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XPO Annual Report, Year Ended Dec 31, 2008

Filing Date
Filed March 30, 2009
Period End
December 31, 2008
Security
XPO
In the record · 2016–202610-K1110-Q338-K243

XPO filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 243 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Mar ’17Mar ’17
  2. Material agreement8-K · May ’19May ’19
  3. Leadership change8-K · Mar ’22Mar ’22
  4. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed March 30, 2009. Cited figures are marked; the original filing is the authoritative source.

Express-1 Expedited Solutions, Inc. (the "Company") reported for fiscal 2008 that its three operating units, Express-1 (expedited transportation), Concert Group Logistics (freight forwarding, acquired January 2008) and Bounce Logistics (premium truckload brokerage, started March 2008), together generated revenues of $109.46 milliona, up from $47.71 million in 2007.

Express-1 Dedicated was discontinued in the fourth quarter of 2008 and its operations ceased on February 28, 2009. Income from continuing operations rose to $2.82 millionb ($0.09 per diluted share) and net income was $3.16 million ($0.10 per share), compared with net income of $2.17 million in 2007. Gross margin was $17.83 million, or 16% of revenue, down from 25% in 2007, reflecting the lower-margin acquired businesses and rate compression.

The balance sheet strengthened, with total assets of $41.68 millionc and stockholders' equity of $26.53 million at December 31, 2008, versus $23.72 million and $18.20 million a year earlier. Goodwill rose to $14.92 million. Long-term obligations increased to $4.76 million, mainly from a $2.32 million line of credit and $1.4 million of notes payable used to finance the CGL acquisition, which was funded with $9.0 million in cash and 4.8 million shares.

The Company reported cash from operations of $7.05 milliond and was in compliance with its credit facility covenants at year end. The filing highlights economic risk. Management said the U.S. economy was in recession and that revenue, costs and profitability are likely to be negatively affected until conditions stabilize.

The Company also noted heavy exposure to the domestic automotive industry, with a Big Three automaker accounting for about 7% of 2008 revenue, and said it settled the CGL earnout in March 2009 for $1.1 million. The Company describes its shares as trading on the NYSE AMEX under the symbol "XPO" and states it has never paid cash dividends.

02—Key points

Key Highlights

  1. Consolidated revenues of $109.46 million in 2008, up from $47.71 million in 2007, driven mainly by the January 2008 Concert Group Logistics acquisition and the March 2008 Bounce Logistics start-up.
  2. Net income of $3.16 million ($0.10 per diluted share) in 2008, compared with $2.17 million in 2007.
  3. Gross margin of $17.83 million, or 16% of revenue, versus 25% in 2007, which management attributed to the mix of acquired units and rate compression.
  4. Express-1 Dedicated discontinued in Q4 2008 after loss of a dedicated automotive contract; operations ceased February 28, 2009.
  5. Total assets of $41.68 million and stockholders' equity of $26.53 million at December 31, 2008; goodwill increased to $14.92 million.
  6. Long-term obligations rose to $4.76 million, including a $2.32 million line of credit under a $14.6 million National City Bank facility maturing May 31, 2010.
  7. Management states the U.S. economic recession is likely to negatively affect revenues, costs and profitability until the economy stabilizes; no customer exceeded 7% of 2008 consolidated revenue.

03—Questions

Frequently Asked Questions

  1. What drove the increase in revenue in 2008?

    Revenue rose to $109.46 million from $47.71 million. The filing attributes about 92% of the increase to the acquisition of Concert Group Logistics and the Bounce Logistics start-up, with Express-1 contributing about 8%.

  2. Why did gross margin decline as a percentage of revenue?

    The filing says the acquired Concert Group Logistics and Bounce Logistics units have different business models with higher purchased-transportation costs, so gross margin fell to 16% of revenue in 2008 from 25% in 2007. It also cites general rate compression and a higher fuel share of revenue.

  3. How was the Concert Group Logistics acquisition financed?

    The Company paid $9.0 million in cash and issued 4.8 million shares of common stock, financed through its line of credit and term debt and working capital. Up to $2.0 million of additional earnout was payable, which the Company settled in March 2009 for $1.1 million.

  4. What risks did management highlight for the coming year?

    Management highlighted the U.S. recession, which it said could reduce revenues and margins, and exposure to the domestic automotive industry. It also cited reliance on independent contract drivers and equipment providers, fuel price volatility, and covenant compliance under its credit facility.

  5. Does the Company pay dividends?

    No. The filing states the Company has never paid cash dividends on its common stock and intends to retain future earnings to retire debt and finance expansion.

04—Continue

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