GREENWICH, Conn. - February 24, 2016 - XPO Logistics, Inc. (NYSE: XPO) today announced financial results for the fourth quarter and full year of 2015. For the fourth quarter of 2015, total gross revenue increased 302.3% year-over-year to $3.3 billion, and net revenue increased 419.8% to $1.6 billion.
On a GAAP basis, the company reported a net loss of $63.1 million for the quarter, compared with a net loss of $9.9 million for the same period in 2014. The net loss attributable to common shareholders was $62.8 million, or a loss of $0.58 per diluted share, compared with a net loss attributable to common shareholders of $51.5 million, or a loss of $0.77 per diluted share, for the same period in 2014. The fourth quarter 2015 GAAP net loss includes $64.7 million of one-time after-tax transaction-related costs net of noncontrolling interests, and a $42.7 million non-cash after-tax amortization charges.
The adjusted net loss attributable to common shareholders, a non-GAAP measure, was $23.1 million, or a loss of $0.21 per share for the fourth quarter of 2015, excluding the items detailed below. This compares with an adjusted net loss attributable to common shareholders of $6.5 million, or a loss of $0.10 per share, for the fourth quarter of 2014.
The adjusted net loss attributable to common shareholders for the fourth quarter of 2015 excludes: $93.8 million, or $64.7 million after-tax, of one-time transaction-related costs net of noncontrolling interests; $2.0 million, or $1.7 million after-tax, of costs related to the conversion of convertible senior notes; a $12.5 million benefit due to the release of a tax valuation allowance; $12.0 million of unrealized foreign exchange benefit, net of tax; and a $3.5 million benefit, or $2.2 million after-tax, related to the gain on sale of intermodal equipment. Reconciliations of adjusted net loss attributable 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 $217.6 million for the quarter, compared with $42.0 million for the same period in 2014. Adjusted EBITDA in the fourth quarter of 2015 excludes $82.6 million of one-time transaction-related costs; and a $3.5 million benefit related to the gain on sale of intermodal equipment assets. A reconciliation of adjusted EBITDA to net loss is provided in the attached financial tables.
As of December 31, 2015, the company had approximately $290 million of cash and cash equivalents, and a $1 billion asset-backed revolver. Approximately 72% of the company's debt will mature in 2021 or later.
For 2016, the company reaffirmed its full year target of at least $1.25 billion of adjusted EBITDA.
For 2018, the company reaffirmed its full year target of approximately $1.7 billion of adjusted EBITDA. |
Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, "In the fourth quarter, we delivered organic adjusted EBITDA growth of 33%, and organic revenue growth of 8.4% ex-fuel. EBITDA growth in our transportation segment was led by our asset-light freight brokerage business, which continues to improve productivity through technology and the increasing tenure of our sales force. For freight brokerage, last mile, expedite and global forwarding combined, we grew organic net revenue margin by 280 basis points to 21.7%. In our logistics segment, we realized higher-than-expected EBITDA and operating income, led by our European logistics business. We're winning multi-year contracts with world-class customers in Europe, some of which can use our new last mile network. Globally, our transportation and logistics segments both have deep roots in e-commerce, the single biggest growth trend in retail.
"We completed the Con-way transaction one month into the quarter. The integration is going extremely well, and we've already taken out over $50 million of costs in annual savings in the first three months, while improving customer service levels. We're on track with our plan to deliver $170 million to $210 million of profit improvement within two years."
Jacobs continued, "Looking at 2016, we have a high-impact agenda that includes accelerated cross-selling, the strategic sourcing of nearly $3 billion of spend, the optimization of our purchased transportation, and the global integration of corporate services. These and other major initiatives give us the ability to grow the business across a range of economic conditions."
Fourth Quarter 2015 Results by Segment |
- Transportation: The company's transportation segment generated total gross revenue of $2.1 billion for the quarter, a 216.8% increase from the same period in 2014. The year-over-year increase in revenue was primarily due to the acquisitions of Norbert Dentressangle, Con-way, Bridge Terminal Transport, and UX Specialized Logistics, and to organic revenue growth led by the last mile and freight brokerage businesses.
Net revenue margin for the fourth quarter improved to 27.3%, compared with 20.0% in 2014. The increase in segment net revenue margin was primarily due to the acquisition of the less-than-truckload business, and to significant year-over-year margin improvements in all of the company's existing businesses, including freight brokerage, last mile, expedite and global forwarding. The improvements in existing operations were largely driven by better pricing, lower purchased transportation costs, and the shedding of unprofitable business.
Fourth quarter adjusted EBITDA for the segment improved to $151.4 million, compared with $31.6 million a year ago. Fourth quarter operating loss was $6.1 million, compared with operating income of $10.7 million a year ago. The increase in adjusted EBITDA primarily reflects the impact of acquisitions, as well as improved profitability led by freight brokerage. The decrease in operating income reflects non-cash depreciation and amortization expenses, as well as one-time transaction-related costs. A reconciliation of adjusted EBITDA to operating income for the transportation segment is provided in the attached financial tables. - Logistics: The company's logistics segment generated gross revenue of $1.3 billion, compared with $166.5 million from the same period in 2014. Gross margin was $166.4 million, up from $25.2 million a year ago. Adjusted EBITDA was $98.5 million, up from $26.0 million a year ago. Operating income for the fourth quarter was $34.8 million, versus $13.1 million a year ago.
In the logistics segment, the year-over-year increases in gross revenue and gross margin, adjusted EBITDA and operating income were primarily due to the 2015 acquisitions of Norbert Dentressangle and Con-way, as well as organic growth. Adjusted EBITDA and operating income were both higher than expected in the quarter, primarily due to operational improvements, strong demand from the retail and e-commerce sectors, and the shedding of unprofitable business. A reconciliation of adjusted EBITDA to operating income for the logistics segment is provided in the attached financial tables. - Corporate: Corporate SG&A expense was $66.6 million, compared with $17.8 million for the fourth quarter of 2014. The increase was largely due to one-time transaction-related costs, as well as higher incentive compensation, health insurance and legal costs.
Full Year 2015 Financial Results |
For the full year 2015, the company reported total revenue of $7.6 billion, a 223.5% increase from 2014.
On a GAAP basis, the company reported a net loss of $191.6 million for the full year 2015, compared with a net loss of $63.6 million last year. The net loss attributable to common shareholders was $245.9 million, or a loss of $2.65 per diluted share, compared with a net loss of $107.4 million, or a loss of $2.00 per diluted share, for 2014. The 2015 GAAP net loss includes: $165.2 million of one-time after-tax transaction-related costs net of noncontrolling interests; a $102.2 million non-cash after-tax amortization charges; and $52.0 million of non-cash accounting charges related to the beneficial conversion features of the $1.26 billion equity private placement in June 2015.
The adjusted net loss attributable to common shareholders, a non-GAAP measure, was $36.9 million, or a loss of $0.40 per share for 2015, excluding the items detailed below. This compares with an adjusted net loss attributable to common shareholders of $33.0 million, or a loss of $0.62 per share, for 2014.
Adjusted net loss attributable to common shareholders for 2015 excludes: $220.7 million, or $165.2 million after tax, of one-time transaction-related costs net of noncontrolling interests; $52 million of non-cash accounting charges related to the beneficial conversion features of the $1.26 billion equity private placement; $10.0 million, or $8.2 million after-tax, of costs related to the conversion of convertible senior notes; $2.4 million, or $1.5 million after-tax of accelerated amortization of trade names; $12.0 million of unrealized foreign exchange benefit, net of tax; and a $9.5 million benefit, or $5.9 million after-tax, related to the gain on sale of intermodal equipment. Reconciliations of adjusted net loss to common shareholders and adjusted EPS are provided in the attached financial tables.
Adjusted EBITDA for 2015 improved to $493.1 million, compared with $81.4 million for 2014. Adjusted EBITDA for 2015 excludes $201.0 million of one-time transaction-related costs; and a $9.5 million benefit related to the gain on sale of intermodal equipment assets. A reconciliation of adjusted EBITDA to net loss is provided in the attached financial tables.
About XPO Logistics, Inc. |
XPO Logistics, Inc. (NYSE: XPO) is a top ten global provider of cutting-edge supply chain solutions to the most successful companies in the world. The company provides services for truckload brokerage and transportation, last mile logistics, engineered supply chain solutions, high-value-add warehousing and distribution, ground and air expedite, less-than-truckload transportation, intermodal, drayage, managed transportation and global forwarding. XPO serves more than 50,000 customers with a highly integrated network of over 89,000 employees and 1,443 locations in 33 countries. XPO's corporate headquarters is in Greenwich, Conn., USA, and its European headquarters is in Lyon, France. www.xpo.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 adjusted net loss attributable to common shareholders, adjusted diluted loss per share ("EPS"), and adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA"), in each case for the three- and twelve-month periods ended December 31, 2015 and 2014, and earnings before interest, taxes, deprecation and amortization ("EBITDA") for the Transportation and Logistics segments for the quarters ended December 31, 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 attributable to common shareholders and adjusted diluted loss per share improves comparability from period to period by removing the impact of nonrecurring expense items, including preferred stock beneficial conversion charge, 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) 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 document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including the expected maturity of the company's debt, the expected customer interest in our last mile network in Europe, the expected ability to integrate operations, cross-sell services, realize cost savings, synergies and profit improvement opportunities, expected market trends and growth, the expected performance of our business units in economic downturns and our 2016 and 2018 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," "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 and pricing pressure; the expected impact of recent acquisitions and the related financing, including the expected impact on XPO's results of operations; XPO's ability to successfully integrate and realize anticipated synergies, cost savings and profit improvement opportunities; XPO's ability to attract and retain key employees to execute its growth strategy; litigation, including litigation related to alleged misclassification of independent contractors; the ability to develop and implement suitable information technology systems; the ability to maintain positive relationships with XPO's networks of third-party transportation providers; XPO's ability to attract and retain qualified drivers; XPO's ability to retain and add customers; XPO's ability to find suitable acquisition candidates and execute its acquisition strategy; XPO's ability to raise debt and equity capital; fuel price or fuel surcharge changes; rail and other network changes; labor matters; weather and other service disruptions; and governmental regulation. All forward-looking statements set forth in this document are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, XPO 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. |
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