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8-K - 8-K - XPO Logistics, Inc.d680794d8k.htm

Exhibit 99.1

XPO Logistics Announces Fourth Quarter and Full Year 2013 Results

Meets 2013 targets of positive EBITDA for the quarter and $1 billion revenue run rate

Generates significant gross margin percentage improvement in all business units

Provides 2014 outlook and increases targets for 2017

GREENWICH, Conn. — February 24, 2014 — XPO Logistics, Inc. (NYSE: XPO) today announced financial results for the fourth quarter and full year 2013.

For the fourth quarter of 2013, total revenue increased 137.1% year-over-year to $257.2 million. Gross margin dollars increased 238.8% to $53.1 million, and gross margin percentage increased by 620 basis points to 20.6%.

The company reported a net loss of $10.6 million for the quarter, compared with a net loss of $9.3 million for the same period in 2012. The net loss available to common shareholders was $11.3 million, or a loss of $0.37 per diluted share, compared with a net loss of $10.1 million, or a loss of $0.57 per diluted share, for the same period in 2012.

Earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”), a non-GAAP financial measure, improved dramatically year-over-year. EBITDA was a gain of $343,000 for the quarter, compared with a loss of $9.9 million for the same period in 2012. EBITDA for the fourth quarters of 2013 and 2012 reflects $1.4 million and $913,000 of non-cash share-based compensation, respectively. A reconciliation of EBITDA to net income is provided in the attached financial tables.

The company had approximately $358 million of cash as of February 21, 2014.

Provides 2014 Outlook and Updates Long-Term Targets

The company provided the following financial targets for 2014:

 

    An annual revenue run rate of at least $2.75 billion by December 31;

 

    An annual EBITDA run rate of at least $100 million by December 31; and

 

    At least $400 million of acquired historical annual revenue, excluding the Pacer International acquisition.

The company updated its financial targets for the full year 2017:

 

    Revenue of approximately $7.5 billion; and

 

    EBITDA of approximately $425 million.

CEO Comments

Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, “For the second straight quarter, we increased our gross margin percentage in every one of our business units. Our freight brokerage operations improved gross margin by 110 basis points year-over-year, excluding the benefit of our last-mile acquisitions. And our expedited transportation and freight forwarding units both generated double-digit growth in profitability. We achieved our company-wide targets of positive EBITDA in the quarter and an annual revenue run rate exceeding $1 billion.


“Our multi-modal service offering is now one of the strongest in the industry, with leading positions in some of the fastest-growing areas of logistics. Our acquisitions of Optima Service Solutions and NLM in the fourth quarter, and our recent agreement to acquire Pacer International, have strengthened our positions in last-mile logistics, expedite and intermodal. In freight brokerage, the largest component of our 2013 revenue, we grew the business into the fourth largest provider in North America through acquisitions, cold-starts and recruitment. Our brokerage cold-starts are now on a combined revenue run rate of over $150 million – more than two and a half times the $60 million run rate of a year ago.”

Jacobs continued, “By year-end, we expect to almost triple our current revenue run rate and attain an EBITDA run rate of at least $100 million. Given the growth embedded in our model, we’re now targeting $7.5 billion in revenue and $425 million in EBITDA for 2017.”

Fourth Quarter 2013 Results by Business Unit

 

    Freight brokerage: The company’s freight brokerage business generated total revenue of $215.2 million for the quarter, a 202.5% increase from the same period in 2012. Gross margin percentage was 21.3% for the quarter, compared with 13.4% for the same period in 2012, an improvement of 790 basis points. Gross margin percentage for freight brokerage has improved year-over-year in five of the last six quarters. The year-over-year increases in revenue and gross margin percentage were primarily driven by the acquisitions of 3PD, Inc. and Optima Service Solutions last-mile operations, which typically generate a higher gross margin percentage than truckload brokerage, as well as prior acquisitions and growth of the company’s brokerage cold-start locations. Excluding last-mile results, freight brokerage gross margin improved 110 basis points versus the same period in 2012. Fourth quarter operating income was $801,000, compared with a loss of $2.5 million a year ago, reflecting the acquisition of 3PD and Optima, partially offset by an increase in SG&A costs for sales force expansion, technology and training.

 

    Expedited transportation: The company’s expedited transportation business generated total revenue of $26.4 million for the quarter, a 19.4% increase from the same period in 2012. Gross margin percentage was 17.5% for the quarter, compared with 16.5% for the same period in 2012, an improvement of 100 basis points. The year-over-year increase in gross margin percentage primarily reflects lower direct expenses, partially offset by the addition of lower-margin expedited air charter revenue from the acquisition of East Coast Air Charter in 2013. Fourth quarter operating income was $1.5 million, compared with $988,000 a year ago, primarily reflecting the increase in gross margin.

 

    Freight forwarding: The company’s freight forwarding business generated total revenue of $18.5 million for the quarter, flat from the same period in 2012. Gross margin percentage was 14.3% for the quarter, an improvement of 80 basis points, compared with 13.5% for the same period in 2012. The increase in gross margin percentage was primarily due to higher revenue from company-owned locations. Fourth quarter operating income was $744,000, compared with $454,000 a year ago.

 

    Corporate: Corporate SG&A expense for the fourth quarter of 2013 was $11.6 million, compared with $10.1 million for the fourth quarter of 2012. Corporate SG&A includes $1.2 million, or $0.8 million after-tax, of acquisition-related costs; and $1.0 million, or $0.6 million after-tax, of litigation costs.

Appoints Chris Healy to Lead Expedited Transportation Unit

Chris Healy has been appointed as president of the company’s four expedited operations: Express-1, XPO NLM, XPO Air Charter and the Gainesville, Ga., expedited office. Healy is a 30-year veteran of the transportation industry with deep experience in expedited services. His career has included senior positions with Active Aero Charter, Boyd Brothers Transportation, Caliber Logistics (now FedEx Supply Chain Services) and Roberts Express (now FedEx Custom Critical).


Opens Freight Forwarding Cold-starts

The company announced the addition of two cold-start locations to its freight forwarding network: Salt Lake City, Utah, opened in December 2013, and Seattle, Wash., opened in February 2014.

Full Year 2013 Operational Highlights

During 2013, the company:

 

    Built XPO into the fourth largest freight brokerage firm, the largest provider of last-mile logistics for heavy goods, and the largest manager of expedited shipments, with a new foothold in managed transportation;

 

    Grew the number of deliveries facilitated per day to more than 20,000;

 

    Opened three freight brokerage cold-starts in Cincinnati, Ohio; Richmond, Va.; and Houston, Texas – the company’s 10 freight brokerage cold-starts are currently on an annual revenue run rate of more than $150 million;

 

    Completed six acquisitions: East Coast Air Charter, Covered Logistics, Interide Logistics, 3PD, Optima Service Solutions and NLM;

 

    Rebranded the freight forwarding business unit as XPO Global Logistics and opened five cold-starts in Nashville, Tenn.; Montreal, Quebec; Orlando, Fla.; Dallas, Texas; and Salt Lake City, Utah; and

 

    Enhanced XPO technology with new algorithms for pricing and carrier procurement, customer and carrier portals, and analytic capabilities for truckload market conditions; and acquired strong technologies for customer experience management (3PD) and managed transportation (NLM).

In January 2014, the company agreed to acquire Pacer International, the third largest provider of intermodal services in North America, and the largest provider of intermodal services to the fast-growing cross-border Mexico market.

Full Year 2013 Financial Results

For the full year 2013, the company reported total revenue of $702.3 million, a 152.1% increase from 2012.

Consistent with the company’s previously announced strategy, investments in long-term growth impacted results. Net loss for the full year 2013 was $48.5 million, compared with a net loss of $20.3 million for 2012. The company reported a full year 2013 net loss available to common shareholders of $51.5 million, or a loss of $2.26 per diluted share, compared with a net loss of $23.3 million, or a loss of $1.49 per diluted share, for 2012. These results reflect a $10.3 million tax benefit related to the release of a valuation allowance; $3.1 million, or $1.9 million after-tax, in accelerated amortization of intangible assets related to the rebranding of the freight forwarding business; and $3.0 million, or $1.9 million after-tax, for a commitment fee related to an undrawn debt funding option for the 3PD transaction.

EBITDA for the full year 2013 was a loss of $32.0 million, compared with a loss of $25.6 million for 2012, primarily reflecting planned investments in scale, including a significant increase in sales headcount year-over-year. EBITDA for 2013 reflects $6.5 million, or $4.9 million after-tax, of acquisition-related costs; $4.9 million, or $3.1 million after-tax, of litigation costs; and $4.7 million of non-cash compensation.

Conference Call

The company will hold a conference call on Tuesday, February 25, 2014, at 8:30 a.m. Eastern Time. Participants can call toll-free (from U.S./Canada) 1-800-447-0521; international callers dial +1-847-413-3238. 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 March 27, 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 36474327.

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 largest provider of heavy goods, last-mile logistics, and the largest manager of expedited shipments, with growing positions in intermodal, less-than-truckload brokerage, global freight forwarding and managed transportation. The company facilitates more than 20,000 deliveries a day throughout the U.S., Mexico and Canada.

XPO Logistics currently has 94 locations and over 2,200 employees operating in the United States and Canada. Its three business units – freight brokerage, expedited transportation and freight forwarding – use relationships with ground, sea and air carriers to serve more than 9,500 customers in the manufacturing, industrial, retail, commercial, life sciences and government sectors. The company has approximately 400 trucks under exclusive contract and over 24,000 additional relationships with carriers that provide capacity. 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 earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”) for the quarters and 12-month periods ended December 31, 2013, and December 31, 2012. 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 improves 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. In addition to its use by management, we believe that EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of companies in our industry. Other companies may calculate EBITDA differently, and therefore our EBITDA may not be comparable to similarly titled measures of other companies. EBITDA is not a measure 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 are significant and necessary components of the operations of our business, and, therefore, EBITDA should only be used as a supplemental measure of our operating performance.

Forward-looking Statements

This document 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, XPO’s financial targets for full year 2014 and full year 2017 and the anticipated closing date and expected impact of the acquisition of Pacer International. 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 XPO in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors XPO believes 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 and Pacer’s filings with the SEC and the following: economic conditions generally; competition; XPO’s ability to find other suitable acquisition candidates and execute its acquisition strategy; the expected impact of the acquisition of Pacer, including the expected impact on XPO’s results of operations; the ability to obtain the requisite regulatory approvals, Pacer shareholder approval and the satisfaction of other conditions to consummation of the transaction; the ability to realize anticipated synergies and cost savings; XPO’s ability to raise debt and equity capital; XPO’s ability to attract and retain key employees to execute its growth strategy, including retention of Pacer’s management team; litigation, including litigation related to misclassification of independent contractors; the ability to develop, implement and maintain a suitable information technology system; the ability to maintain positive relationships with XPO’s and Pacer’s networks of third-party transportation providers; the ability to retain XPO’s and Pacer’s largest customers; XPO’s ability to successfully integrate Pacer and other acquired businesses; and governmental regulation. All forward-looking statements set forth in this document 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, Pacer or their respective 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.

Consolidated Statements of Operations

(In thousands, except per share amounts)

 

     Three Months Ended     Year Ended  
     December 31,     December 31,  
     2013     2012     2013     2012  

Revenue

   $ 257,231      $ 108,503      $ 702,303      $ 278,591   

Expenses

        

Direct expense

     204,159        92,840        578,796        237,765   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin

     53,072        15,663        123,507        40,826   

Sales general and administrative expense

     61,596        26,755        175,832        68,790   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

     (8,524     (11,092     (52,325     (27,964
  

 

 

   

 

 

   

 

 

   

 

 

 

Other expense

     185        44        478        363   

Interest expense

     5,584        3,177        18,169        3,207   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income tax provision

     (14,293     (14,313     (70,972     (31,534

Income tax benefit

     (3,694     (4,994     (22,442     (11,195
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (10,599     (9,319     (48,530     (20,339

Cumulative preferred dividends

     (743     (743     (2,972     (2,993
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss available to common shareholders

   $ (11,342   $ (10,062   $ (51,502   $ (23,332
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic loss per share

        

Net loss

   $ (0.37   $ (0.57   $ (2.26   $ (1.49

Diluted loss per share

        

Net loss

   $ (0.37   $ (0.57   $ (2.26   $ (1.49

Weighted average common shares outstanding

        

Basic weighted average common shares outstanding

     30,423        17,702        22,752        15,694   

Diluted weighted average common shares outstanding

     30,423        17,702        22,752        15,694   


XPO Logistics, Inc.

Consolidated Balance Sheets

(In thousands, except share data)

 

     December 31,     December 31,  
     2013     2012  
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 21,524      $ 252,293   

Restricted cash

     2,141        —     

Accounts receivable, net of allowances of $3,539 and $603, respectively

     134,227        61,245   

Prepaid expenses

     3,935        1,555   

Deferred tax asset, current

     3,041        1,406   

Income tax receivable

     1,504        2,569   

Other current assets

     5,800        1,866   
  

 

 

   

 

 

 

Total current assets

     172,172        320,934   
  

 

 

   

 

 

 

Property and equipment, net of $11,803 and $5,323 in accumulated depreciation, respectively

     56,571        13,090   

Goodwill

     363,448        55,947   

Identifiable intangible assets, net of $15,411 and $4,592 in accumulated amortization, respectively

     185,179        22,473   

Deferred tax asset, long-term

     72        —     

Other long-term assets

     2,799        764   
  

 

 

   

 

 

 

Total long-term assets

     608,069        92,274   
  

 

 

   

 

 

 

Total assets

   $ 780,241      $ 413,208   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Current liabilities:

    

Accounts payable

   $ 43,111      $ 22,108   

Accrued salaries and wages

     11,741        3,516   

Accrued expenses, other

     37,769        21,123   

Current maturities of long-term debt

     2,028        491   

Other current liabilities

     4,684        1,789   
  

 

 

   

 

 

 

Total current liabilities

     99,333        49,027   
  

 

 

   

 

 

 

Convertible senior notes

     106,268        108,280   

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

     75,373        676   

Deferred tax liability, long term

     15,200        6,781   

Other long-term liabilities

     28,224        3,385   
  

 

 

   

 

 

 

Total long-term liabilities

     225,065        119,122   
  

 

 

   

 

 

 

Commitments and contingencies

    

Stockholders’ equity:

    

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

     42,737        42,794   

Common stock, $.001 par value; 150,000,000 shares authorized; 30,583,073 and 18,002,985 shares issued, respectively; and 30,538,073 and 17,957,985 shares outstanding, respectively

     30        18   

Additional paid-in capital

     524,972        262,641   

Treasury stock, at cost, 45,000 shares held

     (107     (107

Accumulated deficit

     (111,789     (60,287
  

 

 

   

 

 

 

Total stockholders’ equity

     455,843        245,059   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 780,241      $ 413,208   
  

 

 

   

 

 

 


XPO Logistics, Inc.

Consolidated Statements of Cash Flows

(In thousands)

 

    Year Ended  
    December 31,  
    2013     2012     2011  

Operating activities

     

Net (loss) income

  $ (48,530   $ (20,339   $ 759   

Adjustments to reconcile net (loss) income to net cash from operating activities

     

Provisions for allowance for doubtful accounts

    2,596        916        219   

Depreciation and amortization

    20,795        2,713        1,240   

Stock compensation expense

    4,746        4,398        1,180   

Accretion of debt

    5,973        1,475        —     

Other

    1,307        26        12   

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

     

Accounts receivable

    (36,975     (13,755     1,627   

Deferred tax expense

    (22,673     (8,260     (327

Income tax receivable

    96        (1,556     239   

Prepaid expense and other current assets

    (3,035     824        425   

Other long-term assets

    18        (276     97   

Accounts payable

    (8,283     (2,585     (191

Accrued expenses and other liabilities

    17,663        12,143        1,331   
 

 

 

   

 

 

   

 

 

 

Cash flows (used) provided by operating activities

    (66,302     (24,276     6,611   
 

 

 

   

 

 

   

 

 

 

Investing activities

     

Acquisition of businesses, net of cash acquired

    (458,794     (57,236     —     

Payment for purchases of property and equipment

    (11,585     (6,981     (754

Other

    125        —          13   
 

 

 

   

 

 

   

 

 

 

Cash flows used by investing activities

    (470,254     (64,217     (741
 

 

 

   

 

 

   

 

 

 

Financing activities

     

Proceeds from issuance of preferred stock, net of issuance costs

    —          —          71,628   

Proceeds from issuance of convertible senior notes, net

    —          138,504        —     

Proceeds from borrowing on revolving debt facility, net of issuance costs

    73,349        —          —     

Proceeds from stock offering, net

    239,496        136,961        —     

Dividends paid to preferred stockholders

    (2,972     (3,000     (375

Other

    (4,086     (5,686     (3,677
 

 

 

   

 

 

   

 

 

 

Cash flows provided by financing activities

    305,787        266,779        67,576   
 

 

 

   

 

 

   

 

 

 

Net (decrease) increase in cash

    (230,769     178,286        73,446   

Cash and cash equivalents, beginning of period

    252,293        74,007        561   
 

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of period

  $ 21,524      $ 252,293      $ 74,007   
 

 

 

   

 

 

   

 

 

 

Supplemental disclosure of cash flow information:

     

Cash paid for interest

    12,387        22        110   

Cash paid for income taxes, net of cash receipts

    243        247        233   

Equity portion of acquisition purchase price

    10,446        —          —     

Freight Brokerage

Summary Financial Table

(In thousands)

 

     Three Months Ended December 31,     Year Ended December 31,  
     2013      2012     $ Variance     Change %     2013     2012     $ Variance     Change %  

Revenue

   $ 215,183       $ 71,146      $ 144,037        202.5   $ 541,389      $ 125,121      $ 416,268        332.7

Direct expense

                 

Transportation services

     169,253         61,379        107,874        175.8     444,719        108,507        336,212        309.9

Other direct expense

     119         245        (126     -51.4     575        489        86        17.6
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct expense

     169,372         61,624        107,748        174.8     445,294        108,996        336,298        308.5
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin

     45,811         9,522        36,289        381.1     96,095        16,125        79,970        495.9
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

SG&A expense

                 

Salaries & benefits

     24,784         8,778        16,006        182.3     64,873        15,171        49,702        327.6

Other SG&A expense

     8,638         1,734        6,904        398.2     20,189        3,590        16,599        462.4

Purchased services

     3,501         672        2,829        421.0     7,563        1,695        5,868        346.2

Depreciation & amortization

     8,087         810        7,277        898.4     14,892        1,223        13,669        1117.7
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total SG&A expense

     45,010         11,994        33,016        275.3     107,517        21,679        85,838        395.9
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

   $ 801       $ (2,472   $ 3,273        -132.4   $ (11,422   $ (5,554   $ (5,868     105.7
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


Freight Brokerage

Key Data

(In thousands, except personnel data)

 

     3 Mos Ended     3 Mos Ended     Year Ended     Year Ended  
     December 31,     December 31,     December 31,     December 31,  
     2013     2012     2013     2012  

Revenues

        

Truckload, LTL, and Intermodal

   $ 121,749      $ 71,146      $ 401,420      $ 125,121   

Last Mile

     93,434        —          139,969        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenue

   $ 215,183      $ 71,146      $ 541,389      $ 125,121   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Margin

        

Truckload, LTL, and Intermodal

   $ 17,709      $ 9,522      $ 54,785      $ 16,125   

Last Mile

     28,102        —          41,310        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Gross Margin

   $ 45,811      $ 9,522      $ 96,095      $ 16,125   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Margin %

        

Truckload, LTL, and Intermodal

     14.5     13.4     13.6     12.9

Last Mile

     30.1     —          29.5     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Overall Gross Margin %

     21.3     13.4     17.7     12.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Freight Brokerage personnel (end of period)

     1,753        594       

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

(In thousands)

 

     Three Months Ended December 31,     Year Ended December 31,  
     2013      2012      $ Variance     Change %     2013      2012      $ Variance     Change %  

Revenue

   $ 26,397       $ 22,102       $ 4,295        19.4   $ 101,817       $ 94,008       $ 7,809        8.3

Direct expense

                    

Transportation services

     21,086         17,381         3,705        21.3     81,532         73,376         8,156        11.1

Other direct expense

     692         1,065         (373     -35.0     3,111         3,738         (627     -16.8
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total direct expense

     21,778         18,446         3,332        18.1     84,643         77,114         7,529        9.8
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Gross margin

     4,619         3,656         963        26.3     17,174         16,894         280        1.7
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

SG&A expense

                    

Salaries & benefits

     1,932         1,673         259        15.5     7,786         6,613         1,173        17.7

Other SG&A expense

     460         608         (148     -24.3     2,047         2,121         (74     -3.5

Purchased services

     208         308         (100     -32.5     955         1,015         (60     -5.9

Depreciation & amortization

     493         79         414        524.1     1,182         320         862        269.4
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total SG&A expense

     3,093         2,668         425        15.9     11,970         10,069         1,901        18.9
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Operating income

   $ 1,526       $ 988       $ 538        54.5   $ 5,204       $ 6,825       $ (1,621     -23.8
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Note: Total depreciation and amortization for the Expedited Transportation operating segment included in both direct expense and SG&A, was $530,000 and $130,000 for the three-months ended December 31, 2013 and 2012, respectively, and $1,351,000 and $524,000 for the years ended December 31, 2013 and 2012, respectively.

Freight Forwarding

Summary Financial Table

(In thousands)

 

     Three Months Ended December 31,     Year Ended December 31,  
     2013      2012      $ Variance     Change %     2013     2012      $ Variance     Change %  

Revenue

   $ 18,455       $ 18,463       $ (8     0.0   $ 73,154      $ 67,692       $ 5,462        8.1

Direct expense

                   

Transportation services

     14,018         13,804         214        1.6     55,611        50,381         5,230        10.4

Station commissions

     1,761         2,120         (359     -16.9     7,168        9,321         (2,153     -23.1

Other direct expense

     34         54         (20     -37.0     137        182         (45     -24.7
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total direct expense

     15,813         15,978         (165     -1.0     62,916        59,884         3,032        5.1
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Gross margin

     2,642         2,485         157        6.3     10,238        7,808         2,430        31.1
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

SG&A expense

                   

Salaries & benefits

     1,457         1,280         177        13.8     6,026        4,050         1,976        48.8

Other SG&A expense

     338         407         (69     -17.0     1,386        1,479         (93     -6.3

Purchased services

     33         203         (170     -83.7     344        597         (253     -42.4

Depreciation & amortization

     70         141         (71     -50.4     3,477        574         2,903        505.7
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total SG&A expense

     1,898         2,031         (133     -6.5     11,233        6,700         4,533        67.7
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Operating income

   $ 744       $ 454       $ 290        63.9   $ (995   $ 1,108       $ (2,103     -189.8
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 


XPO Corporate

Summary of Selling, General & Administrative Expense

(In thousands)

 

     Three Months Ended December 31,     Year Ended December 31,  
     2013      2012      $ Variance     Change %     2013      2012      $ Variance      Change %  

SG&A expense

                     

Salaries & benefits

   $ 6,852       $ 3,780       $ 3,072        81.3   $ 21,947       $ 13,445       $ 8,502         63.2

Other SG&A expense

     946         1,691         (745     -44.1     5,737         4,425         1,312         29.6

Purchased services

     3,432         4,422         (990     -22.4     16,353         12,082         4,271         35.4

Depreciation & amortization

     366         168         198        117.9     1,075         391         684         174.9
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total SG&A expense

   $ 11,596       $ 10,061       $ 1,535        15.3   $ 45,112       $ 30,343       $ 14,769         48.7
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Note: Intercompany eliminations included revenue of $2.8 million and $3.2 million for the three-months ended December 31, 2013 and 2012, respectively, as well as revenue of $14.1 million and $8.2 million for the years ended December 31, 2013 and 2012, respectively.

Reconciliation of Non-GAAP Measures

XPO Logistics, Inc.

Consolidated Reconciliation of EBITDA to Net Loss

(In thousands)

 

     Three Months Ended     Year Ended  
     December 31,     December 31,  
     2013     2012     Change %     2013     2012     Change %  

Net loss available to common shareholders

   $ (11,342   $ (10,062     12.7   $ (51,502   $ (23,332     120.7

Preferred dividends

     (743     (743     0.0     (2,972     (2,993     -0.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (10,599     (9,319     13.7     (48,530     (20,339     138.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense

     5,584        3,177        75.8     18,169        3,207        466.5

Income tax benefit

     (3,694     (4,994     -26.0     (22,442     (11,195     100.5

Depreciation and amortization

     9,052        1,198        655.6     20,795        2,713        666.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 343      $ (9,938     -103.5   $ (32,008   $ (25,614     25.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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      Year Ended  
     December 31, 2013      December 31, 2012      December 31, 2013      December 31, 2012  

Basic common stock outstanding

     30,422,675         17,701,679         22,752,320         15,694,430   
  

 

 

    

 

 

    

 

 

    

 

 

 

Potentially Dilutive Securities:

           

Shares underlying the conversion of preferred stock to common stock

     10,602,950         10,522,399         10,607,309         10,695,326   

Shares underlying the conversion of the convertible senior notes

     8,257,207         8,575,577         8,623,331         2,238,758   

Shares underlying warrants to purchase common stock

     7,341,629         5,548,022         6,900,642         5,717,284   

Shares underlying stock options to purchase common stock

     438,910         447,545         356,815         473,421   

Shares underlying restricted stock units

     427,409         237,453         367,183         249,139   
  

 

 

    

 

 

    

 

 

    

 

 

 
     27,068,106         25,330,996         26,855,280         19,373,928   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted weighted shares outstanding

     57,490,781         43,032,675         49,607,600         35,068,358   
  

 

 

    

 

 

    

 

 

    

 

 

 

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 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 $22.27 per share and $14.52 per share for the three months ended December 31, 2013 and 2012, respectively, and $19.69 per share and $15.01 per share for the years ended December 31, 2013 and 2012, respectively.