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XPO Logistics net revenue increased 349%, will buy BTT for $100 million

Staff writer |
XPO Logistics announced financial results for the first quarter of 2015. Total gross revenue increased 148.9% year-over-year to $703 million, and net revenue increased 349% to $262.2 million.

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The company reported a net loss of $14.7 million for the quarter, compared with a net loss of $28.3 million for the same period in 2014.

The net loss available to common shareholders was $15.4 million, or a loss of $0.20 per diluted share, compared with a net loss available to common shareholders of $29.1 million, or a loss of $0.70 per diluted share, for the same period in 2014.

The adjusted net loss available to common shareholders, a non-GAAP measure, was $9.9 million, or a loss of $0.13 per share for the quarter, excluding the items detailed below. This compares to an adjusted net loss available to common shareholders of $16.7 million, or a loss of $0.40 per share, for the first quarter of 2014.

Adjusted net loss available to common shareholders for the first quarter of 2015 excludes: $6.5 million, or $4.8 million after-tax, of costs related to the conversion of the company's convertible senior notes; $0.6 million, or $0.4 million after-tax, of transaction and integration costs; and $0.5 million, or $0.3 million after-tax, of accelerated amortization of trade names related to the rebranding to XPO Logistics.

Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), a non-GAAP financial measure, improved to $29.2 million for the quarter, compared with $0.6 million for the same period in 2014. Adjusted EBITDA in the first quarter of 2015 excludes $0.6 million of transaction and integration costs and includes $2.3 million of non-cash share-based compensation. A reconciliation of adjusted EBITDA to net loss is provided in the attached financial tables.

On May 4, 2015, XPO entered into a definitive agreement to acquire Bridge Terminal Transport Services, Inc. (BTT), one of the largest asset-light drayage providers in the United States. The transaction is subject to customary closing conditions, including antitrust clearance, and is expected to close in the second quarter of 2015.

The transaction is expected to be immediately accretive to earnings before the benefits of cross-selling and other synergies. XPO intends to rebrand and integrate BTT with XPO Logistics.

The purchase price is $100 million, excluding any working capital adjustments, with no assumption of debt. BTT had revenue of $232.0 million for the trailing 12 months ended March 31, 2015. The purchase price represents a consideration of 8.1 times EBITDA of $12.4 million for the same 12-month period.

In business for 33 years, BTT arranges ground transportation through a network of 28 terminals and approximately 1,300 independent owner operators. BTT has approximately 250 employees and 1,800 customers, including many multinational companies, with its top ten customers having an average tenure of 19 years with BTT. The acquisition will significantly expand XPO's drayage capacity on the East Coast.

In light of XPO's previously announced agreement to acquire Norbert Dentressangle SA, and its agreement to acquire Bridge Terminal Transport Services, Inc., the company has raised its 2015 targets to an annual revenue run rate of at least $9.5 billion and an annual EBITDA run rate of at least $625 million by December 31.


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