACL is a strategically attractive, 14-location, last mile logistics company that we acquired yesterday. This transaction expands our tier one relationships in the e-commerce space, where the demand for last mile service is skyrocketing. ACL specializes in facilitating the time-sensitive, local movement of e-commerce goods between distribution centers and the end-consumer. We’ll integrate these operations with our XPO Last Mile business and leverage our combined capacity and expertise.”

Jacobs concluded, “We’ve raised our 2014 outlook to reflect our accelerated growth trajectory. We now expect a year-end revenue run rate of more than $3 billion, and an EBITDA run rate of at least $150 million – 50% more EBITDA than our original target.”

Second Quarter 2014 Results by Business Unit

 

   

Freight brokerage: The company’s freight brokerage business generated total gross revenue of $493.4 million for the quarter, a 417.4% increase from the same period in 2013. Net revenue margin was 21.3%, compared with 13.2% in 2013, an improvement of 810 basis points. The year-over-year increases in revenue and margin were primarily due to the acquisitions of 3PD, Optima Service Solutions and Pacer, and 67% organic revenue growth. Organic growth included revenue growth from our cold-starts, which are on an


 

annualized revenue run rate of $220 million, compared with $90 million a year ago. Excluding the margin benefit of our last mile and intermodal operations, freight brokerage net revenue margin improved year-over-year, reflecting a more seasoned sales force and data-rich information technology. Second quarter operating income was a gain of $4.4 million, compared with a loss of $5.0 million a year ago.

 

    Expedited transportation: The company’s expedited transportation business generated total gross revenue of $36.2 million for the quarter, a 37.0% increase from the same period in 2013. Net revenue margin was 30.8%, compared with 15.9% in 2013, an improvement of 1,490 basis points. Our ability to achieve more revenue per mile drove margin higher year-over-year, even excluding the substantial benefit of our XPO NLM business, acquired in December 2013. Second quarter operating income was a loss of $363,000, compared with a gain of $1.2 million a year ago, reflecting a one-time non-cash charge of $3.3 million related to the rebranding of Express-1 to XPO Express. Excluding this charge, second quarter operating income was a gain of $3.0 million.

 

    Freight forwarding: The company’s freight forwarding business generated total gross revenue of $54.2 million for the quarter, a 180.2% increase from the same period in 2013. Net revenue margin was 10.3%, compared with 13.3% in 2013. The decrease in net revenue margin was due in part to the consolidation of the former Pacer freight forwarding operations into the XPO Global Logistics network, which shifted the revenue mix toward higher-revenue, lower-margin international transactions. Operating income was a loss of $903,000, compared with a gain of $478,000 a year ago, due in part to the consolidation of Pacer operations.

 

    Corporate: Corporate SG&A expense for the second quarter of 2014 was $15.1 million, compared with $10.7 million for the second quarter of 2013. The higher corporate SG&A expense includes the allocation of expenses related to Pacer. Corporate SG&A for the second quarter includes: $627,000, or $516,000 after-tax, of integration charges related to the acquisition of Pacer; $1.3 million, or $1.1 million after-tax, of additional acquisition-related transaction costs; and $1.7 million, or $1.4 million after-tax, of litigation costs.

Six Months 2014 Financial Results

For the six months ended June 30, 2014, the company reported total revenue of $863.4 million, a 243.9% increase from the first six months of 2013.

Net loss was $41.9 million for the first six months of 2014, compared with net loss of $31.9 million for the same period last year. The company reported a six-month net loss available to common shareholders of $43.4 million, or a loss of $0.92 per diluted share, compared with a net loss of $33.4 million, or a loss of $1.84 per diluted share, for the same period in 2013.

Adjusted EBITDA was a gain of $14.8 million for the first six months of 2014, compared with a loss of $22.1 million for the same period in 2013. Adjusted EBITDA excludes $11.4 million of transaction and integration costs related to the acquisition of Pacer, and includes $3.8 million and $2.1 million of non-cash share-based compensation for 2014 and 2013, respectively. A reconciliation of adjusted EBITDA to net income is provided in the attached financial table.


Rebrands Expedited Transportation and Last Mile Operations

In June, the company rebranded two of its core businesses to further its market strategy of serving customers as one, integrated portfolio of supply chain services under the XPO brand. The Express-1 expedited transportation business now operates as XPO Express, and the 3PD last mile business now operates as XPO Last Mile. More information about these services can be found at www.xpo-express.com and www.xpolastmile.com, respectively.

Conference Call

The company will hold a conference call on Wednesday, July 30, 2014, at 9:30 a.m. Eastern Time. Participants can call toll-free (from U.S./Canada) 1-800-708-4540; international callers dial +1-847-619-6397. 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 August 29, 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 37627194.

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 31,000 deliveries a day throughout the U.S., Mexico and Canada.

XPO Logistics has 148 locations and approximately 3,100 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 3,600 trucks under contract to its drayage, expedited and last-mile subsidiaries, and has access to additional capacity through its relationships with over 27,000 other carriers. For more information: www.xpologistics.com

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures as defined under Securities and Exchange Commission (“SEC”) rules, such as adjusted net loss available to common shareholders and adjusted EPS, in each case for the quarter ended June 30, 2014, and earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”) and adjusted EBITDA for the quarters ended June 30, 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 adjusted net loss available to common shareholders improves comparability from period to period by removing the impact of nonrecurring expense items related to our rebranding of Express-1 to XPO Express and our acquisition of Pacer, which we completed on March 31, 2014. 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 financial targets. 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 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 the acquisitions of New Breed and ACL, including the expected impact on XPO’s results of operations; the ability to obtain the requisite regulatory approvals and the satisfaction of other conditions to consummation of the New Breed transaction; the ability to realize anticipated synergies and cost savings with respect to acquired companies; XPO’s ability to raise debt and equity capital; XPO’s ability to attract and retain key employees to execute its growth strategy, including New Breed’s and ACL’s management teams; 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 companies’ largest customers; XPO’s ability to successfully integrate New Breed, ACL and other acquired businesses; 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
June 30,
    Six Months Ended
June 30,
 
     2014     2013     2014     2013  

Revenue

   $ 581,009      $ 137,091      $ 863,412      $ 251,090   

Operating expenses

        

Cost of purchased transportation and services

     459,139        117,751        683,145        215,490   

Direct operating expense

     27,212        —          31,092        —     

Sales, general and administrative expense

     106,553        33,355        182,431        60,982   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     592,904        151,106        896,668        276,472   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

     (11,895     (14,015     (33,256     (25,382
  

 

 

   

 

 

   

 

 

   

 

 

 

Other expense

     235        167        250        58   

Interest expense

     3,403        3,106        13,461        6,170   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income tax provision

     (15,533     (17,288     (46,967     (31,610

Income tax (benefit) provision

     (1,771     74        (5,070     296   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (13,762     (17,362     (41,897     (31,906

Cumulative preferred dividends

     (733     (743     (1,475     (1,486
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss available to common shareholders

   $ (14,495   $ (18,105   $ (43,372   $ (33,392
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic loss per share

        

Net loss

   $ (0.28   $ (1.00   $ (0.92   $ (1.84

Diluted loss per share

        

Net loss

   $ (0.28   $ (1.00   $ (0.92   $ (1.84

Weighted average common shares outstanding

        

Basic weighted average common shares outstanding

     52,565        18,180        46,970        18,107   

Diluted weighted average common shares outstanding

     52,565        18,180        46,970        18,107   


XPO Logistics, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

 

     June 30,
2014
    December 31,
2013
 
     (Unaudited)        
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 111,620      $ 21,524   

Accounts receivable, net of allowances of $6,593 and $3,539, respectively

     342,182        134,227   

Prepaid expenses

     12,764        3,935   

Deferred tax asset, current

     6,885        3,041   

Other current assets

     9,965        7,304   
  

 

 

   

 

 

 

Total current assets

     483,416        170,031   
  

 

 

   

 

 

 

Property and equipment, net of $22,634 and $11,803 in accumulated depreciation, respectively

     97,378        56,571   

Goodwill

     540,954        363,448   

Identifiable intangible assets, net of $37,655 and $15,411 in accumulated amortization, respectively

     231,915        185,179   

Deferred tax asset, long-term

     75        72   

Restricted cash

     17,017        2,141   

Other long-term assets

     10,075        2,799   
  

 

 

   

 

 

 

Total long-term assets

     897,414        610,210   
  

 

 

   

 

 

 

Total assets

   $ 1,380,830      $ 780,241   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Current liabilities:

    

Accounts payable

   $ 216,969      $ 71,391   

Accrued salaries and wages

     16,454        11,741   

Accrued expenses, other

     30,947        9,489   

Current maturities of long-term debt

     1,565        2,028   

Other current liabilities

     6,819        4,684   
  

 

 

   

 

 

 

Total current liabilities

     272,754        99,333   
  

 

 

   

 

 

 

Convertible senior notes

     101,074        106,268   

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

     484        75,373   

Deferred tax liability, long-term

     21,658        15,200   

Other long-term liabilities

     34,108        28,224   
  

 

 

   

 

 

 

Total long-term liabilities

     157,324        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; 52,637,017 and 30,583,073 shares issued, respectively; and 52,592,017 and 30,538,073 shares outstanding, respectively

     53        30   

Additional paid-in capital

     1,063,709        524,972   

Treasury stock, at cost, 45,000 shares held

     (107     (107

Accumulated deficit

     (155,161     (111,789
  

 

 

   

 

 

 

Total stockholders’ equity

     950,752        455,843   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 1,380,830      $ 780,241   
  

 

 

   

 

 

 


XPO Logistics, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

     Six Months Ended
June 30,
 
     2014     2013  

Operating activities

    

Net loss

   $ (41,897   $ (31,906

Adjustments to reconcile net loss to net cash from operating activities

    

Provisions for allowance for doubtful accounts

     3,180        627   

Depreciation and amortization

     36,543        3,349   

Stock compensation expense

     3,843        2,147   

Accretion of debt

     2,663        2,916   

Deferred tax expense

     (7,071     167   

Other

     2,335        (130

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

    

Accounts receivable

     (57,334     (24,134

Income tax payable

     2,441        (732

Prepaid expense and other current assets

     (3,551     (275

Other long-term assets

     (7,101     (28

Accounts payable

     37,791        (4,013

Accrued expenses and other liabilities

     1,552        2,939   
  

 

 

   

 

 

 

Cash flows used by operating activities

     (26,606     (49,073
  

 

 

   

 

 

 

Investing activities

    

Acquisition of businesses, net of cash acquired

     (200,999     (19,660

Payment for purchases of property and equipment

     (9,822     (3,864

Other

     265        125   
  

 

 

   

 

 

 

Cash flows used by investing activities

     (210,556     (23,399
  

 

 

   

 

 

 

Financing activities

    

Repayment of borrowings on revolving credit facility

     (75,000     —     

Proceeds from stock offering, net

     413,164        —     

Payment for cash held as collateral in lending arrangement

     (8,503     —     

Dividends paid to preferred stockholders

     (1,475     (1,486

Other

     (928     (180
  

 

 

   

 

 

 

Cash flows provided (used) by financing activities

     327,258        (1,666
  

 

 

   

 

 

 

Net increase (decrease) in cash

     90,096        (74,138

Cash and cash equivalents, beginning of period

     21,524        252,293   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 111,620      $ 178,155   
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information:

    

Cash paid for interest

   $ 4,726      $ 3,337   

Cash (received) paid for income taxes

   $ (291   $ 906   

Equity portion of acquisition purchase price

   $ 108,187      $ 3,089   


Freight Brokerage

Summary Financial Table

(Unaudited)

(In thousands)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2014      2013     $Variance      Change %     2014      2013     $Variance      Change %  

Revenue

   $ 493,390       $ 95,360      $ 398,030         417.4   $ 725,078       $ 173,590      $ 551,488         317.7

Cost of purchased transportation and services

     388,282         82,793        305,489         369.0     575,654         150,957        424,697         281.3
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Net revenue

     105,108         12,567        92,541         736.4     149,424         22,633        126,791         560.2
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Direct operating expense

     27,212         —          27,212         100.0     31,092         —          31,092         100.0

SG&A expense

                    

Salaries & benefits

     38,795         12,367        26,428         213.7     64,321         22,530        41,791         185.5

Other SG&A expense

     11,339         3,031        8,308         274.1     19,180         4,926        14,254         289.4

Purchased services

     4,736         979        3,757         383.8     6,808         1,793        5,015         279.7

Depreciation & amortization

     18,595         1,180        17,415         1475.8     27,589         2,194        25,395         1157.5
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total SG&A expense

     73,465         17,557        55,908         318.4     117,898         31,443        86,455         275.0
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Operating income (loss)

   $ 4,431       $ (4,990   $ 9,421         -188.8   $ 434       $ (8,810   $ 9,244         -104.9
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Note: Total depreciation and amortization for the Freight Brokerage reportable segment included in both direct operating expense and SG&A, was $ 19,271,000 and $1,180,000 for the three-months ended June 30, 2014 and 2013, respectively, and $28,264,000 and $2,194,000 for the six-months ended June 30, 2014 and 2013, respectively.

Freight Brokerage

Key Data

(In thousands, except personnel data)

 

     3 Mos Ended
June 30,
2014
    3 Mos Ended
June 30,
2013
    6 Mos Ended
June 30,
2014
    6 Mos Ended
June 30,
2013
 

Revenue

        

Truckload, LTL, and Intermodal

   $ 387,492      $ 95,360      $ 532,076      $ 173,590   

Last Mile

     105,898        —          193,002        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenue

   $ 493,390      $ 95,360      $ 725,078      $ 173,590   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Revenue

        

Truckload and LTL

   $ 23,894      $ 12,489      $ 43,612      $ 22,582   

Intermodal

     50,149        78        50,351        51   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Truckload, LTL, and Intermodal

     74,043        12,567        93,963        22,633   

Last Mile

     31,065        —          55,461        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Net Revenue

   $ 105,108      $ 12,567      $ 149,424      $ 22,633   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Revenue %

        

Truckload, LTL, and Intermodal

     19.1     13.2     17.7     13.0

Last Mile

     29.3     —          28.7     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Overall Net Revenue %

     21.3     13.2     20.6     13.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Direct Operating Expense

        

Intermodal

   $ 22,872      $ —        $ 22,872      $ —     

Last Mile

     4,340        —          8,220        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Direct Operating Expense

   $ 27,212      $ —        $ 31,092      $ —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Freight Brokerage personnel (end of period)

     2,245        788       

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 June 30,     Six Months Ended June 30,  
     2014     2013      $ Variance     Change %     2014      2013      $ Variance      Change %  

Revenue

   $ 36,231      $ 26,445       $ 9,786        37.0   $ 70,041       $ 50,320       $ 19,721         39.2

Cost of purchased transportation and services

     25,067        22,235         2,832        12.7     47,510         42,302         5,208         12.3
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Net revenue

     11,164        4,210         6,954        165.2     22,531         8,018         14,513         181.0
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

SG&A expense

                    

Salaries & benefits

     4,376        2,016         2,360        117.1     8,530         3,961         4,569         115.3

Other SG&A expense

     1,670        513         1,157        225.5     3,127         1,117         2,010         179.9

Purchased services

     562        246         316        128.5     996         535         461         86.2

Depreciation & amortization

     4,919        248         4,671        1883.5     6,497         465         6,032         1297.2
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total SG&A expense

     11,527        3,023         8,504        281.3     19,150         6,078         13,072         215.1
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Operating (loss) income

     (363     1,187         (1,550     -130.6     3,381         1,940         1,441         74.3
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Accelerated amortization of Express-1 trade name

     3,346        —           3,346        100.0     3,346         —           3,346         100.0
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted operating income (loss)

   $ 2,983      $ 1,187       $ 1,796        151.3   $ 6,727       $ 1,940       $ 4,787         246.8
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Note: Total depreciation and amortization for the Expedited Transportation reportable segment included in both cost of purchased transportation and services and SG&A, was $4,954,000 and $291,000 for the three-months ended June 30, 2014 and 2013, respectively, and $6,566,000 and $559,000 for the six-months ended June 30, 2014 and 2013, respectively.

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

Freight Forwarding

Summary Financial Table

(Unaudited)

(In thousands)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2014     2013      $ Variance     Change %     2014     2013      $ Variance     Change %  

Revenue

   $ 54,178      $ 19,338       $ 34,840        180.2   $ 73,684      $ 35,571       $ 38,113        107.1

Cost of purchased transportation and services

     48,580        16,775         31,805        189.6     65,373        30,622         34,751        113.5
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net revenue

     5,598        2,563         3,035        118.4     8,311        4,949         3,362        67.9
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

SG&A expense

                  

Salaries & benefits

     1,627        1,518         109        7.2     3,262        2,951         311        10.5

Other SG&A expense

     4,130        317         3,813        1202.8     4,478        720         3,758        521.9

Purchased services

     243        157         86        54.8     320        247         73        29.6

Depreciation & amortization

     501        93         408        438.7     601        181         420        232.0
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total SG&A expense

     6,501        2,085         4,416        211.8     8,661        4,099         4,562        111.3
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Operating (loss) income

   $ (903   $ 478       $ (1,381     -288.9   $ (350   $ 850       $ (1,200     -141.2
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

XPO Corporate

Summary of Sales, General & Administrative Expense

(Unaudited)

(In thousands)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2014      2013      $ Variance      Change %     2014      2013      $ Variance      Change %  

SG&A expense

                      

Salaries & benefits

   $ 6,952       $ 4,590       $ 2,362         51.5   $ 16,795       $ 9,097       $ 7,698         84.6

Other SG&A expense

     1,872         1,337         535         40.0     5,492         2,696         2,796         103.7

Purchased services

     5,692         4,532         1,160         25.6     13,322         7,154         6,168         86.2

Depreciation & amortization

     544         231         313         135.5     1,112         415         697         168.0
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total SG&A expense

   $ 15,060       $ 10,690       $ 4,370         40.9   $ 36,721       $ 19,362       $ 17,359         89.7
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Note: Intercompany eliminations included revenue of $2.8 million and $4.1 million for the three-months ended June 30, 2014 and 2013, respectively, and $5.4 million and $8.4 million for the six-months ended June 30, 2014 and 2013, respectively.


Reconciliation of Non-GAAP Measures

XPO Logistics, Inc.

Consolidated Reconciliation of EBITDA to Net Loss

(In thousands)

 

    

Three Months Ended

June 30,

   

Six Months Ended

June 30,

 
     2014     2013     Change %     2014     2013     Change %  

Net loss available to common shareholders

   $ (14,495   $ (18,105     -19.9   $ (43,372   $ (33,392     29.9

Preferred dividends

     (733     (743     -1.3     (1,475     (1,486     -0.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (13,762     (17,362     -20.7     (41,897     (31,906     31.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pacer debt commitment fee(1)

     93        —          100.0     4,624        —          100.0

Other interest expense

     3,310        3,106        6.6     8,837        6,170        43.2

Income tax (benefit) provision

     (1,771     74        -2493.2     (5,070     296        -1812.8

Accelerated amortization of Express-1 trade name

     3,346        —          100.0     3,346        —          100.0

Other depreciation and amortization

     21,924        1,795        1121.4     33,197        3,349        891.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 13,140      $ (12,387     -206.1   $ 3,037      $ (22,091     -113.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pacer transaction and restructuring costs

     627        —          100.0     11,408        —          100.0

XPO Express and XPO Last Mile rebranding costs

     321        —          100.0     321        —          100.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 14,088      $ (12,387     -213.7   $ 14,766      $ (22,091     -166.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)  Pacer debt commitment fee is recorded in interest expense.

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

Reconciliation of Non-GAAP Measures

XPO Logistics, Inc.

Consolidated Reconciliation of GAAP Net Loss and Net Loss Per Share to Adjusted Net Loss and Net Loss Per Share

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2014     2013     2014     2013  

GAAP net loss available to common shareholders

   $ (14,495   $ (18,105   $ (43,372   $ (33,392

Accelerated amortization of Express-1 trade name

     3,346        —          3,346        —     

XPO Express and XPO Last Mile rebranding costs

     321        —          321        —     

Pacer transaction and restructuring costs

     627        —          11,408        —     

Pacer debt commitment fee(1)

     93          4,624     

Adjustment to tax benefit

     (1,460       (3,883  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net loss available to common shareholders

   $ (11,568   $ (18,105   $ (27,556   $ (33,392
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted basic loss per share

        

Adjusted net loss

   $ (0.22   $ (1.00   $ (0.59   $ (1.84

Adjusted diluted loss per share

        

Adjusted net loss

   $ (0.22   $ (1.00   $ (0.59   $ (1.84

Weighted average common shares outstanding

        

Basic weighted average common shares outstanding

     52,565        18,180        46,970        18,107   

Diluted weighted average common shares outstanding

     52,565        18,180        46,970        18,107   

 

(1)  Pacer debt commitment fee is recorded in interest expense.

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      Six Months Ended  
     June 30, 2014      June 30, 2013      June 30, 2014      June 30, 2013  

Basic common stock outstanding

     52,564,636         18,179,570         46,969,847         18,106,564   
  

 

 

    

 

 

    

 

 

    

 

 

 

Potentially Dilutive Securities:

           

Shares underlying the conversion of preferred stock to common stock

     10,476,430         10,610,714         10,489,784         10,610,714   

Shares underlying the conversion of the convertible senior notes

     7,341,524         8,749,239         7,540,478         8,749,239   

Shares underlying warrants to purchase common stock

     7,765,457         6,262,380         7,886,891         6,302,668   

Shares underlying stock options to purchase common stock

     497,716         526,813         513,254         533,977   

Shares underlying restricted stock units

     714,896         436,275         657,583         418,898   
  

 

 

    

 

 

    

 

 

    

 

 

 
     26,796,023         26,585,421         27,087,990         26,615,496   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted weighted shares outstanding

     79,360,659         44,764,991         74,057,837         44,722,060   
  

 

 

    

 

 

    

 

 

    

 

 

 

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 $26.41 per share and $16.85 per share for the three months ended June 30, 2014 and 2013, respectively, and $27.61 per share and $17.00 per share for the six months ended June 30, 2014 and 2013, respectively.