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

Attached files

file	filename
8-K - FORM 8-K - XPO Logistics, Inc.	d631166d8k.htm
EX-99.2 - EXHIBIT 99.2 - XPO Logistics, Inc.	d631166dex992.htm
EX-99.3 - EXHIBIT 99.3 - XPO Logistics, Inc.	d631166dex993.htm

Management Presentation

November 2013

Exhibit 99.1

Disclaimer

This presentation 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, without limitation, our

outlook with respect to annual revenue and fourth quarter EBITDA for 2013 and our targets for annual revenue and

EBITDA for 2017. 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 our filings with the SEC and the following: economic conditions

generally; competition; our ability to find suitable acquisition candidates and execute our acquisition strategy; the

expected impact of our acquisitions, including the expected impact on our results of operations; our ability to raise debt

and equity capital; our ability to attract and retain key employees to execute our growth strategy; litigation, including

litigation related to misclassification of independent contractors; our ability to develop and implement a suitable

information technology system; our ability to maintain positive relationships with our network of third-party transportation

providers; our ability to retain our and acquired companies’ largest customers; our ability to successfully integrate

acquired businesses; and governmental regulation. All forward-looking statements set forth in this presentation are

qualified by these cautionary statements and there can be no assurance that the actual results or developments

anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or

effects on us or our business or operations. Forward-looking statements set forth in this presentation speak only as of

the date hereof and we do not undertake any 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.

Clearly Defined Strategy for Value Creation

Significantly scale up and optimize existing operations

Acquire companies that bring value and are highly scalable

Open cold-starts where sales recruitment can drive revenue

We’re on track or ahead of plan with every leg of our

strategy to achieve $5 billion of revenue in 2017

Completed nine strategic acquisitions and opened

20 cold-starts in two years

Created leading edge recruiting and training programs

Introduced scalable IT platform

Established national operations centers in Atlanta, Charlotte

and Chicago

Raised $543 million in common stock and convertible debt

offerings, and entered into a $125 million ABL facility

Stratified customers, assigned a single point of contact to each

Disciplined focus on operational excellence

Precise Execution of Growth Plan

One of the Fastest Growing 3PLs

Broad and expanding service offering in North America

4th largest truck brokerage firm

–

Up from 17th largest in 2012, unranked in 2011

Top 5 ground expediter, with integrated air charter capabilities

#1 heavy goods, white glove provider of last-mile logistics

International and domestic freight forwarder

Growing presence in LTL and intermodal

Relentless focus on world-class customer service

U.S. logistics is more than $1 trillion annual spend

Over-the-road trucking is $350 billion

Penetration rate estimated at 15% (approximately $50 billion)

–

85% of shipments are not presently handled by brokers

Brokers add efficiency to both shippers and carriers

–

Shippers gain access to thousands of carriers, carriers gain

access to millions of loads

–

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

Strong Industry Fundamentals

Sources: American Trucking Association, Armstrong & Associates

Highly fragmented: more than 10,000 licensed brokers in the U.S.

Massive Commitment to Shipper Satisfaction

Over 2,100 employees at 90 locations in the U.S. and Canada

9,500 customers in the manufacturing, industrial, retail, food and

beverage, commercial, life sciences and government sectors

Over 23,000 active, vetted carriers, and approximately 400 trucks

under exclusive contract

Constantly investing in growing capacity, technology, sales staff,

procurement staff and training

Our broad footprint provides customers with local support across

North America

Built integrated network across North America in two years

We Excel at Managing Scale and Change

We currently facilitate over 18,500 deliveries a day with an

intense focus on on-time pickup and delivery, and safety

We serve some of the most demanding shipper needs in

North America, including expedite and white glove last-mile

We’ve grown by almost $1 billion in the last two years and

successfully integrated numerous operations

In two years, we’ve hired, recruited and integrated 90% of our

total workforce –

over 1,900 employees, including many with

decades of industry experience

Rapidly grow sales force with aggressive recruiting and

training

Expand branches capable of mega-growth

–

Charlotte, North Carolina

–

Chicago, Illinois

–

Gainesville, Georgia

–

Salt Lake City, Utah

Drive operational efficiency through shared services

Strategy Part 1: Scale and Optimization

Accelerate Sales and Marketing

Differentiate XPO by providing world-class customer service

Single point of contact for each customer

–

Strategic accounts team marketing to largest 1,200 shippers

–

National accounts team focused on next largest 5,000

companies

–

Branch network expands our reach to hundreds of thousands

of small and medium-sized shippers

Capitalize on significant less-than-truckload (LTL) opportunity

Cross-sell all services to new and existing customers

One common platform for freight brokerage rolled out in all

acquired companies

Purchase transportation more efficiently as data pool grows

Proprietary freight optimizer tools for pricing and load-covering

put in place in 2012

Enhancements delivered to date include carrier rating engine

and LTL upgrades, and new customer and carrier portals

Scalable Technology Platform

Increasing Productivity through Technology

Highly scalable load execution and tendering via automated

load-to-carrier matching

Dynamic load optimization on a transactional basis between

full truckload, less-than-truckload, partials and intermodal

Ability to automatically cover, execute and tender loads in a

short timeframe

Customer-specific business rules to manage carrier routing

and assignment, and operational execution

Enhanced TMS Services

Our operating system can customize customer-specific tariffs

and routing guides

We can integrate an ERP system, warehouse management

system or supply chain management system with XPO

via electronic data interchange or web services

Large customers can leverage our technology, buying power,

automated load execution platform, freight audit and bill pay

services through the customer portal

Carriers can be monitored with detailed scorecards

Acquire attractive, highly scalable companies

Gain capabilities, customers, carriers, lane and pricing histories

with each acquisition

Continue to grow carrier network, currently at over 23,000

Nine acquisitions to date have added capabilities in LTL,

last-mile, refrigerated and air charter

3PD, Turbo, Kelron and Covered brought strong relationships

with Fortune 500 customers

Optima expands 3PD’s last-mile capabilities and technology

Strategy Part 2: Acquisitions

Acquired November 13, 2013

TTM revenue of $35.7 million, as of October 31, 2013

Leading U.S. provider of last-mile logistics services for large

appliances and electronics

Highly scalable supplier to XPO’s 3PD business

Benefits from strong trend toward outsourcing last-mile logistics

of heavy goods

Proprietary technology for seamless order entry, scheduling and

tracking of the last-mile process

Acquisition of Optima Service Solutions

Hire strong industry veterans as branch presidents

Position in prime recruitment areas

Rapidly scale up by adding salespeople

Low capital investment can deliver outsized returns

Opened 20 cold-starts to date

–

9 in freight brokerage, 10 in freight forwarding,

one in expedited

–

Brokerage cold-starts on a combined annual revenue run

rate of over $120 million

Strategy Part 3: Cold-starts

Founded and led four highly successful companies,

including world-class public corporations

Amerex Oil Associates:

Hamilton Resources:

United Waste:

United Rentals:

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

Built one of world’s largest oil brokerage firms

Grew global oil trading company to ~$1 billion

Created 5th largest solid waste business in North America

Built world’s largest equipment rental company

Highly Skilled Management Team

Partial list

NCR, Avery Dennison, Arrow Electronics

AutoNation, Skadden Arps

3PD, Inc., Home Depot

Oakleaf Waste Management

Electrolux, Union Pacific, Odyssey Logistics

Echo Global Logistics

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

Lou Amo

VP, Carrier Procurement

Dave Rowe

Chief Technology Officer

Scott Malat

Chief Strategy Officer

Greg Ritter

SVP, Strategic Accounts

John Hardig

Chief Financial Officer

Marie Fields

Director of Training

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

United Rentals, United Waste

Troy Cooper

SVP, Operations

Karl Meyer

CEO, 3PD division

Deep Bench of Industry Experience Selected examples

C.H. Robinson

Crowley Maritime, Coyote Logistics

England Logistics, Freightquote

C.H. Robinson

AFN, CEVA Logistics

Ryder Supply Chain Solutions, BAX Global

OHL, Schneider National

Livingston International, Echo Global Logistics

Jake Schnell

Sr. Operational Process and Integration Manager

Kip Douglass

Regional Vice President

Joe Stevens

Branch President, Houston

Patrick Maguire

Branch President, Montgomery

Brandon Arnold

Carrier Procurement and Operations Manager

Drew Wilkerson

Branch President, Charlotte

Evan Laskaris

Director of Operations

Greg Tallant

National Account Manager

Jenna Sargent

Regional Sales and Operation Manager

Andrew Armstrong

Sales and Operations Manager

AFN, Ryder Integrated Logistics

Doug George

Branch President, Dallas

2011 revenue of $177 million

Currently at approximately $950 million annual revenue run rate

42% YOY organic revenue growth company-wide in Q3

–

Freight brokerage organic growth –

up 146.1%

Q3 2013 total revenue: $194.0 million

(1)

–

up 173.3% YOY

–

Freight brokerage: $152.6 million –

up 374.4%

–

Expedited transportation: $25.1 million –

up 5.7%

–

Freight forwarding: $19.1 million –

up 10.5%

Key Financial Statistics

(1)

Net of intercompany eliminations

Source: Company data

2013 outlook

–

EBITDA-positive in Q4

–

$1 billion annual revenue run rate by December 31

2017 targets

–

$300 million of EBITDA

–

$5 billion of revenue

(1)

Financial Goalposts

(1)

Includes $1.5 to $2.0 billion of acquired revenue

Source: Company data

Incentivized XPO Management

Equity ownership aligns management team with shareholders

Management

and

directors

own

approx.

41%

the

company

(1)

Based on SEC beneficial ownership calculation as of September 30, 2013

(2)

Dilutive effect of warrants calculated using treasury method (avg. market close price of $22.31 for Q3 2013); 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)

As of September 30, 2013, dilutive effect of Q3 2013 weighted average outstanding RSUs and stock options calculated using treasury method

(avg. market close price of $22.31 for Q3 2013)

Common Stock Equivalent Capitalization as of 9/30/13

Common Shares

29.9 million

Preferred Shares

10.6 million

Warrants (Strike Price $7 per share)

10.7 million

(7.3

million

dilutive)

(2)

Convertible Senior Notes

8.7

million

(3)

Stock Options and RSUs

1.3

million

dilutive

(4)

Fully Diluted Shares Outstanding

57.9 million shares

Large, growing, fragmented logistics industry

Well-defined process to scale up operations

Robust acquisition pipeline

Strong organic growth, including cold-starts

Highly skilled management team incentivized to create

shareholder value

Passionate, world-class culture of customer service

Clear Path for Significant Value Creation

Attached files

XPO Logistics, Inc. Reports

Also read