XPO Logistics Announces Second Quarter 2015 Results
- Reports $80 million of adjusted EBITDA
- Achieves significant margin improvement in transportation and logistics
- Issues 2019 targets for $23 billion of revenue and $1.5 billion of EBITDA
XPO Logistics, Inc. (NYSE: XPO) today announced financial results for the second quarter of 2015, including 22 days of financial performance from the operations of Norbert Dentressangle SA. Total gross revenue increased 109.3% year-over-year to $1.2 billion, and net revenue increased 317.2% to $508.6 million.
On a GAAP basis, the company reported a net loss of $78.8 million for the quarter, compared with a net loss of $13.8 million for the same period in 2014. The net loss available to common shareholders was $75.1 million, or a loss of $0.89 per diluted share, compared with a net loss available to common shareholders of $14.5 million, or a loss of $0.28 per diluted share, for the same period in 2014.
On an adjusted basis, the net loss available to common shareholders, a non-GAAP measure, was $13.6 million, or a loss of $0.16 per share for the quarter, excluding the items detailed below. This compares with an adjusted net loss available to common shareholders of $11.6 million, or a loss of $0.22 per share, for the second quarter of 2014.
Adjusted net loss available to common shareholders for the second quarter of 2015 excludes: $78.8 million, or $62.6 million after-tax, of transaction and integration costs; $8.6 million, or $6.1 million after-tax, of debt commitment fees; $4.4 million, or $3.2 million after-tax, of rebranding costs; $0.4 million, or $0.3 million after-tax, of costs related to the conversion of the company's convertible senior notes; a $6.6 million benefit from reversing the non-controlling interests related to the adjustments; and a $5.7 million benefit, or $4.1 million after-tax, related to the gain on sale of intermodal equipment. Reconciliations of adjusted net loss available to common shareholders and adjusted EPS are provided in the attached financial tables.
Adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA"), a non-GAAP financial measure, improved to $79.7 million for the quarter, compared with $14.1 million for the same period in 2014. The acquisitions of Norbert Dentressangle and Bridge Terminal Transport accounted for $34.3 million of adjusted EBITDA. Adjusted EBITDA in the second quarter of 2015 excludes $78.8 million of transaction and integration costs; $4.4 million of non-controlling interests; $2.5 million of rebranding costs; and a $5.7 million benefit related to the gain on sale of intermodal equipment assets. Adjusted EBITDA in the quarter includes $4.6 million of non-cash share-based compensation. A reconciliation of adjusted EBITDA to net loss is provided in the attached financial tables.
The company had $1.2 billion of cash as of July 31, 2015.
Issues New Long-Term Targets
The company issued new long-term financial targets to reflect its expanded platform for global growth. For the full year 2019, the targets are:
- Revenue of approximately $23 billion; and
- EBITDA of approximately $1.5 billion.
CEO Comments
Brad Jacobs, chairman and chief executive officer of XPO Logistics, said, "We're continuing to grow the company at a rapid pace, well ahead of plan. In the second quarter, we more than doubled our gross revenue year-over-year, grew our net revenue four-fold, and increased adjusted EBITDA more than five-fold. These results included just 22 days of the Norbert Dentressangle acquisition and one month of Bridge Terminal Transport. The most notable organic contributions to EBITDA came from our businesses in truck brokerage, expedite and last mile, where we recently won a coveted e-commerce contract.
"The integration of Norbert Dentressangle is exceeding expectations, and the rebranding to XPO Logistics is moving along quickly. We've already begun to realize synergies between our operations. Next month, for example, we'll open a contract logistics facility in Pennsylvania to support a Spain-based retailer in expanding its U.S. footprint. Our European operations have served this customer for years - now it's an important new relationship for us in North America as well. And with last mile, our customers have been asking us to bring this expertise to Europe."
Jacobs continued, "We're in a strong position to act on acquisition opportunities on both sides of the Atlantic, with more than $1.2 billion in cash, an untapped ABL facility, and a highly integrated global platform. Our new trajectory puts us on track to nearly triple the size of our company in four years. We're now targeting approximately $23 billion of revenue and $1.5 billion of EBITDA in 2019."
Second Quarter 2015 Results by Segment
- Transportation: The company's transportation segment, which includes truck brokerage and intermodal, last mile, expedite, less than truckload, truckload, and global forwarding, generated total gross revenue of $861.2 million for the quarter, a 48.2% increase from the same period in 2014. The year-over-year increase in segment revenue was primarily due to the acquisition of Norbert Dentressangle, and to 4% organic growth, or an estimated 10% organic growth excluding the impact of lower fuel prices. Net revenue margin for the second quarter was 22.5%, compared with 21.0% in 2014. The increase in net revenue margin was primarily due to organic margin improvements in the truck brokerage, last mile and expedite businesses, and to the acquisitions of Norbert Dentressangle and Bridge Terminal Transport. Second quarter EBITDA for the segment improved to $52.1 million, compared with $27.9 million a year ago. Operating income improved to $23.0 million, compared with $3.2 million a year ago. The increases in EBITDA and operating income were largely due to improved performance by the company's truck brokerage, last mile and expedite businesses, and to the acquisition of Norbert Dentressangle. Transportation EBITDA and operating income reflect $5.9 million of transaction and integration costs. The company's European business contributed transportation gross revenue of $171.6 million, EBITDA of $8.4 million, and operating income of $1.9 million. A reconciliation of EBITDA to operating income for the transportation segment is provided in the attached financial tables.
- Logistics: The company's logistics segment, which provides contract logistics and related supply chain services, generated gross revenue of $359.6 million, net revenue of $314.0 million, EBITDA of $30.9 million and operating income of $4.3 million. Logistics EBITDA and operating income reflect $5.5 million of transaction and integration costs. The company's European business contributed logistics gross revenue of $177.4 million, net revenue of $133.0 million, EBITDA of $6.2 million and operating loss of $3.8 million. A reconciliation of EBITDA to operating income for the logistics segment is provided in the attached financial tables.
- Corporate: Corporate SG&A expense was $57.4 million, compared with $15.1 million for the second quarter of 2014. The increase was primarily due to an increase in restructuring, legal and acquisition-related transaction costs. Expense for the quarter includes: $39.8 million, or $33.8 million after-tax, of transaction and integration costs related to acquisitions; $1.9 million, or $1.3 million after-tax, of non-cash share-based compensation; and $1.4 million, or $1.1 million after-tax, of litigation costs.
Six Months 2015 Financial Results
For the six months ended June 30, 2015, the company reported total revenue of $1.9 billion, a 122.2% increase from the same period in 2014.
On a GAAP basis, the company reported a net loss of $93.2 million for the first six months, compared with a net loss of $42.1 million for the same period last year. The net loss available to common shareholders was $90.3 million, or a loss of $1.11 per diluted share, compared with a net loss of $43.6 million, or a loss of $0.92 per diluted share, for the same period in 2014.
On an adjusted basis, the net loss available to common shareholders, a non-GAAP measure, was $22.7 million, or a loss of $0.28 per share for the first six months, excluding the items detailed below. This compares with an adjusted net loss available to common shareholders of $25.3 million, or a loss of $0.54 per share, for the same period in 2014.
Adjusted net loss for the first six months of 2015 excludes $79.6 million, or $63.2 million after-tax, of transaction and integration costs; $8.6 million, or $6.1 million after-tax, of debt commitment fees; $6.9 million, or $5.5 million after-tax, of costs related to the conversion of the company's convertible senior notes; $4.9 million, or $3.5 million after-tax, of rebranding costs; a $6.6 million benefit from reversing the non-controlling interests related to the adjustments; and a $5.7 million benefit, or $4.1 million after-tax, related to the gain on sale of intermodal equipment assets. Reconciliations of adjusted net loss to common shareholders and adjusted EPS are provided in the attached financial tables.
Adjusted EBITDA for the first six months of 2015 improved to a gain of $109.3 million, compared with a gain of $14.8 million for the same period in 2014. Adjusted EBITDA for the first six months of 2015 excludes $79.6 million of transaction and integration costs; $4.4 million of non-controlling interests; $2.5 million of rebranding costs; and a $5.7 million benefit related to the gain on sale of intermodal equipment assets. Adjusted EBITDA for the first six months of 2015 includes $6.9 million of non-cash share-based compensation. A reconciliation of adjusted EBITDA to net loss is provided in the attached financial table.
Conference Call
The company will hold a conference call on Thursday, August 6, 2015, at 8:30 a.m. Eastern Time. Participants can call toll-free (from U.S./Canada) 1-800-708-4539; international callers dial +1-847-619-6396. A live webcast of the conference will be available on the investor relations area of the company's website, www.xpo.com/investors. The conference will be archived until September 5, 2015. 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 40169457.
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 EBITDA, in each case for the three- and six-month periods ended June 30, 2015 and 2014, and EBITDA for the Transportation and Logistics segments for the quarters ended June 30, 2015 and 2014. 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, including acquisition-related transaction and integration costs; debt commitment fees; costs related to the rebranding to XPO Logistics (including accelerated amortization of trade names); loss on the conversion of the company's convertible senior notes; impact of non-controlling interests; and gain on sale of intermodal equipment. 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 the nonrecurring expense items noted above. 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 measure 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 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 the company's full year 2019 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," "trajectory," "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 Norbert Dentressangle acquisition and other acquisitions, including the expected impact on XPO's results of operations; the ability to successfully integrate and realize anticipated synergies and cost savings with respect to Norbert Dentressangle and other 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 retention of Norbert Dentressangle's and other acquired companies' 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, Norbert Dentressangle's and other acquired companies' networks of third-party transportation providers; the ability to retain XPO's, Norbert Dentressangle's and other acquired companies' largest customers; rail and other network changes; weather, strikes, unionization efforts 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.
XPO Logistics, Inc. | |||||||||||
Condensed Consolidated Statements of Operations | |||||||||||
(Unaudited) | |||||||||||
(In millions, except per share data) | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||
Revenue | $ | 1,215.9 | $ | 581.0 | $ | 1,918.9 | $ | 863.4 | |||
Operating expenses | |||||||||||
Cost of transportation and services | 707.3 | 459.1 | 1,148.0 | 683.1 | |||||||
Direct operating expense | 318.3 | 27.2 | 469.5 | 31.2 | |||||||
Sales, general and administrative expense | 220.4 | 106.6 | 336.0 | 182.4 | |||||||
Total operating expenses | 1,246.0 | 592.9 | 1,953.5 | 896.7 | |||||||
Operating loss | (30.1) | (11.9) | (34.6) | (33.3) | |||||||
Other expense | 21.9 | 0.3 | 22.4 | 0.4 | |||||||
Interest expense | 36.3 | 3.4 | 59.4 | 13.5 | |||||||
Loss before income tax benefit | (88.3) | (15.6) | (116.4) | (47.2) | |||||||
Income tax benefit | (9.5) | (1.8) | (23.2) | (5.1) | |||||||
Net loss | (78.8) | (13.8) | (93.2) | (42.1) | |||||||
Cumulative preferred dividends | (0.7) | (0.7) | (1.5) | (1.5) | |||||||
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests |
4.4 | - | 4.4 | - | |||||||
Net loss available to common shareholders | $ | (75.1) | $ | (14.5) | $ | (90.3) | $ | (43.6) | |||
Basic loss per share | |||||||||||
Net loss | $ | (0.89) | $ | (0.28) | $ | (1.11) | $ | (0.92) | |||
Diluted loss per share | |||||||||||
Net loss | $ | (0.89) | $ | (0.28) | $ | (1.11) | $ | (0.92) | |||
Weighted average common shares outstanding | |||||||||||
Basic weighted average common shares outstanding | 84.3 | 52.6 | 81.6 | 47.0 | |||||||
Diluted weighted average common shares outstanding | 84.3 | 52.6 | 81.6 | 47.0 |
XPO Logistics, Inc. | |||||
Condensed Consolidated Balance Sheets | |||||
(In millions, except share and per share data) | |||||
June 30, | December 31, | ||||
2015 | 2014 | ||||
ASSETS | (Unaudited) | ||||
Current assets: | |||||
Cash and cash equivalents | $ | 1,175.8 | $ | 644.1 | |
Restricted cash, current | 690.5 | - | |||
Accounts receivable, net of allowances of $10.1 and $9.8, respectively | 1,673.2 | 543.8 | |||
Prepaid expenses | 109.1 | 13.2 | |||
Deferred tax asset, current | 22.3 | 9.2 | |||
Income tax receivable | 29.0 | 15.4 | |||
Other current assets | 194.4 | 7.4 | |||
Total current assets | 3,894.3 | 1,233.1 | |||
Property and equipment, net of $88.1 and $47.3 in accumulated depreciation, | |||||
respectively | 958.5 | 221.9 | |||
Goodwill | 3,391.8 | 929.3 | |||
Identifiable intangible assets, net of $113.4 and $74.6 in accumulated amortization, | |||||
respectively | 1,230.4 | 341.5 | |||
Deferred tax asset, long-term | 94.7 | - | |||
Restricted cash, long-term | 11.3 | 9.1 | |||
Other long-term assets | 121.7 | 26.3 | |||
Total long-term assets | 5,808.4 | 1,528.1 | |||
Total assets | $ | 9,702.7 | $ | 2,761.2 | |
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY | |||||
Current liabilities: | |||||
Accounts payable | $ | 1,030.0 | $ | 252.7 | |
Accrued salaries and wages | 304.8 | 50.1 | |||
Accrued expenses, other | 325.4 | 69.8 | |||
Current maturities of long-term debt | 365.2 | 1.8 | |||
Other current liabilities | 104.0 | 6.7 | |||
Total current liabilities | 2,129.4 | 381.1 | |||
Senior notes | 3,074.2 | 500.0 | |||
Convertible senior notes | 64.1 | 91.9 | |||
Revolving credit facility and other long-term debt, net of current maturities | 267.4 | 0.2 | |||
Deferred tax liability, long-term | 388.6 | 74.5 | |||
Employee benefit obligations | 127.5 | - | |||
Other long-term liabilities | 159.9 | 58.4 | |||
Total long-term liabilities | 4,081.7 | 725.0 | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 665.1 | - | |||
Stockholders' equity: | |||||
Series A convertible perpetual preferred stock, $.001 par value; 10,000,000 shares; | |||||
73,035 and 73,335 shares issued and outstanding at June 30, 2015 and December 31, | |||||
2014, respectively | 42.1 | 42.2 | |||
Series C convertible perpetual preferred stock, $.001 par value; 562,525 shares; | |||||
562,525 and 0 shares issued and outstanding at June 30, 2015 and December 31, | |||||
2014, respectively | 548.5 | - | |||
Common stock, $.001 par value; 150,000,000 shares authorized; 95,332,765 | |||||
and 77,421,683 shares issued and outstanding at June 30, 2015 and | |||||
December 31, 2014, respectively | 0.1 | 0.1 | |||
Additional paid-in capital | 2,551.8 | 1,831.9 | |||
Accumulated deficit | (309.5) | (219.1) | |||
Accumulated other comprehensive loss | (14.8) | - | |||
Noncontrolling interests | 8.3 | - | |||
Total stockholders' equity | 2,826.5 | 1,655.1 | |||
Total liabilities, redeemable noncontrolling interests and stockholders' equity | $ | 9,702.7 | $ | 2,761.2 |
XPO Logistics, Inc. | ||||||
Condensed Consolidated Statements of Cash Flows | ||||||
(Unaudited) | ||||||
(In millions) | ||||||
Six Months Ended June 30, | ||||||
2015 | 2014 | |||||
Operating activities | ||||||
Net loss | $ | (93.2) | $ | (42.1) | ||
Adjustments to reconcile net loss to net cash from operating activities | ||||||
Provisions for allowance for doubtful accounts | 2.5 | 3.2 | ||||
Depreciation and amortization | 89.9 | 36.5 | ||||
Stock compensation expense | 16.9 | 3.8 | ||||
Accretion of debt | 3.0 | 2.7 | ||||
Deferred tax expense | (31.2) | (7.1) | ||||
Loss on conversion of debt | 6.9 | 2.3 | ||||
Gain on sale of assets | (6.0) | - | ||||
Loss on foreign currency transactions | 11.1 | 0.1 | ||||
Other | 5.3 | (0.1) | ||||
Changes in assets and liabilities, net of effects of acquisitions: | ||||||
Accounts receivable | (10.7) | (57.3) | ||||
Income tax receivable | 17.1 | 2.4 | ||||
Prepaid expense and other current assets | (11.9) | (3.6) | ||||
Other long-term assets | (1.0) | (7.1) | ||||
Accounts payable | (22.8) | 37.8 | ||||
Accrued expenses and other liabilities | 0.9 | 1.8 | ||||
Cash flows provided (used) by operating activities | (23.2) | (26.7) | ||||
Investing activities | ||||||
Acquisition of businesses, net of cash acquired | (1,610.7) | (201.0) | ||||
Loss on forward contract related to acquisition | (6.9) | - | ||||
Payment for purchases of property and equipment | (41.9) | (9.8) | ||||
Proceeds from sale of assets | 24.3 | 0.3 | ||||
Cash flows used by investing activities | (1,635.2) | (210.5) | ||||
Financing activities | ||||||
Proceeds from common stock offerings | 697.5 | 414.0 | ||||
Proceeds from preferred stock offerings | 562.5 | - | ||||
Payment for equity issuance costs | (31.9) | (0.8) | ||||
Proceeds from issuance of senior notes | 2,544.0 | - | ||||
Payment for debt issuance costs | (7.9) | - | ||||
Repayment of borrowings on revolving credit facility | - | (75.0) | ||||
Repayment of acquired debt | (712.6) | - | ||||
Proceeds from asset financing debt | 11.2 | - | ||||
Payments of asset financing debt | (28.0) | - | ||||
Payment for cash held as collateral in lending arrangement | - | (8.5) | ||||
Receipt of cash held as collateral in lending arrangement | 4.8 | - | ||||
Payments of notes payable and capital leases | (18.6) | - | ||||
Bank overdrafts | (19.3) | - | ||||
Transfer to restricted cash for tender offer | (809.3) | - | ||||
Dividends paid to preferred stockholders | (1.5) | (1.5) | ||||
Other | (1.2) | (0.9) | ||||
Cash flows provided by financing activities | 2,189.7 | 327.3 | ||||
Effect of exchange rates on cash | 0.4 | - | ||||
Net increase in cash | 531.7 | 90.1 | ||||
Cash and cash equivalents, beginning of period | 644.1 | 21.5 | ||||
Cash and cash equivalents, end of period | $ | 1,175.8 | $ | 111.6 | ||
Supplemental disclosure of cash flow information: | ||||||
Cash paid for interest | $ | 48.9 | $ | 4.7 | ||
Cash received from income taxes | $ | (12.1) | $ | (0.3) | ||
Equity portion of acquisition purchase price | $ | 1.5 | $ | 108.2 | ||
Equity issued upon conversion of debt | $ | 33.5 | $ | 10.5 |
Transportation | |||||||||||||||||||||
Summary Financial Table | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2015 | 2014 | $ Variance | Change % | 2015 | 2014 | $ Variance | Change % | ||||||||||||||
Revenue | $ | 861.2 | $ | 581.0 | $ | 280.2 | 48.2% | $ | 1,423.5 | $ | 863.4 | $ | 560.1 | 64.9% | |||||||
Cost of transportation and services | 667.4 | 459.1 | 208.3 | 45.4% | 1,108.2 | 683.1 | 425.1 | 62.2% | |||||||||||||
Net revenue | 193.8 | 121.9 | 71.9 | 59.0% | 315.3 | 180.3 | 135.0 | 74.9% | |||||||||||||
Direct operating expense | 57.9 | 27.2 | 30.7 | 112.9% | 88.2 | 31.2 | 57.0 | 182.7% | |||||||||||||
SG&A expense | |||||||||||||||||||||
Salaries & benefits | 66.5 | 44.8 | 21.7 | 48.4% | 114.9 | 76.1 | 38.8 | 51.0% | |||||||||||||
Other SG&A expense | 16.3 | 17.2 | (0.9) | -5.2% | 30.5 | 26.9 | 3.6 | 13.4% | |||||||||||||
Purchased services | 7.5 | 5.5 | 2.0 | 36.4% | 13.3 | 8.1 | 5.2 | 64.2% | |||||||||||||
Depreciation & amortization | 22.6 | 24.0 | (1.4) | -5.8% | 41.7 | 34.7 | 7.0 | 20.2% | |||||||||||||
Total SG&A expense | 112.9 | 91.5 | 21.4 | 23.4% | 200.4 | 145.8 | 54.6 | 37.4% | |||||||||||||
Operating income | $ | 23.0 | $ | 3.2 | $ | 19.8 | 618.8% | $ | 26.7 | $ | 3.3 | $ | 23.4 | 709.1% | |||||||
Accelerated amortization of trade names | 0.3 | - | 0.3 | 100.0% | 0.4 | - | 0.4 | 100.0% | |||||||||||||
Other depreciation & amortization | 28.8 | 24.7 | 4.1 | 16.6% | 48.4 | 35.4 | 13.0 | 36.7% | |||||||||||||
EBITDA | $ | 52.1 | $ | 27.9 | $ | 24.2 | 86.7% | $ | 75.5 | $ | 38.7 | $ | 36.8 | 95.1% |
Transportation | ||||||||||||
Key Data by Service Offering | ||||||||||||
(Unaudited) | ||||||||||||
(In millions) | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
Revenue by Service Offering | ||||||||||||
North America | ||||||||||||
Brokerage and Intermodal | $ | 423.5 | $ | 388.4 | $ | 773.2 | $ | 533.0 | ||||
Last Mile | 169.8 | 105.9 | 303.8 | 193.0 | ||||||||
Expedite | 41.8 | 36.2 | 79.3 | 69.8 | ||||||||
Europe | ||||||||||||
Full Truckload | 117.6 | - | 117.6 | - | ||||||||
Less than Truckload | 54.0 | - | 54.0 | - | ||||||||
Global Forwarding | 58.0 | 53.8 | 101.4 | 73.3 | ||||||||
Eliminations | (3.5) | (3.3) | (5.8) | (5.7) | ||||||||
Total Revenue by Service Offering | $ | 861.2 | $ | 581.0 | $ | 1,423.5 | $ | 863.4 | ||||
Net Revenue by Service Offering | ||||||||||||
North America | ||||||||||||
Brokerage and Intermodal | $ | 80.2 | $ | 74.0 | $ | 145.1 | $ | 94.0 | ||||
Last Mile | 51.5 | 31.1 | 90.4 | 55.5 | ||||||||
Expedite | 13.5 | 11.2 | 26.2 | 22.5 | ||||||||
Europe | 40.0 | - | 40.0 | - | ||||||||
Global Forwarding | 8.6 | 5.6 | 13.6 | 8.3 | ||||||||
Total Net Revenue by Service Offering | $ | 193.8 | $ | 121.9 | $ | 315.3 | $ | 180.3 | ||||
Net Revenue % by Service Offering | ||||||||||||
North America | ||||||||||||
Brokerage and Intermodal | 18.9% | 19.1% | 18.8% | 17.6% | ||||||||
Last Mile | 30.3% | 29.4% | 29.8% | 28.8% | ||||||||
Expedite | 32.3% | 30.9% | 33.0% | 32.2% | ||||||||
Europe | 23.3% | 0.0% | 23.3% | 0.0% | ||||||||
Global Forwarding | 14.8% | 10.4% | 13.4% | 11.3% | ||||||||
Overall Net Revenue % by Service Offering | 22.5% | 21.0% | 22.1% | 20.9% | ||||||||
Direct Operating Expense by Service Offering | ||||||||||||
North America | ||||||||||||
Brokerage and Intermodal | $ | 24.4 | $ | 22.9 | $ | 46.6 | $ | 23.0 | ||||
Last Mile | 9.7 | 4.3 | 17.8 | 8.2 | ||||||||
Europe | 22.3 | - | 22.3 | - | ||||||||
Global Forwarding | 1.5 | - | 1.5 | - | ||||||||
Total Direct Operating Expense by Service Offering | $ | 57.9 | $ | 27.2 | $ | 88.2 | $ | 31.2 |
Logistics | |||||||||||||||||||||
Summary Financial Table | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2015 | 2014 | $ Variance | Change % | 2015 | 2014 | $ Variance | Change % | ||||||||||||||
Revenue | $ | 359.6 | $ | - | $ | 359.6 | 100.0% | $ | 500.4 | $ | - | $ | 500.4 | 100.0% | |||||||
Cost of transportation and services | 45.6 | - | 45.6 | 100.0% | 45.6 | - | 45.6 | 100.0% | |||||||||||||
Net revenue | 314.0 | - | 314.0 | 100.0% | 454.8 | - | 454.8 | 100.0% | |||||||||||||
Direct operating expense | 260.3 | - | 260.3 | 100.0% | 381.3 | - | 381.3 | 100.0% | |||||||||||||
SG&A expense | |||||||||||||||||||||
Salaries & benefits | 24.9 | - | 24.9 | 100.0% | 30.0 | - | 30.0 | 100.0% | |||||||||||||
Other SG&A expense | 6.2 | - | 6.2 | 100.0% | 7.9 | - | 7.9 | 100.0% | |||||||||||||
Purchased services | 3.5 | - | 3.5 | 100.0% | 4.1 | - | 4.1 | 100.0% | |||||||||||||
Depreciation & amortization | 14.8 | - | 14.8 | 100.0% | 20.8 | - | 20.8 | 100.0% | |||||||||||||
Total SG&A expense | 49.4 | - | 49.4 | 100.0% | 62.8 | - | 62.8 | 100.0% | |||||||||||||
Operating income | $ | 4.3 | $ | - | $ | 4.3 | 100.0% | $ | 10.7 | $ | - | $ | 10.7 | 100.0% | |||||||
Accelerated amortization of trade names | 1.6 | - | 1.6 | 100.0% | 2.0 | - | 2.0 | 100.0% | |||||||||||||
Other depreciation & amortization | 25.0 | - | 25.0 | 100.0% | 38.3 | - | 38.3 | 100.0% | |||||||||||||
EBITDA | $ | 30.9 | $ | - | $ | 30.9 | 100.0% | $ | 51.0 | $ | - | $ | 51.0 | 100.0% |
Logistics | |||||||||||
Key Data by Service Offering | |||||||||||
(Unaudited) | |||||||||||
(In millions) | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||
Revenue by Service Offering | |||||||||||
North America | $ | 182.2 | $ | - | $ | 323.0 | $ | - | |||
Europe | 177.4 | - | 177.4 | - | |||||||
Total Revenue by Service Offering | $ | 359.6 | $ | - | $ | 500.4 | $ | - | |||
Net Revenue by Service Offering | |||||||||||
North America | $ | 181.0 | $ | - | $ | 321.8 | $ | - | |||
Europe | 133.0 | - | 133.0 | - | |||||||
Total Net Revenue by Service Offering | $ | 314.0 | $ | - | $ | 454.8 | $ | - | |||
Net Revenue % by Service Offering | |||||||||||
North America | 99.3% | 0.0% | 99.6% | 0.0% | |||||||
Europe | 75.0% | 0.0% | 75.0% | 0.0% | |||||||
Overall Net Revenue % by Service Offering | 87.3% | 0.0% | 90.9% | 0.0% | |||||||
Direct Operating Expense by Service Offering | |||||||||||
North America | $ | 153.6 | $ | - | $ | 274.6 | $ | - | |||
Europe | 106.7 | - | 106.7 | - | |||||||
Total Direct Operating Expense by Service Offering | $ | 260.3 | $ | - | $ | 381.3 | $ | - |
XPO Corporate | |||||||||||||||||||||
Summary of Sales, General & Administrative Expense | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2015 | 2014 | $ Variance | Change % | 2015 | 2014 | $ Variance | Change % | ||||||||||||||
SG&A expense | |||||||||||||||||||||
Salaries & benefits | $ | 17.0 | $ | 7.0 | $ | 10.0 | 142.9% | $ | 24.4 | $ | 16.8 | $ | 7.6 | 45.2% | |||||||
Other SG&A expense | 8.5 | 1.8 | 6.7 | 372.2% | 10.7 | 5.4 | 5.3 | 98.1% | |||||||||||||
Purchased services | 31.5 | 5.7 | 25.8 | 452.6% | 36.1 | 13.3 | 22.8 | 171.4% | |||||||||||||
Depreciation & amortization | 0.4 | 0.6 | (0.2) | -33.3% | 0.8 | 1.1 | (0.3) | -27.3% | |||||||||||||
Total SG&A expense | $ | 57.4 | $ | 15.1 | $ | 42.3 | 280.1% | $ | 72.0 | $ | 36.6 | $ | 35.4 | 96.7% |
Reconciliation of Non-GAAP Measures | ||||||||||||||||
XPO Logistics, Inc. | ||||||||||||||||
Consolidated Reconciliation of Net Loss to EBITDA | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions) | ||||||||||||||||
Category | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2015 | 2014 | Change % | 2015 | 2014 | Change % | |||||||||||
Net loss available to common shareholders | Net loss available to common shareholders | $ | (75.1) | $ | (14.5) | 417.9% | $ | (90.3) | $ | (43.6) | 107.1% | |||||
Preferred dividends | Cumulative preferred dividends | (0.7) | (0.7) | 0.0% | (1.5) | (1.5) | 0.0% | |||||||||
Net loss | Net loss | (74.4) | (13.8) | 439.1% | (88.8) | (42.1) | 110.9% | |||||||||
Debt commitment fees | Interest expense | 8.6 | 0.1 | 8500.0% | 8.6 | 4.6 | 87.0% | |||||||||
Loss on conversion of convertible senior notes | Interest expense | 0.4 | - | 100.0% | 6.9 | 2.3 | 200.0% | |||||||||
Other interest expense | Interest expense | 27.3 | 3.3 | 727.3% | 43.9 | 6.6 | 565.2% | |||||||||
Income tax benefit | Income tax benefit | (9.5) | (1.8) | 427.8% | (23.2) | (5.1) | 354.9% | |||||||||
Accelerated amortization of trade names | Sales, general and administrative expense | 1.9 | 3.3 | -42.4% | 2.4 | 3.3 | -27.3% | |||||||||
Other depreciation expense | Cost of transportation and services | 5.2 | - | 100.0% | 5.3 | - | 100.0% | |||||||||
Other depreciation expense | Direct operating expense | 13.1 | 0.8 | 1537.5% | 21.3 | 0.8 | 2562.5% | |||||||||
Other depreciation & amortization expense | Sales, general and administrative expense | 35.9 | 21.2 | 69.3% | 60.9 | 32.4 | 88.0% | |||||||||
EBITDA | $ | 8.5 | $ | 13.1 | -35.1% | $ | 37.3 | $ | 2.8 | 1232.1% | ||||||
Noncontrolling interests | Net loss attributable to noncontrolling interests and redeemable noncontrolling interests | (4.4) | - | 100.0% | (4.4) | - | 100.0% | |||||||||
Transaction & integration costs | Other expense | 27.6 | - | 100.0% | 27.8 | - | 100.0% | |||||||||
Transaction & integration costs | Sales, general and administrative expense | 51.2 | 0.7 | 7214.3% | 51.8 | 11.7 | 342.7% | |||||||||
Gain on sale of intermodal equipment | Other expense | (5.7) | - | 100.0% | (5.7) | - | 100.0% | |||||||||
Rebranding costs | Sales, general and administrative expense | 2.5 | 0.3 | 733.3% | 2.5 | 0.3 | 733.3% | |||||||||
Adjusted EBITDA | $ | 79.7 | $ | 14.1 | 465.2% | $ | 109.3 | $ | 14.8 | 638.5% |
Note: Please refer to the "Non-GAAP Financial Measures" section of the press release. Adjusted EBITDA was prepared assuming 100% ownership of Norbert Dentressangle.
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 | |||||||||||
(Unaudited) | |||||||||||
(In millions, except per share data) | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||
GAAP net loss available to common shareholders | $ | (75.1) | $ | (14.5) | $ | (90.3) | $ | (43.6) | |||
Transaction & integration costs | 78.8 | 0.7 | 79.6 | 11.7 | |||||||
Debt commitment fees(1) | 8.6 | 0.1 | 8.6 | 4.6 | |||||||
Loss on conversion of convertible senior notes(1) | 0.4 | - | 6.9 | 2.3 | |||||||
Accelerated amortization of trade names | 1.9 | 3.3 | 2.4 | 3.3 | |||||||
Gain on sale of intermodal equipment | (5.7) | - | (5.7) | - | |||||||
Rebranding costs | 2.5 | 0.3 | 2.5 | 0.3 | |||||||
Impact of noncontrolling interests on above adjustments | (6.6) | - | (6.6) | - | |||||||
Tax impact of above adjustments | (18.4) | (1.5) | (20.1) | (3.9) | |||||||
Adjusted net loss available to common shareholders | $ | (13.6) | $ | (11.6) | $ | (22.7) | $ | (25.3) | |||
Adjusted basic loss per share | |||||||||||
Adjusted net loss | $ | (0.16) | $ | (0.22) | $ | (0.28) | $ | (0.54) | |||
Adjusted diluted loss per share | |||||||||||
Adjusted net loss | $ | (0.16) | $ | (0.22) | $ | (0.28) | $ | (0.54) | |||
Weighted average common shares outstanding | |||||||||||
Basic weighted average common shares outstanding | 84.3 | 52.6 | 81.6 | 47.0 | |||||||
Diluted weighted average common shares outstanding | 84.3 | 52.6 | 81.6 | 47.0 |
(1)Debt commitment fees and loss on conversion of convertible senior notes are 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 | |||||||
(Unaudited) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2015 | 2014 | 2015 | 2014 | ||||
Basic weighted-average common | |||||||
shares outstanding | 84,335,406 | 52,564,636 | 81,595,744 | 46,969,847 | |||
Potentially Dilutive Securities: | |||||||
Shares underlying the conversion | |||||||
of preferred stock to common stock | 10,451,861 | 10,476,430 | 10,464,078 | 10,489,784 | |||
Shares underlying the conversion | |||||||
of the convertible senior notes | 4,384,077 | 7,341,524 | 4,775,541 | 7,540,478 | |||
Shares underlying warrants to | |||||||
purchase common stock | 8,902,930 | 7,765,457 | 8,816,428 | 7,886,891 | |||
Shares underlying stock options | |||||||
to purchase common stock | 650,244 | 497,716 | 642,925 | 513,254 | |||
Shares underlying restricted stock units and performance-based restricted stock units | 1,177,131 | 714,896 | 1,103,458 | 657,583 | |||
25,566,243 | 26,796,023 | 25,802,430 | 27,087,990 | ||||
Diluted weighted-average common | |||||||
shares outstanding | 109,901,649 | 79,360,659 | 107,398,174 | 74,057,837 |
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, stock options, RSUs and PRSUs with an average closing market price of common stock of $46.89 per share and $26.41 per share for the three-months ended June 30, 2015 and 2014, respectively, and $44.43 per share and $27.61 per share for the six months ended June 30, 2015 and 2014, respectively.
For informational purposes, the following table represents fully diluted shares as of June 30, 2015, calculated on a non-weighted basis without giving effect to the portion of any period in which the diluted shares were outstanding. The Series C Convertible Perpetual Preferred Stock conversion into common stock has been included for informational purposes although conversion is contingent upon obtaining shareholder approval. The treasury method was used to determine the shares underlying the warrants, stock options, RSUs and PRSUs with a closing market price of common stock of $45.18 per share as of June 30, 2015. A non-weighted basis for calculating fully diluted shares is a non-GAAP financial measure as defined under SEC rules.
XPO Logistics, Inc. | |
Diluted Shares as of June 30, 2015 | |
Common stock outstanding | 95,332,765 |
Series A preferred stock | 10,440,715 |
Series C preferred stock | 12,500,546 |
Convertible senior notes | 4,384,017 |
Warrants | 8,904,160 |
Outstanding stock options | 671,810 |
Restricted stock units and performance-based restricted stock units | 2,011,264 |
Total | 134,245,278 |