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XPO Logistics Announces First Quarter 2014 Results

Reports 51% organic growth company-wide

Raises estimate for cost synergies from Pacer integration to $15 million

Opens freight brokerage cold-start in Kansas City

Reaffirms full year 2014 guidance

GREENWICH, Conn. - May 1, 2014 - XPO Logistics, Inc. (NYSE: XPO) today announced financial results for the first quarter of 2014. Total gross revenue increased 147.7% year-over-year to $282.4 million. Net revenue increased 259.1% to $58.4 million.[1]

The company reported a net loss of $28.1 million for the quarter, compared with a net loss of $14.5 million for the same period in 2013. The net loss available to common shareholders was $28.9 million, or a loss of $0.70 per diluted share, compared with a net loss of $15.3 million, or a loss of $0.85 per diluted share, for the same period in 2013. The company's first quarter 2014 results reflect: $10.8 million, or $7.5 million after-tax, of transaction and integration costs related to the acquisition of Pacer International, Inc.; $4.5 million, or $3.7 million after-tax, for a commitment fee related to an undrawn debt funding option for the Pacer transaction; and $2.3 million, before-tax and after-tax, related to conversions of the company's convertible senior notes.

Earnings (loss) before interest, taxes, depreciation and amortization ("EBITDA"), a non-GAAP financial measure, was a loss of $10.1 million for the quarter, compared with a loss of $9.8 million for the same period in 2013. EBITDA for the first quarter reflects $1.4 million and $1.1 million of non-cash share-based compensation for 2014 and 2013, respectively. Excluding $10.8 million of transaction and integration costs related to the Pacer acquisition, adjusted EBITDA for the first quarter of 2014 was $678,000. Reconciliations of EBITDA and adjusted EBITDA to net income are provided in the attached financial tables.

The company had approximately $157 million of cash, including $13 million of restricted cash, as of March 31, 2014, immediately following its acquisition of Pacer.

[1] Effective 2014, the company began reporting Net Revenue and Net Revenue Margin, instead of the equivalent Gross Margin and Gross Margin Percentage, to accommodate GAAP accounting for direct operating costs associated primarily with its acquired intermodal operations.

Reaffirms Full Year Financial Targets

The company reaffirmed its full year 2014 targets for an annual revenue run rate of at least $2.75 billion and an annual EBITDA run rate of at least $100 million by December 31. The company expects to acquire at least $400 million of historical annual revenue in 2014, excluding the Pacer acquisition.

CEO Comments

Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, "In the first quarter, we increased our revenue to $282 million - significantly more than expected - including notable year-over-year organic growth of 51%. Our 11 brokerage cold-starts, including our newest branch in Kansas City, are on a combined revenue run rate of $190 million, nearly triple the rate of 12 months ago. Our employee productivity metrics are on the rise, and our strategic accounts team signed 33 new major accounts in the quarter.

"Our expedited business, which benefited from weather-related supply chain disruptions, increased first quarter profitability fivefold from a year ago. This included the impact of our online portal XPO NLM, which we purchased in December: XPO NLM managed over 130,000 expedited loads in the first quarter, a 47% increase in volume from a year ago. We increased freight forwarding revenue by more than 20% year-over-year, and improved our brokerage margin by 90 basis points, excluding the benefit of last-mile margin. We capped the quarter with our purchase of Pacer International on March 31.

"The integration of Pacer is going extremely well. We've already unified our sales force, and we have many large intermodal bids in the pipeline. We moved the former Pacer truck brokerage operation onto our proprietary Freight Optimizer technology, giving them access to our network of over 26,000 carriers. And we've made great progress at right-sizing costs in technology, real estate, sales and administrative functions. We acted quickly to reverse the losses in Pacer's logistics business by closing 10 underperforming locations and consolidating six duplicative offices in the U.S., Asia and Europe. The remaining locations have become part of our XPO Global Logistics freight forwarding network. We now expect to capture about $15 million of cost synergies - three times our original estimate - while expanding services to our customers."

Jacobs continued, "Excluding the costs associated with the acquisition of Pacer, this was our second straight quarter of positive EBITDA. We're on track to meet our target run rate of $100 million of EBITDA by year-end 2014, and approximately $425 million of EBITDA in 2017 on revenue of $7.5 billion."  

First Quarter 2014 Results by Business Unit

  • Freight brokerage: The company's freight brokerage business generated total gross revenue of $231.7 million for the quarter, a 196.2% increase from the same period in 2013. Net revenue margin1 was 19.1%, compared with 12.9% in 2013, an improvement of 620 basis points. The year-over-year increases in revenue and margin for the quarter were primarily due to the acquisition of high-margin last-mile logistics providers 3PD and Optima Service Solutions in 2013, 75% organic revenue growth, and continued margin improvement.  Excluding the benefit of last-mile margin, freight brokerage net revenue margin improved 90 basis points, compared with 2013. The increase in net revenue was offset by higher intangible asset amortization related to acquisitions, and by the company's strategic investments in sales and procurement personnel over the trailing 12 months. First quarter operating income was a loss of $4.0 million, compared with a loss of $3.8 million a year ago.
  • Expedited transportation: The company's expedited transportation business generated total gross revenue of $33.8 million for the quarter, a 41.6% increase from the same period in 2013. Net revenue margin was 33.6%, compared with 15.9% in 2013, an improvement of 1,770 basis points. The year-over-year increase in net revenue margin primarily reflects the acquisition of managed transportation expeditor NLM, which generated $6.4 million of gross revenue and net revenue in the first quarter. Excluding NLM, expedited net revenue margin improved, driven largely by higher revenue per mile. First quarter operating income was $3.7 million, compared with $753,000 a year ago, primarily reflecting the positive impact of NLM and significant organic margin improvement.
  • Freight forwarding: The company's freight forwarding business generated total gross revenue of $19.5 million for the quarter, a 20.2% increase from the same period in 2013. Net revenue margin was 13.9%, compared with 14.7% in 2013. The decrease in net revenue margin was primarily due to an increase in international shipments, which typically generate higher revenue, but at a lower margin, than domestic shipments. First quarter operating income was $552,000, a 48.4% increase year-over-year.
  • Corporate: Corporate SG&A expense for the first quarter of 2014 was $21.7 million, compared with $8.7 million for the first quarter of 2013. Corporate SG&A includes: $6.4 million, or $5.3 million after-tax, of integration charges related to the acquisition of Pacer; $4.6 million, or $4.1 million after-tax, of acquisition-related transaction costs primarily related to Pacer; and $1.2 million, or $1.0 million after-tax, of litigation costs.

Raises Estimate for Cost Synergies from Pacer Integration to $15 Million

The company increased its target for cost synergies related to the integration of Pacer International, Inc., acquired March 31, 2014. The company now expects to realize approximately $15 million of synergies.

Opens Freight Brokerage Cold-start in Kansas City

On March 31, 2014, the company opened a cold-start location in Kansas City, Mo., as part of a planned organic expansion of its freight brokerage footprint. The branch is the company's eleventh freight brokerage cold-start.

Conference Call

The company will hold a conference call on Friday, May 2, 2014, 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.xpologistics.com/investors. The conference will be archived until June 1, 2014. To access the replay by phone, call toll-free (from U.S./Canada) 1-888-843-7419; international callers dial +1-630-652-3042. Use participant passcode 37094021.

About XPO Logistics, Inc.  

XPO Logistics, Inc. (NYSE: XPO) is one of the fastest growing providers of transportation logistics services in North America: the fourth largest freight brokerage firm, the third largest provider of intermodal services, the largest provider of last-mile logistics for heavy goods, and the largest manager of expedited shipments, with growing positions in managed transportation, global freight forwarding and less-than-truckload brokerage. The company facilitates more than 25,000 deliveries a day throughout the U.S., Mexico and Canada.

XPO Logistics has 123 locations and approximately 3,000 employees. Its three business segments - freight brokerage, expedited transportation and freight forwarding - utilize relationships with ground, rail, sea and air carriers to serve over 14,000 customers in the manufacturing, industrial, retail, commercial, life sciences and government sectors. The company has more than 1,000 owner-operator trucks under contract to its drayage and expedited subsidiaries, and has access to additional capacity through its relationships with over 26,000 other carriers.  For more information: www.xpologistics.com

Explanatory Note Regarding Impact of Pacer Acquisition

The company acquired Pacer International, Inc. on March 31, 2014.  Accordingly, the company's financial statements for the first quarter of 2014 do not include any results of operations for Pacer. However, the balance sheet for Pacer is reflected in the company's consolidated balance sheets as of March 31. 

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") and adjusted EBITDA for the quarters ended March 31, 2014 and 2013. 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 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, in the case of adjusted EBITDA, non-recurring costs related to the Pacer acquisition. 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 measures 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 supplemental measures 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 2014 and full year 2017 financial targets and expected cost synergies from the Pacer integration. 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 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 acquisitions, including the expected impact on XPO's results of operations; XPO's ability to raise debt and equity capital; 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 a suitable information technology system; the ability to maintain positive relationships with XPO's networks of third-party transportation providers; the ability to retain XPO's and acquired businesses' largest customers; XPO's ability to successfully integrate acquired businesses and realize anticipated synergies and cost savings; rail and other network changes; weather 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.

Investor Contact:
XPO Logistics, Inc.
Tavio Headley, +1-203-930-1602
tavio.headley@xpologistics.com
Media Contacts:
Brunswick Group
Gemma Hart, Darren McDermott, +1-212-333-3810

XPO Logistics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
       
  Three Months Ended  
  March 31,  
  2014   2013   
       
Revenue $ 282,403   $ 113,999  
Operating expenses       
       Cost of purchased transportation and services   224,006    97,739  
       Direct operating expense   3,880               -    
       Sales, general and administrative expense   75,878    27,627  
              Total operating expenses 303,764   125,366  
Operating loss (21,361)   (11,367)  
       Other expense (income)   15    (109)  
       Interest expense 10,058   3,064  
Loss before income tax provision   (31,434)    (14,322)  
       Income tax (benefit) provision (3,299)   222  
Net loss   (28,135)    (14,544)  
       Cumulative preferred dividends   (742)    (743)  
Net loss available to common shareholders $ (28,877)   $ (15,287)  
       
Basic loss per share       
       Net loss $ (0.70)   $ (0.85)  
Diluted loss per share       
       Net loss $ (0.70)   $ (0.85)  
Weighted average common shares outstanding       
       Basic weighted average common shares outstanding   41,313    18,032  
       Diluted weighted average common shares outstanding   41,313    18,032  

XPO Logistics, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
      
  March 31,   December 31,
  2014   2013
  (Unaudited)    
ASSETS     
Current assets:      
  Cash and cash equivalents $                143,886   $                  21,524
  Accounts receivable, net of allowances of $5,066 and $3,539, respectively                  342,752                   134,227
  Prepaid expenses                      8,515                       3,935
  Deferred tax asset, current                      6,182                       3,041
  Other current assets                  10,869                      7,304
    Total current assets                512,204                  170,031
      
  Property and equipment, net of $15,658 and $11,803      
  in accumulated depreciation, respectively                    98,819    56,571
  Goodwill   539,168    363,448
  Identifiable intangible assets, net of $22,722 and $15,411      
  in accumulated amortization, respectively   250,203    185,179
  Deferred tax asset, long-term                        511                           72
  Restricted cash                    13,332                       2,141
  Other long-term assets 9,518   2,799
   Total long-term assets                911,551                  610,210
    Total assets $             1,423,755   $                780,241
      
      
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
  Accounts payable $ 227,738   $ 71,391
  Accrued salaries and wages   19,257    11,741
  Accrued expenses, other   45,947    9,489
  Current maturities of long-term debt   1,777    2,028
  Other current liabilities 6,486   4,684
    Total current liabilities                301,205                    99,333
      
  Convertible senior notes                    99,844                   106,268
  Revolving credit facility and other long-term debt, net of current maturities                        470                     75,373
  Deferred tax liability, long-term                    24,793                     15,200
  Other long-term liabilities                  32,663                    28,224
    Total long-term liabilities                157,770                  225,065
      
 Commitments and contingencies      
      
Stockholders' equity:      
 Preferred stock, $.001 par value; 10,000,000 shares;      
   73,335 and 74,175 shares issued and outstanding, respectively                    42,258                     42,737
  Common stock, $.001 par value; 150,000,000 shares authorized;      
  52,570,800 and 30,583,073 shares issued, respectively;      
  and 52,525,800 and 30,538,073 shares outstanding, respectively                          53                           30
  Additional paid-in capital               1,063,242                   524,972
  Treasury stock, at cost, 45,000 shares held                       (107)                        (107)
  Accumulated deficit               (140,666)                 (111,789)
    Total stockholders' equity 964,780                  455,843
      Total liabilities and stockholders' equity $ 1,423,755   $                780,241

XPO Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
       
   Three Months Ended
   March 31,
   2014    2013
Operating activities      
 Net loss $ (28,135)   $ (14,544)
Adjustments to reconcile net loss to net cash from operating activities      
  Provisions for allowance for doubtful accounts   2,196    231
  Depreciation and amortization   11,273    1,554
  Stock compensation expense   2,206    1,097
  Accretion of debt   1,430    1,438
  Other   2,062    (211)
Changes in assets and liabilities, net of effects of acquisitions:      
  Accounts receivable   (56,414)    (9,771)
  Deferred tax expense   (4,529)    135
  Income tax payable   2,298    (814)
  Prepaid expense and other current assets   114    (62)
  Other long-term assets   (96)    (2)
  Accounts payable   48,676    (3,417)
  Accrued expenses and other liabilities   10,177    (3,659)
       
Cash flows used by operating activities (8,742)   (28,025)
Investing activities      
  Acquisition of businesses, net of cash acquired   (190,962)    (16,560)
  Payment for purchases of property and equipment   (3,935)    (1,081)
  Other   246                   125
Cash flows used by investing activities (194,651)   (17,516)
Financing activities      
  Repayment of borrowings on revolving debt facility   (75,000)                     -  
  Proceeds from stock offering, net   413,183                     -  
  Payment for cash held as collateral in lending arrangement   (11,269)                     -  
  Dividends paid to preferred stockholders   (742)    (743)
  Other   (417)    173
Cash flows provided (used) by financing activities 325,755   (570)
       
Net increase (decrease) in cash   122,362    (46,111)
Cash and cash equivalents, beginning of period 21,524   252,293
Cash and cash equivalents, end of period $ 143,886   $ 206,182
       
Supplemental disclosure of cash flow information:      
       
  Cash paid for interest $ 4,287   $ 3,328
  Cash (received) paid for income taxes $ (1,507)   $ 732
  Equity portion of acquisition purchase price $ 108,815   $ 2,573

Freight Brokerage
Summary Financial Table
(Unaudited)
(In thousands)
           
  Three Months Ended March 31,
  2014    2013    $ Variance       Change %
              
Revenue $ 231,689   $ 78,230   $ 153,459   196.2%
Cost of purchased transportation and services   187,372    68,164    119,208   174.9%
    Net revenue 44,317   10,066   34,251   340.3%
Direct operating expense   3,880              -      3,880   100.0%
SG&A expense           
  Salaries & benefits   25,526    10,163    15,363   151.2%
  Other SG&A expense   7,841    1,895    5,946   313.8%
  Purchased services   2,072    814    1,258   154.5%
  Depreciation & amortization   8,993    1,014    7,979   786.9%
Total SG&A expense 44,432   13,886   30,546   220.0%
Operating loss $ (3,995)   $ (3,820)   $ (175)   4.6%

Freight Brokerage
Key Data
(In thousands, except personnel data)
      
      
   3 Mos Ended    3 Mos Ended
   March 31,    March 31,
  2014   2013
Revenue      
   Truckload, LTL, and Intermodal $            144,585   $              78,230
   Last Mile                87,104                        -  
Total Revenue $            231,689   $              78,230
      
Net Revenue      
   Truckload, LTL, and Intermodal $              19,921   $              10,066
   Last Mile                24,396                        -  
Total Net Revenue $              44,317   $              10,066
      
Net Revenue %      
   Truckload, LTL, and Intermodal   13.8%    12.9%
   Last Mile   28.0%                        -  
Overall Net Revenue % 19.1%   12.9%
      
Freight Brokerage personnel (end of period)                  2,331    668

Note: Employee totals are as of period end, and primarily include the positions of shipper sales, carrier procurement and brokerage operations, and reflect the impact of recruitment and acquisitions.

Expedited Transportation
Summary Financial Table
(Unaudited)
(In thousands)
           
  Three Months Ended March 31,
  2014    2013    $ Variance       Change %
           
Revenue $ 33,810    $ 23,875   $ 9,935   41.6%
Cost of purchased transportation and services   22,442    20,067    2,375   11.8%
    Net revenue 11,368   3,808   7,560   198.5%
SG&A expense           
  Salaries & benefits   4,154    1,945    2,209   113.6%
  Other SG&A expense   1,456    604    852   141.1%
  Purchased services   434    289    145   50.2%
  Depreciation & amortization   1,578    217    1,361   627.2%
Total SG&A expense 7,622   3,055   4,567   149.5%
Operating income $ 3,746   $ 753   $ 2,993   397.5%

Note: Total depreciation and amortization for the Expedited Transportation reportable segment included in both direct expense and SG&A, was $1,612,000 and $268,000 for the three-months ended March 31, 2014 and 2013, respectively.

Freight Forwarding
Summary Financial Table
(Unaudited)
(In thousands)
           
  Three Months Ended March 31,
  2014    2013    $ Variance       Change %
           
Revenue $ 19,506   $ 16,233   $ 3,273   20.2%
Cost of purchased transportation and services   16,793    13,847    2,946   21.3%
    Net revenue 2,713   2,386   327   13.7%
SG&A expense           
  Salaries & benefits   1,635    1,433    202   14.1%
  Other SG&A expense   349    403    (54)   -13.4%
  Purchased services   77    90    (13)   -14.4%
  Depreciation & amortization   100    88    12   13.6%
Total SG&A expense 2,161   2,014   147   7.3%
Operating income $ 552   $ 372   $ 180   48.4%

XPO Corporate
Summary of Sales, General & Administrative Expense
(Unaudited)
(In thousands)
           
  Three Months Ended March 31,
  2014   2013   $ Variance       Change %
SG&A expense                    
 Salaries & benefits $ 9,844   $ 4,507   $ 5,337   118.4%
 Other SG&A expense   3,620    1,359    2,261   166.4%
 Purchased services   7,632    2,622    5,010   191.1%
 Depreciation &
 amortization
  568    184    384   208.7%
Total SG&A expense $ 21,664   $ 8,672   $ 12,992   149.8%

Note: Intercompany eliminations included revenue of $2.6 million and $4.3 million for the three-months ended March 31, 2014 and 2013, respectively.

Reconciliation of Non-GAAP Measures
XPO Logistics, Inc.
Consolidated Reconciliation of EBITDA to Net Loss
(In thousands)
        
  Three Months Ended
  March 31,
  2014   2013      Change %
        
Net loss available to common shareholders $ (28,877)    $ (15,287)    88.9%
Preferred dividends (742)   (743)   -0.1%
Net loss (28,135)   (14,544)   93.4%
Interest expense   10,058    3,064   228.3%
Income tax benefit   (3,299)    222   -1586.0%
Depreciation and amortization 11,273   1,502   650.5%
EBITDA $ (10,103)   $ (9,756)   3.6%
Pacer transaction and restructuring costs   (10,781)               -     100.0%
Adjusted EBITDA $ 678   $ (9,756)   -106.9%

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
   March 31, 2014   March 31, 2013
Basic common stock outstanding 41,312,894   18,031,926
    
Potentially Dilutive Securities:    
Shares underlying the conversion 10,503,286   10,610,714
 of preferred stock to common stock    
Shares underlying the conversion                    7,741,643                      8,749,239
 of the convertible senior notes    
Shares underlying  warrants to 8,004,967   6,342,298
 purchase common stock    
Shares underlying  stock options 529,385   550,611
 to purchase common stock    
Shares underlying  restricted stock units 565,825   414,088
  27,345,106   26,666,950
   
Diluted weighted shares outstanding 68,658,000   44,698,876

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 common stock of $28.85 per share and $17.15 per share for the three months ended March 31, 2014 and 2013, respectively.

For informational purposes, the following table represents fully diluted shares as of March 31, 2014, calculated on a non-weighted basis without giving effect to the portion of any period in which the diluted shares were outstanding. The dilutive effect of the warrants, options and RSUs in the table was calculated using the closing market price of common stock on March 31, 2014. 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 March 31, 2014
 
Common stock outstanding 52,525,800
Preferred stock 10,476,430
Convertible senior notes 7,341,643
Warrants 8,053,888
Outstanding stock options 648,459
Restricted stock units 1,577,972
Total 80,624,192

XPO Logistics, Inc.
Prior Period Results Conformed to 2014 Presentation
Consolidated Statements of Operations
(In thousands)
                      
AS REPORTED    For the    For the    For the
    Year Ended    Three Months Ended    Year Ended
   December 31, 2011   December 31, 2012   March 31, 2013   June 30, 2013   September 30, 2013   December 31, 2013   December 31, 2013
Revenue   $ 177,076   $ 278,591   $ 113,999   $ 137,091   $ 193,982   $ 257,231   $ 702,303
Direct expense                      
       Transportation services    133,007    224,035    94,880    114,924    156,446    201,555    567,805
       Station commissions    11,098    9,321    1,708    1,992    1,706    1,762    7,168
       Other direct expense    3,193    4,409    1,151    835    995    842    3,823
Total direct expense   147,298   237,765   97,739   117,751   159,147   204,159   578,796
              Gross margin   29,778   40,826   16,260   19,340   34,835   53,072   123,507
SG&A expense                      
       Salaries & benefits    16,338    39,278    18,048    20,491    27,065    35,029    100,633
       Other SG&A expense    3,937    11,616    4,262    5,198    9,521    10,377    29,358
       Purchased services    6,733    15,388    3,815    5,914    8,311    7,174    25,214
       Depreciation and amortization    1,046    2,508    1,502    1,752    8,357    9,016    20,627
Total SG&A expense   28,054   68,790   27,627   33,355   53,254   61,596   175,832
Operating income (loss)   $ 1,724   $ (27,964)   $ (11,367)   $ (14,015)   $ (18,419)   $ (8,524)   $ (52,325)
                      
                      
AS CONFORMED    For the    For the    For the
    Year Ended    Three Months Ended    Year Ended
   December 31, 2011   December 31, 2012   March 31, 2013   June 30, 2013   September 30, 2013   December 31, 2013   December 31, 2013
Revenue   $ 177,076   $ 278,591   $ 113,999   $ 137,091   $ 193,982   $ 257,231   $ 702,303
Cost of purchased transportation and services    147,298    237,765    97,739    117,751    159,147    204,159    578,796
       Net revenue   29,778   40,826   16,260   19,340   34,835   53,072   123,507
Direct operating expense    0    0    0    0    2,077    4,278    6,355
SG&A expense                      
       Salaries & benefits    16,338    39,278    18,048    20,491    26,948    34,799    100,286
       Other SG&A expense    3,937    11,616    4,262    5,198    8,067    7,762    25,289
       Purchased services    6,733    15,388    3,815    5,914    7,805    5,741    23,275
       Depreciation and amortization    1,046    2,508    1,502    1,752    8,357    9,016    20,627
Total SG&A expense   28,054   68,790   27,627   33,355   51,177   57,318   169,477
Operating income (loss)   $ 1,724   $ (27,964)   $ (11,367)   $ (14,015)   $ (18,419)   $ (8,524)   $ (52,325)

XPO Logistics, Inc.
Prior Period Results Conformed to 2014 Presentation
Freight Brokerage
Statement of Operations Data
(in thousands)
                     
AS REPORTED   For the    For the    For the
   Year Ended    Three Months Ended    Year Ended
  December 31, 2011   December 31, 2012   March 31, 2013   June 30, 2013   September 30, 2013   December 31, 2013   December 31, 2013
Revenue $ 29,186   $ 125,121   $ 78,230   $ 95,360   $ 152,616   $ 215,183   $ 541,389
Direct expense                     
       Transportation services   24,434    108,507    67,957    82,705    124,804    169,253    444,719
       Other direct expense   55    489    207    88    162    118    575
Total direct expense 24,489   108,996   68,164   82,793   124,966   169,371   445,294
              Gross margin 4,697   16,125   10,066   12,567   27,650   45,812   96,095
SG&A expense                     
       Salaries & benefits   2,484    15,171    10,163    12,367    17,559    24,784    64,873
       Other SG&A expense   716    3,590    1,895    3,031    6,626    8,637    20,189
       Purchased services   148    1,695    814    979    2,269    3,501    7,563
       Depreciation and amortization   44    1,223    1,014    1,180    4,611    8,087    14,892
Total SG&A expense 3,392   21,679   13,886   17,557   31,065   45,009   107,517
Operating income (loss) $ 1,305   $ (5,554)   $ (3,820)   $ (4,990)   $ (3,415)   $ 803   $ (11,422)
                     
                     
AS CONFORMED   For the    For the    For the
   Year Ended    Three Months Ended    Year Ended
  December 31, 2011   December 31, 2012   March 31, 2013   June 30, 2013   September 30, 2013   December 31, 2013   December 31, 2013
Revenue $ 29,186   $ 125,121   $ 78,230   $ 95,360   $ 152,616   $ 215,183   $ 541,389
Cost of purchased transportation and services   24,489    108,996    68,164    82,793    124,966    169,371    445,294
       Net revenue 4,697   16,125   10,066   12,567   27,650   45,812   96,095
Direct operating expense   0    0    0    0    2,077    4,278    6,355
SG&A expense                     
       Salaries & benefits   2,484    15,171    10,163    12,367    17,442    24,554    64,526
       Other SG&A expense   716    3,590    1,895    3,031    5,172    6,022    16,120
       Purchased services   148    1,695    814    979    1,763    2,068    5,624
       Depreciation and amortization   44    1,223    1,014    1,180    4,611    8,087    14,892
Total SG&A expense 3,392   21,679   13,886   17,557   28,988   40,731   101,162
Operating income (loss) $ 1,305   $ (5,554)   $ (3,820)   $ (4,990)   $ (3,415)   $ 803   $ (11,422)

HUG#1782141
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