XPO Logistics Announces Third Quarter 2013 Results and Reaffirms Full Year Outlook

GlobeNewswire

Reports 42% Organic Growth Company-wide

Generates Significant Gross Margin Percentage Improvement in All Business Units

Rebrands Freight Forwarding Division as XPO Global Logistics

Opens Freight Forwarding Cold-start in Dallas and Adds
Brokerage Cold-starts in Houston and Richmond

GREENWICH, Conn. - November 4, 2013 - XPO Logistics, Inc. (XPO) today announced financial results for the third quarter of 2013.

Total revenue was $194.0 million for the third quarter, a 173.3% increase from the same period in 2012. Gross margin dollars increased 251.0% year-over-year to $34.8 million, and gross margin percentage increased by 400 basis points to 18.0%.

For the third quarter of 2013, the company reported a net loss of $6.0 million, compared with a net loss of $3.1 million for the same period in 2012. The net loss available to common shareholders was $6.8 million, or a loss of $0.28 per diluted share, compared with a net loss of $3.9 million, or a loss of $0.22 per diluted share, for the same period in 2012. The company`s third quarter results reflect: a $10.3 million tax benefit related to the release of a valuation allowance against deferred tax assets; $3.1 million, or $1.9 million after-tax, in accelerated amortization of intangible assets related to the rebranding of the freight forwarding business; and $3.0 million, or $1.9 million after-tax, for a commitment fee related to an undrawn debt funding option for the 3PD transaction.

Earnings (loss) before interest, taxes, depreciation and amortization ("EBITDA"), a non-GAAP financial measure, was a loss of $10.3 million for the third quarter of 2013, compared with a loss of $8.9 million for the same period in 2012. EBITDA includes $1.2 million of non-cash share-based compensation in each of the third quarters for 2013 and 2012. A reconciliation of EBITDA to net income is provided in the attached financial tables.

The company had $67.3 million of cash as of September 30, 2013.

Rebrands Freight Forwarding Division as XPO Global Logistics

The company has rebranded its formerly named Concert Group Logistics (CGL) division as XPO Global Logistics, to better reflect the role of freight forwarding within the company`s broader service offering. XPO Global Logistics provides domestic and international freight forwarding services through 28 locations in the United States and Canada. The division has launched a new website at www.xpogloballogistics.com.

Reaffirms Full Year 2013 Financial Outlook

The company has reaffirmed its full year 2013 outlook for an annual revenue run rate of more than $1 billion as of December 31, and positive EBITDA for the fourth quarter.

CEO Comments

Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, "In the third quarter, we drove 42% organic revenue growth on a year-over-year basis company-wide. We also achieved significant increases in gross margin percentage in every business unit. We delivered 146% organic revenue growth in our freight brokerage division, and improved our truckload brokerage gross margin percentage by 100 basis points. Our expedite division operated more efficiently, resulting in year-over-year improvements in revenue and margin performance. And our freight forwarding division continued to generate double-digit growth.

"We have brokerage cold-starts underway in Houston and Richmond, where we`re immersed in recruiting transportation talent. We recently received approval for up to $1.9 million in state and local tax incentives to develop a large brokerage facility in Louisville, Kentucky. And we`re continuing to grow our positions in LTL and intermodal. Our momentum is resonating with large shippers who see that we have both the desire to outperform, and the resources to deliver."

Jacobs continued, "While we reported a loss, as expected, our strategic investments are driving significant revenue growth and margin improvement. Given our trajectory, we`re on track to meet our 2013 targets for positive EBITDA in the fourth quarter and a billion dollar revenue run rate by year-end."

Third Quarter 2013 Results by Business Unit

  • Freight brokerage: The company`s freight brokerage business generated total revenue of $152.6 million for the quarter, a 374.4% increase from the same period in 2012. Gross margin percentage was 18.1% for the quarter, compared with 12.6% for the same period in 2012, an improvement of 550 basis points. The year-over-year increases in revenue and gross margin percentage were primarily driven by the acquisition of 3PD, which typically generates higher gross margin percentage than truckload brokerage, prior acquisitions and growth of the company`s brokerage cold-start locations. Truckload brokerage gross margin, which excludes last-mile, improved 100 basis points versus the same period in 2012. Third quarter operating loss was $3.4 million, compared with a loss of $2.2 million a year ago, primarily reflecting an increase in SG&A costs for sales force expansion, technology and training, as well as increased intangible asset amortization relating to the acquisition of 3PD.  

  • Expedited transportation: The company`s expedited transportation business generated total revenue of $25.1 million for the quarter, a 5.7% increase from the same period in 2012. Gross margin percentage was 18.1% for the quarter, compared with 16.6% for the same period in 2012, an improvement of 150 basis points. The year-over-year increase in gross margin percentage primarily reflects lower direct expenses, partially offset by the addition of expedited air charter revenue from the 2013 acquisition of East Coast Air Charter; air charter services typically generate higher revenue per load but lower gross margin percentage than the company`s over-the-road expedited business. Third quarter operating income was $1.7 million, a 22.9% increase from the same period in 2012, primarily reflecting the increase in gross margin.  

  • Freight forwarding: The company`s freight forwarding business generated total revenue of $19.1 million for the quarter, a 10.5% increase from the same period in 2012. The increase in revenue was primarily driven by growth of the company`s freight forwarding cold-starts and a higher volume of international shipments. Gross margin percentage was 13.8% for the quarter, an improvement of 270 basis points, compared with 11.1% for the same period in 2012. The increase in gross margin percentage was primarily driven by branch conversions from independent ownership to company ownership. Third quarter operating loss was $2.6 million compared with income of $193,000 a year ago. The operating loss in the quarter reflects the accelerated amortization of $3.1 million, or $1.9 million after-tax, in intangible assets related to the CGL trade name. Excluding this accelerated amortization, operating income increased reflecting a higher gross margin.  

  • Corporate: Corporate SG&A expense for the third quarter of 2013 was $14.2 million, compared with $8.7 million for the third quarter of 2012. The increase in SG&A expense was largely driven by an increase in purchased services, including $3.2 million, or $2.0 million after-tax, of transaction costs primarily related to the 3PD acquisition; and $1.5 million, or $0.9 million after-tax, of litigation costs; as well as an increase in corporate shared services. 

Nine Months 2013 Financial Results

For the nine months ended September 30, 2013, the company reported total revenue of $445.1 million, a 161.7% increase from the first nine months of 2012.

Net loss was $37.9 million for the first nine months of 2013, compared with net loss of $11.0 million for the same period last year. The company reported a nine-month net loss available to common shareholders of $40.2 million, or a loss of $1.99 per diluted share, compared with a net loss of $13.3 million, or a loss of $0.89 per diluted share, for the same period in 2012. The company`s nine months results reflect: a $10.3 million tax benefit related to the release of a valuation allowance against deferred tax assets; $3.1 million, or $1.9 million after-tax, in accelerated amortization of intangible assets related to the rebranding of the freight forwarding business; and $3.0 million, or $1.9 million after-tax, for a commitment fee related to an undrawn debt funding option for the 3PD transaction.

EBITDA was a loss of $32.4 million for the first nine months of 2013, compared with a loss of $15.7 million for the same period in 2012, primarily reflecting planned investments in scale, including a significant increase in sales headcount year-over-year.

Announces Cold-starts

The company announced the August opening of a freight forwarding cold-start in Dallas, Texas, and the addition of two freight brokerage cold-starts in Houston, Texas, and Richmond, Va. In addition, the company has received approval for as much as $1.9 million in state and local tax incentives related to a planned brokerage center in Louisville, Ky.

Enters into ABL Facility

On October 18, 2013, the company entered into a $125 million multicurrency secured revolving loan credit agreement (the "ABL facility") with a maturity of five years. The principal amount of the commitments under the ABL facility may be increased up to $200 million, subject to certain terms and conditions.

Conference Call

The company will hold a conference call on Tuesday, November 5, 2013, at 8:30 a.m. Eastern Time. Participants can call toll-free (from U.S./Canada) 1-800-447-0521; international callers dial +1-847-413-3238. 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 December 5, 2013. To access the replay by phone, call toll-free (from U.S./Canada) 1-888-843-7419; international callers dial +1-630-652-3042. Use participant passcode 35737223.

About XPO Logistics, Inc.  

XPO Logistics, Inc. (XPO) is one of the fastest growing providers of transportation logistics services in North America, offering freight brokerage, expedited transportation, white glove delivery and freight forwarding services. The company is one of the leading freight brokerage firms in North America, the largest provider of heavy goods, last-mile logistics, and a top expediter.

XPO is built to deliver constant growth in capacity and passionate service through market-facing technologies and 89 locations in the United States and Canada. The company uses its relationships with more than 23,000 ground, sea and air carriers to move freight for over 9,500 customers in the manufacturing, industrial, retail, commercial, life sciences and government sectors. www.xpologistics.com

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures as defined under Securities and Exchange Commission ("SEC") rules, such as earnings (loss) before interest, taxes, depreciation and amortization ("EBITDA") for the quarters and nine-month periods ended September 30, 2013, and September 30, 2012. As required by SEC rules, we provide reconciliations of these measures to the most directly comparable measure under United States generally accepted accounting principles ("GAAP"), which are set forth in the attachments to this release. We believe that EBITDA improves comparability from period to period by removing the impact of our capital structure (interest expense from our outstanding debt), asset base (depreciation and amortization) and tax consequences. In addition to its use by management, we believe that EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of companies in our industry. Other companies may calculate EBITDA differently, and therefore our EBITDA may not be comparable to similarly titled measures of other companies. EBITDA is not a measure of financial performance or liquidity under GAAP and should not be considered in isolation or as an alternative to net income, cash flows from operating activities and other measures determined in accordance with GAAP. Items excluded from EBITDA are significant and necessary components of the operations of our business, and, therefore, EBITDA should only be used as a supplemental measure of our operating performance.

Forward-looking Statements

 

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, our 2013 outlook with respect to annual revenue and fourth quarter 2013 EBITDA, the planned addition of a brokerage center in Louisville, Ky., the amount of potential tax incentives in connection with such brokerage center, and other such matters. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target" or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include, but are not limited to, those discussed in our filings with the SEC and the following: economic conditions generally; competition; our ability to find suitable acquisition candidates and execute our acquisition strategy; our ability to raise debt and equity capital; our ability to attract and retain key employees to execute our growth strategy; litigation, including litigation related to misclassification of independent contractors; our ability to develop and implement a suitable information technology system; our ability to maintain positive relationships with our network of third-party transportation providers; our ability to retain our largest customers; our ability to successfully integrate acquired businesses; and governmental regulation. All forward-looking statements set forth in this press release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us or our business or operations. Forward-looking statements set forth in this press release speak only as of the date hereof and we do not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, including our 2013 outlook, except to the extent required by law.

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

XPO Logistics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012     2013 2012
Revenues $ 193,982 $ 70,988 $ 445,071 $ 170,088
Expenses
  Direct expense 159,147 61,064 374,636 144,925
    Gross margin 34,835 9,924 70,435 25,163
  Sales general and administrative expense 53,254 19,204 114,236 42,035
Operating loss (18,419) (9,280) (43,801) (16,872)
  Other expense 235 314 294 319
  Interest expense 6,415 15 12,585 30
Loss before income tax provision (25,069) (9,609) (56,680) (17,221)
  Income tax benefit (19,044) (6,460) (18,748) (6,201)
Net loss (6,025) (3,149) (37,932) (11,020)
  Cumulative preferred dividends (743) (750) (2,229) (2,250)
Net loss available to common shareholders $ (6,768) $ (3,899) $ (40,161) $ (13,270)
Basic loss per share
  Net loss $ (0.28) $ (0.22) $ (1.99) $ (0.89)
Diluted loss per share
  Net loss $ (0.28) $ (0.22) $ (1.99) $ (0.89)
Weighted average common shares outstanding
  Basic weighted average common shares outstanding 24,222 17,663 20,167 14,952
  Diluted weighted average common shares outstanding 24,222 17,663 20,167 14,952

XPO Logistics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
September 30, December 31,
2013 2012
ASSETS (Unaudited)
Current assets:
  Cash and cash equivalents $ 67,259 $                252,293
  Accounts receivable, net of allowances of $2,355 and $603, respectively 123,082                  61,245
  Prepaid expenses 3,435                    1,555
  Deferred tax asset, current 1,288                    1,406
  Income tax receivable 2,265                    2,569
  Other current assets 5,081                    1,866
    Total current assets 202,410                320,934
  Property and equipment, net of $9,193 and $5,323
  in accumulated depreciation, respectively 39,668 13,090
  Goodwill 302,847 55,947
  Identifiable intangible assets, net of $9,153 and $4,592
  in accumulated amortization, respectively 154,026 22,473
  Deferred tax asset, long-term 73 0
  Other long-term assets 1,308 764
   Total long-term assets 497,922                  92,274
    Total assets $ 700,332 $                413,208
LIABILITIES AND STOCKHOLDERS` EQUITY
Current liabilities:
  Accounts payable $ 36,535 $ 22,108
  Accrued salaries and wages 8,598 3,516
  Accrued expenses, other 33,356 21,123
  Current maturities of notes payable and capital leases 723 491
  Other current liabilities 5,106 1,789
    Total current liabilities 84,318                  49,027
  Convertible senior notes 112,717                108,280
  Notes payable and capital leases, net of current maturities 459                      676
  Deferred tax liability, long term 18,197                    6,781
  Other long-term liabilities 27,894                    3,385
    Total long-term liabilities 159,267                119,122
Stockholders` equity:
 Preferred stock, $.001 par value; 10,000,000 shares;
   74,225 shares issued and outstanding 42,765                  42,794
  Common stock, $.001 par value; 150,000,000 shares authorized;
  29,960,689 and 18,002,985 shares issued, respectively;
  and 29,915,689 and 17,957,985 shares outstanding, respectively 29                        18
  Additional paid-in capital 514,508                262,641
  Treasury stock, at cost, 45,000 shares held (107)                     (107)
  Accumulated deficit (100,448)                 (60,287)
    Total stockholders` equity 456,747                245,059
      Total liabilities and stockholders` equity $ 700,332 $                413,208

XPO Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Nine Months Ended
September 30,
2013     2012
Operating activities
 Net loss $ (37,932) $ (11,020)
Adjustments to reconcile net loss to net cash from operating activities
Provisions for allowance for doubtful accounts 1,855 645
Depreciation and amortization 11,743 1,462
Stock compensation expense 3,374 3,485
Accretion of debt 4,437                         -  
Other (201) (8)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable (28,096) (8,078)
Deferred tax expense (18,882) (4,276)
Income tax receivable (662) (1,824)
Prepaid expense and other current assets (2,373) (436)
Other long-term assets (97) 12
Accounts payable (6,137) (3,136)
Accrued expenses and other liabilities 11,426 6,255
Cash flows used by operating activities (61,545) (16,919)
Investing activities
Acquisition of businesses, net of cash acquired (352,266) (7,011)
Proceeds from sale of business interests 125                         -  
Payment for purchases of property and equipment (6,535) (3,986)
Cash flows used by investing activities (358,676) (10,997)
Financing Activities
Credit line, net activity (115) (2,178)
Proceeds from issuance of convertible senior notes, net                        -   120,287
Payments of notes payable and capital leases (239) (2,089)
Payment of acquisition earn-out (305) (450)
Proceeds from stock offering, net 239,660 136,961
Proceeds from exercise of options, net                        -   131
Payments of tax withholdings for restricted shares (1,585)                         -  
Dividends paid to preferred stockholders (2,229) (2,250)
Cash flows provided by financing activities 235,187 250,412
Net (decrease) increase in cash (185,034) 222,496
Cash and cash equivalents, beginning of period 252,293 74,007
Cash and cash equivalents, end of period $ 67,259 $ 296,503
Supplemental disclosure of cash flow information:
  Cash paid during the period for interest 6,611 29
  Cash paid during the period for income taxes 907 244
  Equity portion of acquisition purchase price 10,446                         -  

Freight Brokerage
Summary Financial Table
(Unaudited)
(In thousands)
Three Months Ended September 30,     Nine Months Ended September 30,
2013     2012     $ Variance       Change % 2013     2012     $ Variance       Change %
       
Revenue $ 152,616 $ 32,169 $ 120,447 374.4% $ 326,206 $ 53,974 $ 272,232 504.4%
Direct expense
  Transportation services 124,804 27,966 96,838 346.3% 275,466 47,128 228,338 484.5%
  Other direct expense 162 152 10 6.6% 457 244 213 87.3%
Total direct expense 124,966 28,118 96,848 344.4% 275,923 47,372 228,551 482.5%
    Gross margin 27,650 4,051 23,599 582.5% 50,283 6,602 43,681 661.6%
SG&A expense
  Salaries & benefits 17,559 3,961 13,598 343.3% 40,089 6,392 33,697 527.2%
  Purchased services 2,269 694 1,575 226.9% 4,062 1,022 3,040 297.5%
  Other SG&A expense 6,626 1,248 5,378 430.9% 11,551 1,857 9,694 522.0%
  Depreciation & amortization 4,611 317 4,294 1354.6% 6,805 413 6,392 1547.7%
Total SG&A expense 31,065 6,220 24,845 399.4% 62,507 9,684 52,823 545.5%
Operating loss $ (3,415) $ (2,169) $ (1,246) 57.4% $ (12,224) $ (3,082) $ (9,142) 296.6%

Freight Brokerage
Key Data
(Unaudited)
(In thousands, except personnel data)
3 Mos Ended 3 Mos Ended 9 Mos Ended 9 Mos Ended
September 30, September 30, September 30, September 30,
2013 2012 2013 2012
Revenues
   Truckload, LTL, and Intermodal $            106,081 $              32,169 $            279,671 $              53,974
   Last Mile              46,535                     -                46,535                     -  
Total Revenue $            152,616 $              32,169 $            326,206 $              53,974
Gross Margin
   Truckload, LTL, and Intermodal $              14,443 $                4,051 $              37,076 $                6,602
   Last Mile              13,207                     -                13,207                     -  
Total Gross Margin $              27,650 $                4,051 $              50,283 $                6,602
Gross Margin %
   Truckload, LTL, and Intermodal 13.6% 12.6% 13.3% 12.2%
   Last Mile 28.4%                     -   28.4%                     -  
Overall Gross Margin % 18.1% 12.6% 15.4% 12.2%
Freight Brokerage personnel (end of period)                1,489 290

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 September 30, Nine Months Ended September 30,
2013     2012     $ Variance       Change %     2013     2012     $ Variance       Change %
Revenue $ 25,101     $ 23,755 $ 1,346 5.7% $ 75,421     $ 71,906 $ 3,515 4.9%
Direct expense
 Transportation services 19,766 18,803 963 5.1% 60,447 55,995 4,452 8.0%
 Other direct expense 797 1,008 (211) -20.9% 2,419 2,673 (254) -9.5%
Total direct expense 20,563 19,811 752 3.8% 62,866 58,668 4,198 7.2%
    Gross margin 4,538 3,944 594 15.1% 12,555 13,238 (683) -5.2%
SG&A expense
 Salaries & benefits 1,893 1,615 278 17.2% 5,854 4,940 914 18.5%
 Purchased services 212 259 (47) -18.1% 747 707 40 5.7%
 Other SG&A expense 470 578 (108) -18.7% 1,587 1,513 74 4.9%
 Depreciation & amortization 224 77 147 190.9% 689 241 448 185.9%
Total SG&A expense 2,799 2,529 270 10.7% 8,877 7,401 1,476 19.9%
Operating income $ 1,739 $ 1,415 $          324 22.9% $ 3,678 $ 5,837 $     (2,159) -37.0%

Note: Total depreciation and amortization for the Expedited Transportation operating segment included in both direct expense and SG&A, was $262 and $127 for the three-months ended September 30, 2013 and 2012, respectively, and $821 and $393 for the nine-month periods ended September 30, 2013 and 2012, respectively.

Freight Forwarding
Summary Financial Table
(Unaudited)
(In thousands)
Three Months Ended September 30, Nine Months Ended September 30,
2013     2012     $ Variance       Change % 2013     2012     $ Variance       Change %
Revenue $ 19,129 $ 17,304 $ 1,825 10.5% $ 54,700 $ 49,229 $ 5,471 11.1%
Direct expense
 Transportation services 14,740 12,914 1,826 14.1% 41,593 36,577 5,016 13.7%
 Station commissions 1,706 2,428 (722) -29.7% 5,407 7,201 (1,794) -24.9%
 Other direct expense 35 34 1 2.9% 103 128 (25) -19.5%
Total direct expense 16,481 15,376 1,105 7.2% 47,103 43,906 3,197 7.3%
   Gross margin 2,648 1,928 720 37.3% 7,597 5,323 2,274 42.7%
SG&A expense
 Salaries & benefits 1,618 1,059 559 52.8% 4,569 2,770 1,799 64.9%
 Purchased services 63 207 (144) -69.6% 311 394 (83) -21.1%
 Other SG&A expense 328 324 4 1.2% 1,048 1,072 (24) -2.2%
 Depreciation & amortization 3,227 145 3,082 2125.5% 3,407 433 2,974 686.8%
Total SG&A expense 5,236 1,735 3,501 201.8% 9,335 4,669 4,666 99.9%
Operating income $ (2,588) $ 193 $ (2,781) -1440.9% $ (1,738) $ 654 $ (2,392) -365.7%

XPO Corporate
Summary of Selling, General & Administrative Expense
(Unaudited)
(In thousands)
Three Months Ended September 30, Nine Months Ended September 30,
2013 2012 $ Variance       Change % 2013 2012 $ Variance       Change %
SG&A expense                                
 Salaries & benefits $ 5,995 $ 3,520 $ 2,475 70.3% $ 15,095 $ 9,665 $ 5,430 56.2%
 Purchased services 5,767 4,016 1,751 43.6% 12,921 7,660 5,261 68.7%
 Other SG&A expense 2,097 1,050 1,047 99.7% 4,791 2,733 2,058 75.3%
 Depreciation &
amortization
296 133 163 122.6% 710 223 487 218.4%
Total SG&A expense $ 14,155 $ 8,719 $ 5,436 62.3% $ 33,517 $ 20,281 $ 13,236 65.3%

Note: Intercompany eliminations included revenue of $2.9 million and $2.2 million for the three-months ended September 30, 2013 and 2012, respectively, as well as revenues of $11.3 million and $5.0 million for the year to date periods ended September 30, 2013 and 2012, respectively, that eliminate upon consolidation.

Reconciliation of Non-GAAP Measures
XPO Logistics, Inc.
Consolidated Reconciliation of EBITDA to Net Loss
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012    Change % 2013 2012    Change %
Net loss available to common shareholders $ (6,768)     $ (3,899)     73.6% $ (40,161)     $ (13,270)     202.6%
Preferred dividends (743) (750) -0.9% (2,229) (2,250) -0.9%
Net loss (6,025) (3,149) 91.3% (37,932) (11,020) 244.2%
Interest expense 6,415 15 42666.7% 12,585 30 41850.0%
Income tax benefit (19,044) (6,460) 194.8% (18,748) (6,201) 202.3%
Depreciation and amortization 8,396 721 1064.5% 11,743 1,462 703.2%
EBITDA $ (10,258) $ (8,873) 15.6% $ (32,352) $ (15,729) 105.7%

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 Nine Months Ended
September 30, 2013 September 30, 2012 September 30, 2013 September 30, 2012
Basic common stock outstanding 24,221,987 17,663,403 20,167,436 14,952,059
Potentially Dilutive Securities:
Shares underlying the conversion
 of preferred stock to common stock                   10,604,891 10,714,286                   10,608,752 10,714,286
Shares underlying the conversion
 of the convertible senior notes                    8,749,239                       330,784                    8,749,239                       111,066
Shares underlying  warrants to
 purchase common stock 7,348,157 5,516,551                    6,721,704 5,770,577
Shares underlying  stock options
 to purchase common stock                       424,122 507,425                       347,356 549,084
Shares underlying  restricted stock units                       432,888 138,921                       332,488 158,308
27,559,297 17,207,967 26,759,539 17,303,321
Diluted weighted shares outstanding 51,781,284 34,871,370 46,926,975                   32,255,380

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 $22.31 per share and $14.43 per share for the three-month periods ended September 30, 2013 and 2012, respectively, and $18.81 per share and $15.17 per share for the nine-month periods ended September 30, 2013 and 2012, respectively.

For informational purposes, the following table represents fully diluted shares as of September 30, 2013, 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 average closing market price of common stock for the three-month period ended September 30, 2013. 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 September 30, 2013
Common Stock Outstanding                    29,915,689
Preferred stock                    10,603,571
Convertible senior notes                      8,749,239
Warrants                      7,348,157
Outstanding stock options                        724,536
Restricted stock units                        552,584
Total 57,893,776



This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.

The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.

Source: XPO Logistics, Inc. via Thomson Reuters ONE

HUG#1740498
View Comments (0)