GREENWICH, Conn. - February 18, 2015 - XPO Logistics, Inc. (NYSE: XPO) today announced financial results for the fourth quarter and full year 2014.
For the fourth quarter of 2014, total gross revenue increased 223.0% year-over-year to $830.7 million, and net revenue increased 463.8% to $299.4 million.
The company reported a net loss of $9.9 million for the quarter, compared with a net loss of $10.6 million for the same period in 2013. The net loss available to common shareholders was $51.5 million, or a loss of $0.77 per diluted share, compared with a net loss available to common shareholders of $11.3 million, or a loss of $0.37 per diluted share, for the same period in 2013. The net loss available to common shareholders for the 2014 period includes a $40.9 million non-cash accounting charge related to the beneficial conversion features of the company's previously announced $700 million equity private placement completed in September 2014.
The adjusted net loss available to common shareholders, a non-GAAP measure, was $6.5 million, or a loss of $0.10 per share for the quarter, excluding the items detailed below. This compares to an adjusted net loss available to common shareholders of $7.8 million, or a loss of $0.26 per share, in the fourth quarter of 2013.
Adjusted net loss available to common shareholders for the fourth quarter of 2014 excludes: a $40.9 million non-cash accounting charge related to the beneficial conversion features of the previously announced $700 million equity private placement; $3.1 million, before-tax and after-tax, of costs related to the conversions of the company's convertible senior notes; and $1.5 million, or $1.0 million after-tax, of transaction and integration costs primarily related to the 2014 acquisition of Pacer. 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 $42.0 million for the quarter, compared with $1.5 million for the same period in 2013. Adjusted EBITDA excludes $1.5 million of transaction and integration costs primarily related to the acquisition of Pacer; and includes $1.8 million of non-cash share-based compensation. A reconciliation of adjusted EBITDA to net loss is provided in the attached financial tables.
The company has approximately $1.5 billion in available capital, including approximately $1.1 billion in cash, as well as undrawn capacity on its asset-backed loan facility.
Provides 2015 Outlook and Reaffirms Long-Term Targets
The company provided the following financial targets for 2015:
• An annual revenue run rate of at least $5.25 billion by December 31;
• An annual EBITDA run rate of at least $300 million by December 31; and
• At least $1.5 billion of acquired historical annual revenue for the full year.
The company reaffirmed its financial targets for the full year 2017:
• Revenue of approximately $9.0 billion; and
• EBITDA of approximately $575 million.
CEO Comments
Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, "The fourth quarter was our strongest performance yet, with higher-than-expected EBITDA of $42 million and revenue of $831 million. We built broad-based momentum across our operations: company-wide organic growth of 39%, significant strength in our truck brokerage and contract logistics businesses, and a sales force focused on cross-selling our capabilities in the fastest-growing areas of logistics. Our infrastructure, which we put in place to support a much larger organization, is beginning to return significant operating leverage."
Jacobs continued, "We set high expectations for 2014 and we delivered. Now we're executing toward our 2015 targets of at least $5.25 billion of revenue run rate and $300 million of EBITDA run rate by year-end. We've opened two cold-starts in the last two months, and we recently completed our purchase of UX Specialized Logistics. We're primed to capitalize on our acquisition pipeline with $1.5 billion of fresh powder. We're ahead of plan, and we're still in the early stages of our growth."
Fourth Quarter 2014 Results by Segment
The company has aligned its reporting segments to its expanded service range, with details by business provided in the charts below.
• Transportation: The company's transportation segment, which includes truck brokerage, intermodal, last mile, expedited and freight forwarding, generated total gross revenue of $664.2 million for the quarter, a 158.2% increase from the same period in 2013. The year-over-year increase in revenue was primarily due to the acquisitions of Pacer and ACL, and 39% organic revenue growth. Net revenue margin for the fourth quarter was 20.0%, compared with 20.6% in 2013. The decrease was primarily due to the acquisitions of Pacer freight forwarding and ACL last mile operations, both of which have lower margins than the company's legacy businesses. Fourth quarter operating income improved to $10.7 million, compared with $3.1 million a year ago. The increase in operating income was largely due to improved performance by the company's truck brokerage and expedited businesses, and by the acquisitions of Pacer and NLM.
• Logistics: The company's logistics segment, which operates as New Breed Logistics, exceeded plan for the quarter, generating net revenue of $166.5 million and operating income of $13.1 million. Results were primarily driven by increased volume with retail customers. The acquisition of New Breed Logistics was completed on September 2, 2014.
• Corporate: Corporate SG&A expense was $17.8 million, compared with $11.6 million for the fourth quarter of 2013. The increase was primarily due to a reclassification of certain acquired employees to the Corporate segment, and transaction and integration costs related to acquisitions. Corporate SG&A for the quarter includes: $2.7 million, or $1.6 million after-tax, of transaction and integration costs related to acquisitions; $1.8 million, or $1.1 million after-tax, of non-cash share-based compensation; and $1.5 million, or $0.9 million after-tax, of litigation costs.
Expands Truck Brokerage and Freight Forwarding Networks with Cold-starts
The company opened a new truck brokerage location in Nashville, Tenn., on December 15, 2014; and opened a new freight forwarding location in Jacksonville, Fla., on January 2, 2015. The company intends to continue to open cold-starts in talent-rich areas as part of its strategy for growth.
Rebrands UX Specialized Logistics
The company announced the rebranding of the former UX Specialized Logistics (UX) operations as XPO Last Mile, following the previously-announced acquisition of UX on February 9, 2015. The transaction added approximately 700 employees and contracted capacity of over 1,600 independent carriers and installers to XPO, as well as relationships with blue chip retailers and e-tailers.
Full Year 2014 Financial Results
For the full year 2014, the company reported total revenue of $2.4 billion, a 235.6% increase from 2013.
Net loss for the year was $63.6 million, compared with a net loss of $48.5 million for 2013. The net loss available to common shareholders was $107.4 million, or a loss of $2.00 per diluted share, compared with a net loss available to common shareholders of $51.5 million, or a loss of $2.26 per diluted share, for 2013. The net loss available to common shareholders for 2014 includes a $40.9 million non-cash accounting charge related to the beneficial conversion features of the previously announced $700 million equity private placement completed in September 2014.
On an adjusted basis, the net loss available to common shareholders, a non-GAAP measure, was $33.0 million, or a loss of $0.62 per share for the year, excluding the items detailed below. This compares to an adjusted net loss available to common shareholders of $40.3 million, or a loss of $1.77 per share, for 2013.
Adjusted net loss available to common shareholders for 2014 excludes: a $40.9 million non-cash accounting charge related to the beneficial conversion features of the previously announced $700 million equity private placement; $23.6 million, or $16.3 million after-tax, of transaction and integration costs related primarily to the acquisitions of New Breed, Pacer and ACL; debt commitment fees of $14.4 million, or $8.9 million after-tax, related to the acquisitions of New Breed and Pacer; $5.5 million of costs related to the conversions of the company's convertible senior notes; $3.3 million, or $2.0 million after-tax, of accelerated amortization of trade names; and $1.2 million, or $0.8 million after-tax, of charges related to the rebranding of the company's ground expedited and last mile businesses. Reconciliations of adjusted net loss available to common shareholders and adjusted EPS are provided in the attached financial tables.
Adjusted EBITDA improved to a gain of $81.4 million for the full year 2014, compared with a loss of $25.5 million for 2013. Adjusted EBITDA excludes $23.6 million of transaction and integration costs related primarily to the acquisitions of New Breed, Pacer and ACL, and $1.2 million of charges related to the rebranding of the company's ground expedited and last mile businesses for 2014; and includes $7.5 million and $4.7 million of non-cash share-based compensation for 2014 and 2013, respectively. A reconciliation of adjusted EBITDA to net loss available to common shareholders is provided in the attached financial tables.
Full Year 2014 Operational Highlights
In 2014, XPO Logistics became the third largest freight brokerage firm in North America, the third largest provider of intermodal services, and a leading provider of highly engineered, technology-enabled contract logistics. In addition, the company:
• Tripled its annual revenue run rate year-over-year to more than $3 billion as of December 31, including 45% organic growth;
• Exceeded its annual EBITDA run rate target of approximately $150 million at year-end;
• Completed three strategic acquisitions: Pacer International, ACL and New Breed Logistics;
• Opened truck brokerage cold-starts in Kansas City, Mo.; Denver, Colo.; and Nashville, Tenn.; and opened a freight forwarding cold-start in Seattle, Wash.;
• Grew its truck brokerage cold-starts to an annual revenue run rate of more than $270 million;
• Increased over-the-road capacity to more than 4,100 trucks under contract to its drayage, expedited and last mile subsidiaries, with additional relationships with over 30,000 other carriers as of December 31, 2014;
• Increased critical mass to 197 locations and approximately 10,000 employees as of December 31, 2014;
• Rebranded its Express-1 expedited business as XPO Express, and rebranded its 3PD and Optima last mile businesses as XPO Last Mile; and
• Integrated its expedited operations - XPO Express, XPO NLM and XPO Air Charter- as one expedited group to serve customers more synergistically.
For the fourth quarter of 2014, total gross revenue increased 223.0% year-over-year to $830.7 million, and net revenue increased 463.8% to $299.4 million.
The company reported a net loss of $9.9 million for the quarter, compared with a net loss of $10.6 million for the same period in 2013. The net loss available to common shareholders was $51.5 million, or a loss of $0.77 per diluted share, compared with a net loss available to common shareholders of $11.3 million, or a loss of $0.37 per diluted share, for the same period in 2013. The net loss available to common shareholders for the 2014 period includes a $40.9 million non-cash accounting charge related to the beneficial conversion features of the company's previously announced $700 million equity private placement completed in September 2014.
The adjusted net loss available to common shareholders, a non-GAAP measure, was $6.5 million, or a loss of $0.10 per share for the quarter, excluding the items detailed below. This compares to an adjusted net loss available to common shareholders of $7.8 million, or a loss of $0.26 per share, in the fourth quarter of 2013.
Adjusted net loss available to common shareholders for the fourth quarter of 2014 excludes: a $40.9 million non-cash accounting charge related to the beneficial conversion features of the previously announced $700 million equity private placement; $3.1 million, before-tax and after-tax, of costs related to the conversions of the company's convertible senior notes; and $1.5 million, or $1.0 million after-tax, of transaction and integration costs primarily related to the 2014 acquisition of Pacer. 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 $42.0 million for the quarter, compared with $1.5 million for the same period in 2013. Adjusted EBITDA excludes $1.5 million of transaction and integration costs primarily related to the acquisition of Pacer; and includes $1.8 million of non-cash share-based compensation. A reconciliation of adjusted EBITDA to net loss is provided in the attached financial tables.
The company has approximately $1.5 billion in available capital, including approximately $1.1 billion in cash, as well as undrawn capacity on its asset-backed loan facility.
Provides 2015 Outlook and Reaffirms Long-Term Targets
The company provided the following financial targets for 2015:
• An annual revenue run rate of at least $5.25 billion by December 31;
• An annual EBITDA run rate of at least $300 million by December 31; and
• At least $1.5 billion of acquired historical annual revenue for the full year.
The company reaffirmed its financial targets for the full year 2017:
• Revenue of approximately $9.0 billion; and
• EBITDA of approximately $575 million.
CEO Comments
Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, "The fourth quarter was our strongest performance yet, with higher-than-expected EBITDA of $42 million and revenue of $831 million. We built broad-based momentum across our operations: company-wide organic growth of 39%, significant strength in our truck brokerage and contract logistics businesses, and a sales force focused on cross-selling our capabilities in the fastest-growing areas of logistics. Our infrastructure, which we put in place to support a much larger organization, is beginning to return significant operating leverage."
Jacobs continued, "We set high expectations for 2014 and we delivered. Now we're executing toward our 2015 targets of at least $5.25 billion of revenue run rate and $300 million of EBITDA run rate by year-end. We've opened two cold-starts in the last two months, and we recently completed our purchase of UX Specialized Logistics. We're primed to capitalize on our acquisition pipeline with $1.5 billion of fresh powder. We're ahead of plan, and we're still in the early stages of our growth."
Fourth Quarter 2014 Results by Segment
The company has aligned its reporting segments to its expanded service range, with details by business provided in the charts below.
• Transportation: The company's transportation segment, which includes truck brokerage, intermodal, last mile, expedited and freight forwarding, generated total gross revenue of $664.2 million for the quarter, a 158.2% increase from the same period in 2013. The year-over-year increase in revenue was primarily due to the acquisitions of Pacer and ACL, and 39% organic revenue growth. Net revenue margin for the fourth quarter was 20.0%, compared with 20.6% in 2013. The decrease was primarily due to the acquisitions of Pacer freight forwarding and ACL last mile operations, both of which have lower margins than the company's legacy businesses. Fourth quarter operating income improved to $10.7 million, compared with $3.1 million a year ago. The increase in operating income was largely due to improved performance by the company's truck brokerage and expedited businesses, and by the acquisitions of Pacer and NLM.
• Logistics: The company's logistics segment, which operates as New Breed Logistics, exceeded plan for the quarter, generating net revenue of $166.5 million and operating income of $13.1 million. Results were primarily driven by increased volume with retail customers. The acquisition of New Breed Logistics was completed on September 2, 2014.
• Corporate: Corporate SG&A expense was $17.8 million, compared with $11.6 million for the fourth quarter of 2013. The increase was primarily due to a reclassification of certain acquired employees to the Corporate segment, and transaction and integration costs related to acquisitions. Corporate SG&A for the quarter includes: $2.7 million, or $1.6 million after-tax, of transaction and integration costs related to acquisitions; $1.8 million, or $1.1 million after-tax, of non-cash share-based compensation; and $1.5 million, or $0.9 million after-tax, of litigation costs.
Expands Truck Brokerage and Freight Forwarding Networks with Cold-starts
The company opened a new truck brokerage location in Nashville, Tenn., on December 15, 2014; and opened a new freight forwarding location in Jacksonville, Fla., on January 2, 2015. The company intends to continue to open cold-starts in talent-rich areas as part of its strategy for growth.
Rebrands UX Specialized Logistics
The company announced the rebranding of the former UX Specialized Logistics (UX) operations as XPO Last Mile, following the previously-announced acquisition of UX on February 9, 2015. The transaction added approximately 700 employees and contracted capacity of over 1,600 independent carriers and installers to XPO, as well as relationships with blue chip retailers and e-tailers.
Full Year 2014 Financial Results
For the full year 2014, the company reported total revenue of $2.4 billion, a 235.6% increase from 2013.
Net loss for the year was $63.6 million, compared with a net loss of $48.5 million for 2013. The net loss available to common shareholders was $107.4 million, or a loss of $2.00 per diluted share, compared with a net loss available to common shareholders of $51.5 million, or a loss of $2.26 per diluted share, for 2013. The net loss available to common shareholders for 2014 includes a $40.9 million non-cash accounting charge related to the beneficial conversion features of the previously announced $700 million equity private placement completed in September 2014.
On an adjusted basis, the net loss available to common shareholders, a non-GAAP measure, was $33.0 million, or a loss of $0.62 per share for the year, excluding the items detailed below. This compares to an adjusted net loss available to common shareholders of $40.3 million, or a loss of $1.77 per share, for 2013.
Adjusted net loss available to common shareholders for 2014 excludes: a $40.9 million non-cash accounting charge related to the beneficial conversion features of the previously announced $700 million equity private placement; $23.6 million, or $16.3 million after-tax, of transaction and integration costs related primarily to the acquisitions of New Breed, Pacer and ACL; debt commitment fees of $14.4 million, or $8.9 million after-tax, related to the acquisitions of New Breed and Pacer; $5.5 million of costs related to the conversions of the company's convertible senior notes; $3.3 million, or $2.0 million after-tax, of accelerated amortization of trade names; and $1.2 million, or $0.8 million after-tax, of charges related to the rebranding of the company's ground expedited and last mile businesses. Reconciliations of adjusted net loss available to common shareholders and adjusted EPS are provided in the attached financial tables.
Adjusted EBITDA improved to a gain of $81.4 million for the full year 2014, compared with a loss of $25.5 million for 2013. Adjusted EBITDA excludes $23.6 million of transaction and integration costs related primarily to the acquisitions of New Breed, Pacer and ACL, and $1.2 million of charges related to the rebranding of the company's ground expedited and last mile businesses for 2014; and includes $7.5 million and $4.7 million of non-cash share-based compensation for 2014 and 2013, respectively. A reconciliation of adjusted EBITDA to net loss available to common shareholders is provided in the attached financial tables.
Full Year 2014 Operational Highlights
In 2014, XPO Logistics became the third largest freight brokerage firm in North America, the third largest provider of intermodal services, and a leading provider of highly engineered, technology-enabled contract logistics. In addition, the company:
• Tripled its annual revenue run rate year-over-year to more than $3 billion as of December 31, including 45% organic growth;
• Exceeded its annual EBITDA run rate target of approximately $150 million at year-end;
• Completed three strategic acquisitions: Pacer International, ACL and New Breed Logistics;
• Opened truck brokerage cold-starts in Kansas City, Mo.; Denver, Colo.; and Nashville, Tenn.; and opened a freight forwarding cold-start in Seattle, Wash.;
• Grew its truck brokerage cold-starts to an annual revenue run rate of more than $270 million;
• Increased over-the-road capacity to more than 4,100 trucks under contract to its drayage, expedited and last mile subsidiaries, with additional relationships with over 30,000 other carriers as of December 31, 2014;
• Increased critical mass to 197 locations and approximately 10,000 employees as of December 31, 2014;
• Rebranded its Express-1 expedited business as XPO Express, and rebranded its 3PD and Optima last mile businesses as XPO Last Mile; and
• Integrated its expedited operations - XPO Express, XPO NLM and XPO Air Charter- as one expedited group to serve customers more synergistically.
