01—Abstract
Summary
Summary of the 10-K filed March 25, 2011. Cited figures are marked; the original filing is the authoritative source.
Express-1 Expedited Solutions, Inc. (now XPO, Inc.) reported a strong 2010 in its Form 10-K for the year ended December 31, 2010.
Consolidated operating revenue rose to $157,987,000a from $100,136,000 in 2009, an increase of 57.8%, and net income reached $4,888,000 ($0.15 per diluted share) versus $1,705,000 ($0.05) in 2009. Gross margin improved to 17.3% of revenue from 16.7%, and SG&A fell to 12.0% of revenue from 13.6%. The company attributes $12.1 million of the revenue growth to LRG International (CGL International), acquired in October 2009, with the remainder achieved organically.
The company operates three non-asset based units: Express-1 (expedited ground transportation, 51.3% revenue growth to $76,644,000b), Concert Group Logistics (freight forwarding, $65,222,000, with 24 independently owned stations and two company-owned international branches), and Bounce Logistics (premium truckload brokerage, $19,994,000, up 91.8%). Management describes 2011 as optimistic, expecting tightening truck capacity and continued economic improvement to support pricing and margins. Balance sheet and liquidity were modestly improved.
Cash was $561,000,c working capital was $12.3 million, and total assets were $56,672,000. In March 2010 the company renewed a $15.0 million PNC Bank facility comprising a $10.0 million receivables-based line of credit and a $5.0 million term loan, with a March 31, 2012 maturity on the line.
Operating cash flow was $1,757,000d for 2010, and the company stated it was in compliance with its credit covenants. The company has never paid cash dividends.
02—Key points
Key Highlights
- Revenue rose 57.8% to $157,987,000 in 2010 from $100,136,000 in 2009, with record revenues at all three business units.
- Net income increased to $4,888,000 ($0.15 per diluted share) from $1,705,000 ($0.05 per diluted share) in 2009.
- Consolidated gross margin improved to 17.3% from 16.7%, and SG&A declined to 12.0% of revenue from 13.6%.
- Express-1 revenue grew to $76,644,000 (up 51.3%) with gross margin rising to 22.7% from 21.3%; Mexico operations generated 16% of total company revenue.
- Bounce Logistics revenue more than doubled to $19,994,000 (up 91.8%), and Concert Group Logistics grew to $65,222,000 (up 58.5%), aided by the LRG International acquisition.
- Working capital increased to $12.3 million, and the company renewed a $15.0 million PNC Bank credit facility in March 2010, with the line of credit maturing March 31, 2012.
- Common stock trades on the NYSE AMEX under the symbol XPO; the company has never paid cash dividends and reports about 3,400 holders of record as of March 18, 2011.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Xpo kept $0.03.
- Revenue$158.0M100.0%
- Cost of revenue−$130.6M82.7%
- Gross profit$27.4M17.3%
- Operating costs−$19.0M12.0%
- Operating income$8.4M5.3%
- Interest, other & tax−$3.6M2.3%
- Net income$4.9M3.1%
Where FY2010 revenue went
$158.0M- Cost of revenue: $130.6M, 83% of revenue
- Net income: $4.9M, 3.1% of revenue
- Operating costs: $19.0M, 12% of revenue
- Interest, other & tax: $3.6M, 2.3% of revenue
Kept 3.1% as net incomeNet income $4.9M · 3.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed March 25, 2011Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $157.99M$100.14M | +57.8% |
| Gross Profit | $27.40M$16.74M | +63.7% |
| Operating Income | $8.45M$3.17M | +166.4% |
| Interest Expense | $205K$105K | +95.2% |
| Net Income | $4.89M$1.71M | +186.7% |
| EPS (Basic) | $0.61$0.21 | +190.5% |
| EPS (Diluted) | $0.59$0.21 | +181.0% |
| Shares Outstanding (Basic) | 8.06M8.01M | +0.6% |
| Shares Outstanding (Diluted) | 8.28M8.04M | +2.9% |
05—Questions
Frequently Asked Questions
How did the company perform financially in 2010?
Operating revenue was $157,987,000, up 57.8% from $100,136,000 in 2009. Operating income from continuing operations was $8,446,000 versus $3,171,000, and net income was $4,888,000 versus $1,705,000.
What are the company's three business units?
Express-1 provides expedited surface transportation ($76,644,000 of 2010 revenue), Concert Group Logistics provides domestic and international freight forwarding through independently owned stations ($65,222,000), and Bounce Logistics provides premium truckload brokerage ($19,994,000). The company describes all three as non-asset based.
How strong is the company's liquidity and debt position?
At December 31, 2010, the company had cash of $561,000 and working capital of $12.3 million. The line of credit balance was $2,749,000, and notes payable and capital leases totaled $3,763,000 in total future principal payments. The company stated it was in compliance with all credit facility covenants.
Did the company pay dividends or face material legal proceedings?
The company has never paid cash dividends and intends to retain earnings to retire debt and finance expansion. Management stated that the ultimate disposition of all known legal matters is not expected to have a materially adverse effect on the company's financial position, results of operations, or liquidity.
What is management's outlook for 2011?
Management said it is optimistic for 2011 as trucking capacity tightens and the economy continues to improve, and it anticipates gross margin and SG&A ratios to continue improving slightly. It also noted that rising fuel prices can reduce gross margin percentages, and that a slow economic recovery could compromise its ability to sustain premium rates.
06—Continue