UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 30, 2013
XPO LOGISTICS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-32172 | 03-0450326 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
Five Greenwich Office Park, Greenwich, Connecticut 06831
(Address of principal executive offices)
(855) 976-4636
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. | Results of Operations and Financial Condition |
On July 30, 2013, XPO Logistics, Inc. (the “Company”) issued a press release announcing its results of operations for the fiscal quarter ended June 30, 2013. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit |
Exhibit Description | |
| 99.1 | Press Release, dated July 30, 2013, issued by XPO Logistics, Inc. | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: July 30, 2013 | XPO LOGISTICS, INC. | |||||
| By: | /s/ Gordon E. Devens | |||||
| Gordon E. Devens | ||||||
| Senior Vice President and General Counsel | ||||||
EXHIBIT INDEX
| Exhibit |
Exhibit Description | |
| 99.1 | Press Release, dated July 30, 2013, issued by XPO Logistics, Inc. | |
Exhibit 99.1
XPO Logistics Announces Second Quarter 2013 Results
Reports 65% Organic Growth and Significant Margin Expansion in Freight Brokerage
Reaffirms Full Year Financial Outlook
GREENWICH, Conn. — July 30, 2013 — XPO Logistics, Inc. (NYSE: XPO) today announced financial results for the second quarter of 2013.
Total revenue was $137.1 million for the second quarter, a 151.4% increase from the same period in 2012. Gross margin dollars increased 128.4% year-over-year to $19.3 million, and gross margin percentage was 14.1%.
For the second quarter of 2013, the company reported a net loss of $17.4 million, compared with a net loss of $5.2 million for the same period in 2012. The net loss available to common shareholders was $18.1 million, or a loss of $1.00 per diluted share, compared with a net loss of $5.9 million, or a loss of $0.34 per diluted share, for the same period in 2012. The company’s second quarter results reflect the positive impact of acquisitions from prior periods and significant organic growth, offset by planned strategic investments in long-term value creation, transaction-related costs and litigation costs.
Earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”), a non-GAAP financial measure, was a loss of $12.4 million for the second quarter of 2013, compared with a loss of $3.0 million for the same period in 2012. EBITDA includes $1.1 million and $1.2 million of non-cash share-based compensation for the second quarters of 2013 and 2012, respectively. A reconciliation of EBITDA to net income is provided in the attached financial tables.
The company had $178.2 million of cash as of June 30, 2013.
Reaffirms Full Year 2013 Financial Outlook
The company has reaffirmed its full year outlook for an annual revenue run rate of more than $1 billion as of December 31, and positive EBITDA for the fourth quarter of 2013.
3PD Acquisition to Close in Third Quarter
On July 15, 2013, the company announced that it had entered into a definitive agreement to acquire all of the common stock of 3PD, Inc. (3PD) in a transaction valued at approximately $365 million. 3PD is the largest non-asset, third party provider of heavy goods, last-mile logistics in North America. The acquisition is expected to close in the third quarter of 2013, subject to customary conditions.
3PD, based in Atlanta, was founded in 2001 to capitalize on the rapid growth in last-mile logistics. 3PD provides blue chip retail shippers with customized solutions tailored to their supply chain needs, and serves small and mid-sized shippers by matching them to carriers on a transactional basis. The business has differentiated itself through its ability to assure a superb customer experience using proprietary technology and industry-leading process management.
CEO Comments
Bradley Jacobs, chairman and chief executive officer, said, “In the second quarter, we delivered a 151% increase in revenue year-over-year, and 128% more gross margin dollars. Our freight brokerage business achieved robust organic growth of 65%, driven in large part by the traction of our eight brokerage cold-starts. These locations are barely a year old on average, but they’re already generating a combined revenue run rate of over $90 million and sequential improvements in gross margin percentage. We’re in the process of opening a new mega-branch in Cincinnati with a highly experienced leader to scale it up. And our acquisition pipeline remains very active, with a current list of about 100 targets.
“Our expedited business saw pressure on margin throughout the quarter, as demand for expedited services remained soft. Capacity tightened somewhat in early July, however, and margins have expanded in recent weeks. Our freight forwarding business is outpacing industry growth by capturing more international business. Freight forwarding revenue increased 17% in the second quarter, gross margin was up 230 basis points, and EBITDA increased significantly by 157%.”
Jacobs continued, “We’ve entered the back half of the year with a lot of momentum. Our productivity per brokerage employee improved quarter-to-quarter, despite the addition of almost 100 net new hires. Our strategic and national account teams recently had major wins in truckload brokerage, as well as cross-border, less-than-truckload and expedite. And soon we’ll complete the XPO supply chain with the acquisition of 3PD’s heavy goods, last-mile capabilities. 3PD is the clear market leader in this space, with an impressive growth trajectory. We intend to scale up the business and capitalize on the rapidly growing demand for last-mile logistics. I’m pleased that we’re on track to meet our revenue outlook for a billion dollar run rate by year-end – that’s an exciting milestone in our plan to build XPO into a world-class company.”
Second Quarter 2013 Results by Business Unit
| • | Freight brokerage: The company’s freight brokerage business generated total revenue of $95.4 million for the quarter, a 587.2% increase from the same period in 2012. Gross margin percentage was 13.2% for the quarter, compared with 11.0% for the same period in 2012, an improvement of 220 basis points. The year-over-year increases in revenue and gross margin were primarily driven by acquisitions and the expansion of the company’s brokerage cold-start locations. The operating loss was $5.0 million, compared with a loss of $825,000 a year ago, primarily reflecting 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 2.8% increase from the same period in 2012. Gross margin percentage was 15.9% for the quarter, compared with 20.0% for the same period in 2012. The decrease in gross margin percentage primarily reflects a soft expedite environment, as well as the addition of revenue from air charter, which generates lower margins than the company’s over-the-road expedited business. Second quarter operating income was $1.2 million, compared with $2.6 million a year ago, primarily reflecting the impact of a lower gross margin percentage. |
| • | Freight forwarding: The company’s freight forwarding business generated total revenue of $19.3 million for the quarter, a 17.4% increase from the same period in 2012. The increase in revenue was primarily driven by the growth of company-owned locations and a higher volume of international shipments. Gross margin percentage was 13.3% for the quarter, an improvement of 230 basis points, compared with 11.0% for the same period in 2012. The increase in gross margin percentage was primarily driven by investments in company-owned locations. Second quarter operating income was $478,000, a 119.3% increase year-over-year. The increase in operating income reflected a higher gross margin partially offset by SG&A expenses related to cold-starts opened in prior periods. |
| • | Corporate: Corporate SG&A expense for the second quarter of 2013 was $10.7 million, compared with $5.4 million for the second quarter of 2012. The increase in SG&A expense was primarily driven by a larger headcount in corporate shared services and an increase in purchased services, including $1.8 million, or $0.10 per diluted share, of transaction-related costs; and $1.5 million, or $0.08 per diluted share, of litigation costs. |
Six Months 2013 Financial Results
For the six months ended June 30, 2013, the company reported total revenue of $251.1 million, a 153.4% increase from the first six months of 2012.
Net loss was $31.9 million for the first six months of 2013, compared with net loss of $7.9 million for the same period last year. The company reported a six-month net loss available to common shareholders of $33.4 million, or a loss of $1.84 per diluted share, compared with a net loss of $9.4 million, or a loss of $0.56 per diluted share, for the same period in 2012.
EBITDA, a non-GAAP financial measure, was a loss of $22.1 million for the first six months of 2013, compared with a loss of $6.9 million for the same period in 2012, primarily reflecting planned investments in future value creation, including a significant increase in sales headcount year-over-year. EBITDA for the first six months of 2013 included $2.6 million, or $0.14 per diluted share, of litigation costs; $2.1 million, or $0.12 per diluted share, of transaction-related costs; and $2.1 million, or $0.12 per diluted share, in non-cash share-based compensation.
Conference Call
The company will hold a conference call on Wednesday, July 31, 2013, at 8:30 a.m. Eastern Time. Participants can call toll-free (from U.S./Canada) 1-888-895-5271; international callers dial +1-847-619-6547. 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 call will be archived until August 31, 2013. 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 35253664.
About XPO Logistics, Inc.
XPO Logistics, Inc. (NYSE: XPO) is one of the fastest growing providers of transportation logistics services in North America. The company’s three business units – freight brokerage, expedited transportation and freight forwarding – use relationships with more than 22,000 ground, sea and air carriers to serve over 8,500 customers in the manufacturing, industrial, retail, commercial, life sciences and government sectors. XPO is built to deliver constant growth in truck capacity, passionate service and technological innovation through 62 locations in the United States and Canada. 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 ended June 30, 2013, and June 30, 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 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, without limitation, our 2013 outlook with respect to annual revenue and fourth quarter 2013 EBITDA, the anticipated closing date of the acquisition of 3PD and the related financing (the “3PD Transaction”), the expected impact of the 3PD Transaction and 3PD’s anticipated growth. 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 projected satisfaction of closing conditions for the 3PD Transaction; the expected closing date for the 3PD Transaction; the expected impact of the 3PD Transaction, including the expected impact on the Company’s results of operations and EBITDA; our ability to raise debt and equity capital; our ability to attract and retain key employees to execute our growth strategy, including retention of 3PD’s management team; 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 3PD’s largest customers; our ability to successfully integrate 3PD and other acquired businesses; 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 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 press release 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, including our 2013 outlook, except to the extent required by law.
Investor Contact:
XPO Logistics, Inc.
Dana Gibson, +1-203-930-1470
dana.gibson@xpologistics.com
Media Contact:
Brunswick Group
Steve Lipin / Gemma Hart, +1-212-333-3810
XPO Logistics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Revenues |
$ | 137,091 | $ | 54,540 | $ | 251,090 | $ | 99,100 | ||||||||
| Expenses |
||||||||||||||||
| Direct expense |
117,751 | 46,074 | 215,490 | 83,861 | ||||||||||||
|
|
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|
|||||||||
| Gross margin |
19,340 | 8,466 | 35,600 | 15,239 | ||||||||||||
| Sales general and administrative expense |
33,355 | 11,834 | 60,982 | 22,831 | ||||||||||||
|
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|
|||||||||
| Operating loss |
(14,015 | ) | (3,368 | ) | (25,382 | ) | (7,592 | ) | ||||||||
|
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|
|
|
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|
|||||||||
| Other expense |
167 | 26 | 58 | 5 | ||||||||||||
| Interest expense |
3,106 | 3 | 6,170 | 15 | ||||||||||||
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|
|
|
|
|
|
|||||||||
| Loss before income tax provision |
(17,288 | ) | (3,397 | ) | (31,610 | ) | (7,612 | ) | ||||||||
| Income tax benefit |
74 | 1,780 | 296 | 259 | ||||||||||||
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|||||||||
| Net loss |
(17,362 | ) | (5,177 | ) | (31,906 | ) | (7,871 | ) | ||||||||
| Cumulative preferred dividends |
(743 | ) | (750 | ) | (1,486 | ) | (1,500 | ) | ||||||||
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| Net loss available to common shareholders |
$ | (18,105 | ) | $ | (5,927 | ) | $ | (33,392 | ) | $ | (9,371 | ) | ||||
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| Basic loss per share |
||||||||||||||||
| Net loss |
$ | (1.00 | ) | $ | (0.34 | ) | $ | (1.84 | ) | $ | (0.56 | ) | ||||
| Diluted loss per share |
||||||||||||||||
| Net loss |
$ | (1.00 | ) | $ | (0.34 | ) | $ | (1.84 | ) | $ | (0.56 | ) | ||||
| Weighted average common shares outstanding |
||||||||||||||||
| Basic weighted average common shares outstanding |
18,180 | 17,637 | 18,107 | 16,629 | ||||||||||||
| Diluted weighted average common shares outstanding |
18,180 | 17,637 | 18,107 | 16,629 | ||||||||||||
XPO Logistics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
| June 30, | December 31, | |||||||
| 2013 | 2012 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 178,155 | $ | 252,293 | ||||
| Accounts receivable, net of allowances of $1,318 and $603, respectively |
89,740 | 61,245 | ||||||
| Prepaid expenses |
2,095 | 1,555 | ||||||
| Deferred tax asset, current |
938 | 1,406 | ||||||
| Income tax receivable |
2,840 | 2,569 | ||||||
| Other current assets |
4,203 | 1,866 | ||||||
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| Total current assets |
277,971 | 320,934 | ||||||
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| Property and equipment, net of $6,954 and $5,323 in accumulated depreciation, respectively |
15,554 | 13,090 | ||||||
| Goodwill |
69,927 | 55,947 | ||||||
| Identifiable intangible assets, net of $6,295 and $4,592 in accumulated amortization, respectively |
30,121 | 22,473 | ||||||
| Deferred tax asset, long-term |
72 | 0 | ||||||
| Other long-term assets |
834 | 764 | ||||||
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| Total long-term assets |
116,508 | 92,274 | ||||||
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| Total assets |
$ | 394,479 | $ | 413,208 | ||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 23,591 | $ | 22,108 | ||||
| Accrued salaries and wages |
5,570 | 3,516 | ||||||
| Accrued expenses, other |
23,733 | 21,123 | ||||||
| Current maturities of notes payable and capital leases |
850 | 491 | ||||||
| Other current liabilities |
1,548 | 1,789 | ||||||
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| Total current liabilities |
55,292 | 49,027 | ||||||
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| Convertible senior notes |
111,197 | 108,280 | ||||||
| Notes payable and capital leases, net of current maturities |
767 | 676 | ||||||
| Deferred tax liability, long term |
6,553 | 6,781 | ||||||
| Other long-term liabilities |
3,838 | 3,385 | ||||||
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| Total long-term liabilities |
122,355 | 119,122 | ||||||
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| Stockholders’ equity: |
||||||||
| Preferred stock, $.001 par value; 10,000,000 shares; 74,275 shares issued and outstanding |
42,794 | 42,794 | ||||||
| Common stock, $.001 par value; 150,000,000 shares authorized; 18,241,217 and 18,002,985 shares issued, respectively; and 18,196,217 and 17,957,985 shares outstanding, respectively |
18 | 18 | ||||||
| Additional paid-in capital |
267,806 | 262,641 | ||||||
| Treasury stock, at cost, 45,000 shares held |
(107 | ) | (107 | ) | ||||
| Accumulated deficit |
(93,679 | ) | (60,287 | ) | ||||
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| Total stockholders’ equity |
216,832 | 245,059 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 394,479 | $ | 413,208 | ||||
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XPO Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2013 | 2012 | |||||||
| Operating activities |
||||||||
| Net loss |
$ | (31,906 | ) | $ | (7,871 | ) | ||
| Adjustments to reconcile net loss to net cash from operating activities |
||||||||
| Provisions for allowance for doubtful accounts |
627 | 84 | ||||||
| Depreciation & amortization expense |
3,349 | 741 | ||||||
| Stock compensation expense |
2,147 | 2,266 | ||||||
| Gain on sale of affiliate |
(176 | ) | — | |||||
| Accretion of debt |
2,916 | — | ||||||
| Exchange loss |
46 | — | ||||||
| Changes in assets and liabilities, net of effects of acquisitions: |
||||||||
| Accounts receivable |
(24,134 | ) | (5,496 | ) | ||||
| Deferred tax expense |
167 | 1,537 | ||||||
| Income tax receivable |
(732 | ) | (1,388 | ) | ||||
| Prepaid expenses and other current assets |
(275 | ) | (495 | ) | ||||
| Other long-term assets |
(28 | ) | (18 | ) | ||||
| Accounts payable |
(5,973 | ) | (1,313 | ) | ||||
| Accrued expenses and other liabilities |
4,899 | 1,816 | ||||||
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| Cash provided used by operating activities |
(49,073 | ) | (10,137 | ) | ||||
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| Investing activities |
||||||||
| Acquisition of businesses, net of cash acquired |
(19,660 | ) | (3,713 | ) | ||||
| Proceeds from sale of business interests |
125 | — | ||||||
| Payment of acquisition earn-out |
— | (450 | ) | |||||
| Payment for purchases of property and equipment |
(3,864 | ) | (2,569 | ) | ||||
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| Cash Flows used by investing activities |
(23,399 | ) | (6,732 | ) | ||||
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| Financing Activities |
||||||||
| Credit line, net activity |
(150 | ) | — | |||||
| Payments of notes payable and capital leases |
16 | (2,018 | ) | |||||
| Proceeds from stock offering, net |
— | 136,961 | ||||||
| Proceeds from exercise of options, net |
(56 | ) | 131 | |||||
| Proceeds from exercise of warrants |
10 | — | ||||||
| Dividends paid to preferred stockholders |
(1,486 | ) | (1,500 | ) | ||||
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| Cash flows (used) provided by financing activities |
(1,666 | ) | 133,574 | |||||
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| Effect of exchange rate changes on cash |
— | — | ||||||
| Net (decrease) increase in cash |
(74,138 | ) | 116,705 | |||||
| Cash and cash equivalents, beginning of period |
252,293 | 74,007 | ||||||
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| Cash and cash equivalents, end of period |
$ | 178,155 | $ | 190,712 | ||||
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| Supplemental disclosure of noncash activities: |
||||||||
| Cash paid during the period for interest |
3,337 | 15 | ||||||
| Cash paid during the period for income taxes |
906 | 159 | ||||||
Freight Brokerage
Summary Financial Table
(Unaudited)
(In thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
| 2013 | 2012 | $ Variance | Change % | 2013 | 2012 | $ Variance | Change % | |||||||||||||||||||||||||
| Revenue |
$ | 95,360 | $ | 13,877 | $ | 81,483 | 587.2 | % | $ | 173,590 | $ | 21,805 | $ | 151,785 | 696.1 | % | ||||||||||||||||
| Direct expense |
||||||||||||||||||||||||||||||||
| Transportation services |
82,705 | 12,255 | 70,450 | 574.9 | % | 150,662 | 19,160 | 131,502 | 686.3 | % | ||||||||||||||||||||||
| Other direct expense |
88 | 101 | (13 | ) | -12.9 | % | 295 | 95 | 200 | 210.5 | % | |||||||||||||||||||||
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| Total direct expense |
82,793 | 12,356 | 70,437 | 570.1 | % | 150,957 | 19,255 | 131,702 | 684.0 | % | ||||||||||||||||||||||
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| Gross margin |
12,567 | 1,521 | 11,046 | 726.2 | % | 22,633 | 2,550 | 20,083 | 787.6 | % | ||||||||||||||||||||||
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| SG&A expense |
||||||||||||||||||||||||||||||||
| Salaries & benefits |
12,367 | 1,572 | 10,795 | 686.7 | % | 22,530 | 2,431 | 20,099 | 826.8 | % | ||||||||||||||||||||||
| Purchased services |
979 | 266 | 713 | 268.0 | % | 1,793 | 328 | 1,465 | 446.6 | % | ||||||||||||||||||||||
| Other SG&A expense |
3,031 | 432 | 2,599 | 601.6 | % | 4,926 | 606 | 4,320 | 712.9 | % | ||||||||||||||||||||||
| Depreciation & amortization |
1,180 | 76 | 1,104 | 1452.6 | % | 2,194 | 96 | 2,098 | 2185.4 | % | ||||||||||||||||||||||
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|||||||||||||||||
| Total SG&A expense |
17,557 | 2,346 | 15,211 | 648.4 | % | 31,443 | 3,461 | 27,982 | 808.5 | % | ||||||||||||||||||||||
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| Operating loss |
$ | (4,990 | ) | $ | (825 | ) | $ | (4,165 | ) | 504.8 | % | $ | (8,810 | ) | $ | (911 | ) | $ | (7,899 | ) | 867.1 | % | ||||||||||
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Freight Brokerage
Key Employee Data
| June 30, | June 30, | |||||||
| 2013 | 2012 | |||||||
| Freight Brokerage personnel |
788 | 92 | ||||||
| Note: 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, | |||||||||||||||||||||||||||||||
| 2013 | 2012 | $ Variance | Change % | 2013 | 2012 | $ Variance | Change % | |||||||||||||||||||||||||
| Revenue |
$ | 26,445 | $ | 25,731 | $ | 714 | 2.8 | % | $ | 50,320 | $ | 48,151 | $ | 2,169 | 4.5 | % | ||||||||||||||||
| Direct expense |
||||||||||||||||||||||||||||||||
| Transportation services |
21,528 | 19,830 | 1,698 | 8.6 | % | 40,680 | 37,192 | 3,488 | 9.4 | % | ||||||||||||||||||||||
| Other direct expense |
707 | 766 | (59 | ) | -7.7 | % | 1,622 | 1,665 | (43 | ) | -2.6 | % | ||||||||||||||||||||
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| Total direct expense |
22,235 | 20,596 | 1,639 | 8.0 | % | 42,302 | 38,857 | 3,445 | 8.9 | % | ||||||||||||||||||||||
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| Gross margin |
4,210 | 5,135 | (925 | ) | -18.0 | % | 8,018 | 9,294 | (1,276 | ) | -13.7 | % | ||||||||||||||||||||
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| SG&A expense |
||||||||||||||||||||||||||||||||
| Salaries & benefits |
2,016 | 1,665 | 351 | 21.1 | % | 3,961 | 3,325 | 636 | 19.1 | % | ||||||||||||||||||||||
| Purchased services |
246 | 251 | (5 | ) | -2.0 | % | 535 | 448 | 87 | 19.4 | % | |||||||||||||||||||||
| Other SG&A expense |
513 | 506 | 7 | 1.4 | % | 1,117 | 935 | 182 | 19.5 | % | ||||||||||||||||||||||
| Depreciation & amortization |
248 | 79 | 169 | 213.9 | % | 465 | 164 | 301 | 183.5 | % | ||||||||||||||||||||||
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|||||||||||||||||
| Total SG&A expense |
3,023 | 2,501 | 522 | 20.9 | % | 6,078 | 4,872 | 1,206 | 24.8 | % | ||||||||||||||||||||||
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|||||||||||||||||
| Operating income |
$ | 1,187 | $ | 2,634 | $ | (1,447 | ) | -54.9 | % | $ | 1,940 | $ | 4,422 | $ | (2,482 | ) | -56.1 | % | ||||||||||||||
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|||||||||||||||||
Note: Total depreciation and amortization for the Expedited Transportation operating segment included in both direct expense and SG&A, was $291 and $129 for the three-months ended June 30, 2013 and 2012, respectively, and $559 and $266 for the six-month periods ended June 30, 2013 and 2012, respectively.
Freight Forwarding
Summary Financial Table
(Unaudited)
(In thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
| 2013 | 2012 | $ Variance | Change % | 2013 | 2012 | $ Variance | Change % | |||||||||||||||||||||||||
| Revenue |
$ | 19,338 | $ | 16,468 | $ | 2,870 | 17.4 | % | $ | 35,571 | $ | 31,925 | $ | 3,646 | 11.4 | % | ||||||||||||||||
| Direct expense |
||||||||||||||||||||||||||||||||
| Transportation services |
14,743 | 12,150 | 2,593 | 21.3 | % | 26,853 | 23,663 | 3,190 | 13.5 | % | ||||||||||||||||||||||
| Station commissions |
1,992 | 2,457 | (465 | ) | -18.9 | % | 3,700 | 4,773 | (1,073 | ) | -22.5 | % | ||||||||||||||||||||
| Other direct expense |
40 | 52 | (12 | ) | -23.1 | % | 69 | 95 | (26 | ) | -27.4 | % | ||||||||||||||||||||
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| Total direct expense |
16,775 | 14,659 | 2,116 | 14.4 | % | 30,622 | 28,531 | 2,091 | 7.3 | % | ||||||||||||||||||||||
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| Gross margin |
2,563 | 1,809 | 754 | 41.7 | % | 4,949 | 3,394 | 1,555 | 45.8 | % | ||||||||||||||||||||||
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| SG&A expense |
||||||||||||||||||||||||||||||||
| Salaries & benefits |
1,518 | 924 | 594 | 64.3 | % | 2,951 | 1,711 | 1,240 | 72.5 | % | ||||||||||||||||||||||
| Purchased services |
157 | 146 | 11 | 7.5 | % | 247 | 187 | 60 | 32.1 | % | ||||||||||||||||||||||
| Other SG&A expense |
317 | 376 | (59 | ) | -15.7 | % | 720 | 748 | (28 | ) | -3.7 | % | ||||||||||||||||||||
| Depreciation & amortization |
93 | 145 | (52 | ) | -35.9 | % | 181 | 289 | (108 | ) | -37.4 | % | ||||||||||||||||||||
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|||||||||||||||||
| Total SG&A expense |
2,085 | 1,591 | 494 | 31.0 | % | 4,099 | 2,935 | 1,164 | 39.7 | % | ||||||||||||||||||||||
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|
|||||||||||||||||
| Operating income |
$ | 478 | $ | 218 | $ | 260 | 119.3 | % | $ | 850 | $ | 459 | $ | 391 | 85.2 | % | ||||||||||||||||
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|||||||||||||||||
XPO Corporate
Summary of Selling, General & Administrative Expense
(Unaudited)
(In thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
| 2013 | 2012 | $ Variance | Change % | 2013 | 2012 | $ Variance | Change % | |||||||||||||||||||||||||
| SG&A expense |
||||||||||||||||||||||||||||||||
| Salaries & benefits |
$ | 4,590 | $ | 3,101 | $ | 1,489 | 48.0 | % | $ | 9,097 | $ | 6,144 | $ | 2,953 | 48.1 | % | ||||||||||||||||
| Purchased services |
4,532 | 1,207 | 3,325 | 275.5 | % | 7,154 | 3,643 | 3,511 | 96.4 | % | ||||||||||||||||||||||
| Other SG&A expense |
1,337 | 1,014 | 323 | 31.9 | % | 2,696 | 1,685 | 1,011 | 60.0 | % | ||||||||||||||||||||||
| Depreciation & amortization |
231 | 73 | 158 | 216.4 | % | 415 | 90 | 325 | 361.1 | % | ||||||||||||||||||||||
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|||||||||||||||||
| Total SG&A expense |
$ | 10,690 | $ | 5,395 | $ | 5,295 | 98.1 | % | $ | 19,362 | $ | 11,562 | $ | 7,800 | 67.5 | % | ||||||||||||||||
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|||||||||||||||||
Note: Intercompany eliminations included revenue of $4.1 million and $1.5 million for the three-months ended June 30, 2013 and 2012, respectively, as well as revenues of $8.4 million and $2.8 million for the year to date periods ended June 30, 2013 and 2012, respectively, that eliminate upon consolidation.
XPO Logistics, Inc.
Consolidated Reconciliation of EBITDA to Net Loss
(In thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2013 | 2012 | Change % | 2013 | 2012 | Change % | |||||||||||||||||||
| Net loss available to common shareholders |
$ | (18,105 | ) | $ | (5,927 | ) | 205.5 | % | $ | (33,392 | ) | $ | (9,371 | ) | 256.3 | % | ||||||||
| Preferred dividends |
(743 | ) | (750 | ) | -0.9 | % | (1,486 | ) | (1,500 | ) | -0.9 | % | ||||||||||||
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|
|
|
|
|
|
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|
|
|
|||||||||||||
| Net loss |
(17,362 | ) | (5,177 | ) | 235.4 | % | (31,906 | ) | (7,871 | ) | 305.4 | % | ||||||||||||
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|
|
|
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|
|
|
|
|
|
|
|
|||||||||||||
| Interest expense |
3,106 | 3 | 103433.3 | % | 6,170 | 15 | 41033.3 | % | ||||||||||||||||
| Income tax provision |
74 | 1,780 | -95.8 | % | 296 | 259 | 14.3 | % | ||||||||||||||||
| Depreciation and amortization |
1,795 | 423 | 324.3 | % | 3,349 | 741 | 352.0 | % | ||||||||||||||||
|
|
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|
|
|
|
|
|
|
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|
|||||||||||||
| EBITDA |
$ | (12,387 | ) | $ | (2,971 | ) | 316.9 | % | $ | (22,091 | ) | $ | (6,856 | ) | 222.2 | % | ||||||||
|
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|
|||||||||||||
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, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | |||||||||||||
| Basic common stock outstanding |
18,179,570 | 17,636,834 | 18,106,564 | 16,629,420 | ||||||||||||
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|
|
|
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|
|
|||||||||
| Potentially Dilutive Securities: |
||||||||||||||||
| Shares underlying the conversion of preferred stock to common stock |
10,610,714 | 10,714,286 | 10,610,714 | 10,714,286 | ||||||||||||
| Shares underlying the conversion of the convertible senior notes |
8,749,239 | — | 8,749,239 | — | ||||||||||||
| Shares underlying warrants to purchase common stock |
6,262,380 | 6,282,659 | 6,302,668 | 6,282,659 | ||||||||||||
| Shares underlying stock options to purchase common stock |
526,813 | 401,793 | 533,977 | 348,682 | ||||||||||||
| Shares underlying restricted stock units |
436,275 | 559,381 | 418,898 | 613,139 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 26,585,421 | 17,958,119 | 26,615,496 | 17,958,766 | |||||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Diluted weighted shares outstanding |
44,764,991 | 35,594,953 | 44,722,060 | 34,588,186 | ||||||||||||
|
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|
|
|
|
|
|||||||||
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 $16.85 per share and $16.92 per share for the three-month periods ended June 30, 2013 and 2012, respectively, and $17.00 per share and $15.44 per share for the six-month periods ended June 30, 2013 and 2012, respectively.