GREENWICH, CT: May 03, 2016. XPO Logistics reported a net loss of US$19.3 million on revenue of US$3.54 billion for the first quarter of 2016 compared to a loss of US$14.7 million on revenue of US$703 million for the same period last year.
Q1 operating income was US$62.4 million – a turnaround from a loss of US$4.8 million in 2015. Interest expense rose from US$23.1 million to US$93.1 million for the period to produce a pre-tax loss of US$35.0 million.
During the period, XPO settled a civil suit brought by the U.S. Department of Justice against XPO, Estes Forwarding Worldwide and Estes Express Lines for logistics services provided during the U.S. Defense Transportation Coordination Initiative (DTCI) program.
XPO inherited the previously disclosed investigation when it acquired Con-way, the parent company of Menlo Logistics, in October of 2015.
The US$13 million settlement resolves disputed charges under the logistics contract that all three companies “strenuously deny” - noting the allegations have been “dismissed with prejudice, waived and released”.
Scott Fisher, president and CEO of Estes Forwarding Worldwide added: "During the entire course of our performance under the DTCI program, we complied with the terms of our contracts and well-established industry standards. We proudly stand by the quality services we provided to the government and the integrity with which we delivered them.”
Commenting on the Q1 results, XPO Logistics chairman and CEO Bradley Jacobs said: "2016 is off to a stellar start. We generated US$249 million of adjusted EBITDA in the quarter, and organic revenue growth of almost 12.0 percent, excluding fuel. Our freight brokerage and last mile businesses continued to lead our growth in North America, while in Europe, our transportation and logistics segments exceeded expectations for both sales and margins.”
Jacobs said XPO’s LTL business produced a 54 percent rise in adjusted operating income of US$58 million: “We're running LTL as a more efficient organization, with a US$90 million run rate of profit improvement already in hand. This puts us well on the way to achieving our target of improving annual profit by US$170 million to US$210 million by late next year,” he declared.