01—Abstract
Summary
Summary of the 10-Q filed May 3, 2024. Cited figures are marked; the original filing is the authoritative source.
XPO, Inc. reported first-quarter 2024 revenue of $2.02 billiona, up 5.8% from $1.91 billion in the first quarter of 2023, driven primarily by growth in its North American LTL segment.
Operating income rose to $138 millionb from $58 million, and net income was $67 million, or $0.56 per diluted share, compared with $14 million, or $0.13 per diluted share, a year earlier. Results from continuing operations improved across both segments, with North American LTL Adjusted EBITDA rising to $255 million (20.9% of revenue) from $182 million (16.3% of revenue) and European Transportation Adjusted EBITDA of $38 million versus $37 million. Cash flow from continuing operations was $145 million versus $76 million a year earlier, but capital spending rose to $306 million from $224 million, and cash and cash equivalents declined to $229 million from $412 million at December 31, 2023.
As of March 31, 2024, the company reported approximately $793 millionc of total liquidity, with $564 million available under its ABL Facility, and stated it expects full-year 2024 gross capital expenditures of $700 million to $800 million. Total debt was $3.39 billion carrying value, and interest expense increased to $58 million from $42 million, which the company attributed to the debt issued in the fourth quarter of 2023 to fund the Yellow Asset Acquisition and higher interest rates.
The filing states that the Board previously authorized the divestiture of the European business, with no assurance that a transaction will occur. The company also noted that the freight environment in 2024 continues to be recessionary, and that it resolved a California environmental matter for $7.9 milliond in April 2024.
02—Key points
Key Highlights
- Revenue rose 5.8% to $2.02 billion, led by North American LTL revenue growth of 9.0% to $1.22 billion.
- Operating income more than doubled to $138 million from $58 million, and net income increased to $67 million from $14 million.
- North American LTL Adjusted EBITDA increased to $255 million (20.9% of revenue) from $182 million (16.3% of revenue).
- Diluted EPS was $0.56, compared with $0.13 in the prior-year quarter, which included a $0.02 loss from discontinued operations.
- Capital expenditures increased to $306 million from $224 million, and full-year 2024 gross capex is expected to be $700 million to $800 million.
- Cash and cash equivalents fell to $229 million from $412 million at December 31, 2023, with total liquidity of approximately $793 million.
- Interest expense rose to $58 million from $42 million, reflecting debt issued to finance the Yellow Asset Acquisition and higher interest rates.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 3, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $2.02B$1.91B | +5.8% |
| Operating Income | $138.00M$58.00M | +137.9% |
| Interest Expense | $58.00M$42.00M | +38.1% |
| Net Income | $67.00M$14.00M | +378.6% |
| EPS (Basic) | $0.58$0.13 | +346.2% |
| EPS (Diluted) | $0.56$0.13 | +330.8% |
| Shares Outstanding (Basic) | 116.00M116.00M | 0.0% |
| Shares Outstanding (Diluted) | 120.00M116.00M | +3.4% |
05—Questions
Frequently Asked Questions
How did XPO's core North American LTL business perform in the first quarter of 2024?
Revenue in the segment rose 9.0% to $1.22 billion, and Adjusted EBITDA increased to $255 million, or 20.9% of revenue, from $182 million, or 16.3% of revenue. Pounds per day grew 2.6%, shipments per day grew 4.7%, and gross revenue per hundredweight, excluding fuel surcharges, rose 9.8%.
Why did cash decline even though operating cash flow improved?
Net cash from operating activities of continuing operations increased to $145 million from $76 million, but purchases of property and equipment rose to $306 million from $224 million. Net cash used in investing and financing activities totaled $299 million and $29 million, respectively, which reduced cash and cash equivalents to $229 million from $412 million at December 31, 2023.
What is the status of the planned divestiture of the European business?
The Board of Directors has previously authorized the divestiture of the European business. The filing states there can be no assurance that the divestiture will occur, or of its terms or timing.
What debt and liquidity resources does XPO have?
As of March 31, 2024, total debt carrying value was $3.39 billion, and the company had $564 million available under its ABL Facility based on a $565 million borrowing base. The term loan facility's applicable interest rate was approximately 7.32%, and total liquidity was approximately $793 million. The company stated it was in compliance with its debt covenants and believes its liquidity is sufficient for the next 12 months.
What does the European Transportation segment's performance look like?
Segment revenue rose 1.3% to $797 million, with foreign currency movement adding approximately 2.5 percentage points, so revenue was essentially flat on a constant-currency basis. Adjusted EBITDA was $38 million, or 4.8% of revenue, compared with $37 million, or 4.7% of revenue, in the prior-year quarter.
06—Continue