- Brokerage volume increased by 11% year-over-year, with
full-truckload volume growth of 8% and less-than-truckload volume
growth of 29% year-over-year
- Brokerage and companywide gross margin improved every month as
the quarter progressed
- Companywide gross margin of 17.4%; brokerage gross margin of
14.2%
- Companywide sales pipeline the largest it has been in four
years
RXO (NYSE: RXO) today announced its financial results for the
first quarter of 2024.
Drew Wilkerson, chief executive officer of RXO, said, “RXO
continued to deliver exceptional brokerage volume growth and strong
margin performance in the first quarter of 2024, despite persistent
softness in the freight market. Our brokerage business achieved
double-digit volume growth for the fourth-consecutive quarter, with
gross margin of 14.2%. Our complementary services continued to
perform well, and our companywide sales pipeline is the largest
it’s been in four years.
“We remain focused on gaining profitable market share, making
strategic investments and staying disciplined on cost,” Wilkerson
said. “In the first quarter, gross margin increased every month,
and we enter the second quarter with improved momentum. We expect
to deliver a significant increase in adjusted EBITDA sequentially.
RXO is well positioned to continue to outperform and deliver
significant earnings growth when the market improves.”
Companywide Results
RXO’s revenue was $0.9 billion for the first quarter, compared
to $1.0 billion in the first quarter of 2023. Gross margin was
17.4%, compared to 18.7% in the first quarter of 2023.
The company reported a first-quarter 2024 GAAP net loss of $15
million, compared to $0 of net income in the first quarter of 2023.
The first-quarter 2024 GAAP net loss included $12 million in
transaction, integration and restructuring costs. The adjusted net
loss in the quarter was $4 million, compared to adjusted net income
of $13 million in the first quarter of 2023.
Adjusted EBITDA was $15 million, compared to $37 million in the
first quarter of 2023. Adjusted EBITDA margin was 1.6%, compared to
3.7% in the first quarter of 2023.
Transaction, integration and restructuring costs, and
amortization of intangibles, impacted GAAP earnings per share by
$0.10, net of tax. For the first quarter, RXO reported a GAAP
diluted loss per share of $0.13. The adjusted diluted loss per
share was $0.03.
Brokerage
RXO’s brokerage business grew volume 11% year-over-year in the
first quarter, including full truckload volume growth of 8% and
less-than-truckload volume growth of 29%. Brokerage gross margin
was 14.2% in the first quarter.
Brokerage contract volume increased by 18% year-over-year in the
first quarter.
The company expects brokerage volumes to continue to grow on a
year-over-year basis in the second quarter of 2024.
Complementary Services
RXO’s complementary services gross margin was 20.6% for the
quarter, down 20 basis points year-over-year. Loads provided by
RXO’s managed transportation business to its brokerage business
increased year-over-year.
Second-Quarter Outlook
RXO expects second-quarter 2024 companywide adjusted EBITDA to
be between $24 million and $30 million. The company expects
second-quarter 2024 brokerage gross margin to be between 13% and
15%.
Conference Call
The company will hold a conference call and webcast on Thursday,
May 2 at 8 a.m. Eastern Daylight Time. Participants can call in
toll-free (from U.S./Canada) at 1-888-259-6580; international
callers dial +1-416-764-8624. The conference ID is 34295742.
A live webcast of the conference call will be available on the
investor relations area of the company’s website,
http://investors.rxo.com. A replay of the conference call will be
available through May 23, 2024, by calling toll-free (from
U.S./Canada) 1-877-674-7070; international callers dial
+1-416-764-8692. Use the passcode 295742#. Additionally, the call
will be archived on http://investors.rxo.com.
About RXO
RXO (NYSE: RXO) is a leading provider of asset-light
transportation solutions. RXO offers tech-enabled truck brokerage
services together with complementary solutions including managed
transportation, freight forwarding and last mile delivery. The
company combines massive capacity and cutting-edge technology to
move freight efficiently through supply chains across North
America. The company is headquartered in Charlotte, N.C. Visit
RXO.com for more information and connect with RXO on Facebook, X ,
LinkedIn, Instagram and YouTube.
Non-GAAP Financial Measures
We provide reconciliations of the non-GAAP financial measures
contained in this release to the most directly comparable measure
under GAAP, which are set forth in the financial tables attached to
this release.
The non-GAAP financial measures in this release include:
adjusted earnings before interest, taxes, depreciation and
amortization (“adjusted EBITDA”); adjusted EBITDA margin; and
adjusted net income (loss) and adjusted diluted earnings (loss) per
share (“adjusted EPS”).
We believe that these adjusted financial measures facilitate
analysis of our ongoing business operations because they exclude
items that may not reflect, or are unrelated to, RXO’s core
operating performance, and may assist investors with comparisons to
prior periods and assessing trends in our underlying businesses.
Other companies may calculate these non-GAAP financial measures
differently, and therefore our measures may not be comparable to
similarly titled measures of other companies. These non-GAAP
financial measures should only be used as supplemental measures of
our operating performance.
Adjusted EBITDA, adjusted EBITDA margin, adjusted net income
(loss) and adjusted EPS include adjustments for transaction and
integration costs, as well as restructuring costs and other
adjustments as set forth in the attached tables. Management uses
these non-GAAP financial measures in making financial, operating
and planning decisions and evaluating RXO’s ongoing
performance.
We believe that adjusted EBITDA and adjusted EBITDA margin
improve comparability from period to period by removing the impact
of our capital structure (interest and financing expenses), asset
base (depreciation and amortization), tax impacts and other
adjustments that management has determined do not reflect our core
operating activities and thereby assist investors with assessing
trends in our underlying business. We believe that adjusted net
income (loss) and adjusted EPS improve the comparability of our
operating results from period to period by removing the impact of
certain costs that management has determined do not reflect our
core operating activities, including amortization of
acquisition-related intangible assets, transaction and integration
costs, restructuring costs and other adjustments as set out in the
attached tables, and thereby may assist investors with comparisons
to prior periods and assessing trends in our underlying
business.
With respect to our financial outlook for the second quarter of
2024 adjusted EBITDA, a reconciliation of this non-GAAP measure to
the corresponding GAAP measure is not available without
unreasonable effort due to the variability and complexity of the
reconciling items described above that we exclude from this
non-GAAP measure. The variability of these items may have a
significant impact on our future GAAP financial results and, as a
result, we are unable to prepare the forward-looking statement of
income and statement of cash flows prepared in accordance with GAAP
that would be required to produce such a reconciliation.
Forward-looking Statements
This release includes forward-looking statements, including
statements relating to our 2024 outlook. All statements other than
statements of historical fact are, or may be deemed to be,
forward-looking statements. In some cases, forward-looking
statements can be identified by the use of forward-looking terms
such as "anticipate," "estimate," "believe," "continue," "could,"
"intend," "may," "plan," "predict," "should," "will," "expect,"
"project," "forecast," "goal," "outlook," "target,” or the negative
of these terms or other comparable terms. However, the absence of
these words does not mean that the statements are not
forward-looking. These forward-looking statements are based on
certain assumptions and analyses made by us in light of our
experience and our perception of historical trends, current
conditions and expected future developments, as well as other
factors we believe are appropriate in the circumstances.
These forward-looking statements are subject to known and
unknown risks, uncertainties and assumptions that may cause actual
results, levels of activity, performance, or achievements to be
materially different from any future results, levels of activity,
performance or achievements expressed or implied by such
forward-looking statements. Factors that might cause or contribute
to a material difference include the risks discussed in our filings
with the SEC and the following: competition and pricing pressures;
economic conditions generally; fluctuations in fuel prices;
increased carrier prices; severe weather, natural disasters,
terrorist attacks or similar incidents that cause material
disruptions to our operations or the operations of the third-party
carriers and independent contractors with which we contract; our
dependence on third-party carriers and independent contractors;
labor disputes or organizing efforts affecting our workforce and
those of our third-party carriers; legal and regulatory challenges
to the status of the third-party carriers with which we contract,
and their delivery workers, as independent contractors, rather than
employees; our ability to develop and implement suitable
information technology systems and prevent failures in or breaches
of such systems; the impact of potential cyber-attacks and
information technology or data security breaches; issues related to
our intellectual property rights; our ability to access the capital
markets and generate sufficient cash flow to satisfy our debt
obligations; litigation that may adversely affect our business or
reputation; increasingly stringent laws protecting the environment,
including transitional risks relating to climate change, that
impact our third-party carriers; governmental regulation and
political conditions; our ability to attract and retain qualified
personnel; our ability to successfully implement our cost and
revenue initiatives and other strategies; our ability to
successfully manage our growth; our reliance on certain large
customers for a significant portion of our revenue; damage to our
reputation through unfavorable publicity; our failure to meet
performance levels required by our contracts with our customers;
the inability to achieve the level of revenue growth, cash
generation, cost savings, improvement in profitability and margins,
fiscal discipline, or strengthening of competitiveness and
operations anticipated or targeted; a determination by the IRS that
the distribution or certain related separation transactions should
be treated as taxable transactions; and the impact of the
separation on our businesses, operations and results. All
forward-looking statements set forth in this release are qualified
by these cautionary statements and there can be no assurance that
the actual results or developments anticipated by us will be
realized or, even if substantially realized, that they will have
the expected consequences to or effects on us or our business or
operations. Forward-looking statements set forth in this release
speak only as of the date hereof, and we do not undertake any
obligation to update forward-looking statements to reflect
subsequent events or circumstances, changes in expectations or the
occurrence of unanticipated events, except to the extent required
by law.
RXO, Inc.
Condensed Consolidated
Statements of Operations
(Unaudited)
Three Months Ended March
31,
(Dollars in millions, shares in thousands,
except per share amounts)
2024
2023
Revenue
$
913
$
1,010
Cost of transportation and services
(exclusive of depreciation and amortization)
699
759
Direct operating expense (exclusive of
depreciation and amortization)
53
61
Sales, general and administrative
expense
145
153
Depreciation and amortization expense
16
18
Transaction and integration costs
1
6
Restructuring costs
11
8
Operating income (loss)
$
(12)
$
5
Other expense
1
—
Interest expense, net
8
8
Loss before income taxes
$
(21)
$
(3)
Income tax benefit
(6)
(3)
Net income (loss)
$
(15)
$
—
Earnings (loss) per share data
Basic earnings (loss) per share
$
(0.13)
$
—
Diluted earnings (loss) per share
$
(0.13)
$
—
Weighted-average common shares
outstanding
Basic weighted-average common shares
outstanding
117,217
116,600
Diluted weighted-average common shares
outstanding
117,217
119,369
RXO, Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
March 31,
December 31,
(Dollars in millions, shares in thousands,
except per share amounts)
2024
2023
ASSETS
Current assets
Cash and cash equivalents
$
7
$
5
Accounts receivable, net of $10 and $12 in
allowances, respectively
716
743
Other current assets
47
48
Total current assets
770
796
Long-term assets
Property and equipment, net of $305 and
$293 in accumulated depreciation, respectively
121
124
Operating lease assets
200
195
Goodwill
630
630
Identifiable intangible assets, net of
$121 and $118 in accumulated amortization, respectively
65
68
Other long-term assets
13
12
Total long-term assets
1,029
1,029
Total assets
$
1,799
$
1,825
LIABILITIES AND EQUITY
Current liabilities
Accounts payable
$
372
$
414
Accrued expenses
220
199
Short-term debt and current maturities of
long-term debt
16
3
Short-term operating lease liabilities
54
53
Other current liabilities
12
13
Total current liabilities
674
682
Long-term liabilities
Long-term debt and obligations under
finance leases
351
356
Deferred tax liability
1
7
Long-term operating lease liabilities
150
146
Other long-term liabilities
41
40
Total long-term liabilities
543
549
Commitments and Contingencies
Equity
Preferred stock, $0.01 par value; 10,000
shares authorized; 0 shares issued and
outstanding as of March 31, 2024 and
December 31, 2023
—
—
Common stock, $0.01 par value; 300,000
shares authorized; 117,544 and 117,026 shares issued and
outstanding as of March 31, 2024 and December 31, 2023,
respectively
1
1
Additional paid-in capital
593
590
Retained earnings (Accumulated
deficit)
(9)
6
Accumulated other comprehensive loss
(3)
(3)
Total equity
582
594
Total liabilities and equity
$
1,799
$
1,825
RXO, Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Three Months Ended March
31,
(In millions)
2024
2023
Operating activities
Net income (loss)
$
(15)
$
—
Adjustments to reconcile net income
(loss) to net cash from operating activities
Depreciation and amortization expense
16
18
Stock compensation expense
5
5
Deferred tax benefit
(7)
—
Other
2
1
Changes in assets and
liabilities
Accounts receivable
27
40
Other assets
(1)
(14)
Accounts payable
(41)
(9)
Accrued expenses and other liabilities
21
1
Net cash provided by operating
activities
7
42
Investing activities
Payment for purchases of property and
equipment
(11)
(12)
Net cash used in investing
activities
(11)
(12)
Financing activities
Proceeds from borrowings on revolving
credit facilities
39
—
Repayment of borrowings on revolving
credit facilities
(31)
—
Payment for tax withholdings related to
vesting of stock compensation awards
(2)
(7)
Other
—
(1)
Net cash provided by (used in)
financing activities
6
(8)
Effect of exchange rates on cash, cash
equivalents and restricted cash
—
1
Net increase in cash, cash equivalents
and restricted cash
2
23
Cash, cash equivalents, and restricted
cash, beginning of period
5
98
Cash, cash equivalents, and restricted
cash, end of period
$
7
$
121
Supplemental disclosure of cash flow
information:
Leased assets obtained in exchange for new
operating lease liabilities
$
23
$
10
Cash paid for income taxes, net
1
6
Cash paid for interest, net
1
—
RXO, Inc.
Revenue Disaggregated by
Service Offering
(Unaudited)
Three Months Ended March
31,
(In millions)
2024
2023
Revenue
Truck brokerage
$
564
$
600
Last mile
232
240
Managed transportation
97
117
Freight forwarding
55
80
Eliminations
(35)
(27)
Total
$
913
$
1,010
RXO, Inc.
Reconciliation of Net Income
(Loss) to Adjusted EBITDA and Adjusted EBITDA Margin
(Unaudited)
Three Months Ended March
31,
(In millions)
2024
2023
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Net income (loss)
$
(15)
$
—
Interest expense, net
8
8
Income tax benefit
(6)
(3)
Depreciation and amortization expense
16
18
Transaction and integration costs
1
6
Restructuring costs
11
8
Adjusted EBITDA (1)
$
15
$
37
Revenue
$
913
$
1,010
Adjusted EBITDA margin (1) (2)
1.6%
3.7%
(1) See the “Non-GAAP Financial Measures”
section of the press release.
(2) Adjusted EBITDA margin is calculated
as Adjusted EBITDA divided by Revenue.
RXO, Inc.
Reconciliation of Net Income
(Loss) to Adjusted Net Income (Loss) and Adjusted Diluted Earnings
(Loss) Per Share
(Unaudited)
Three Months Ended March
31,
(Dollars in millions, shares in thousands,
except per share amounts)
2024
2023
Reconciliation of Net Income (Loss) to
Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per
Share
Net income (loss)
$
(15)
$
—
Amortization of intangible assets
3
3
Transaction and integration costs
1
6
Restructuring costs
11
8
Income tax associated with adjustments
above (1)
(4)
(4)
Adjusted net income (loss) (2)
$
(4)
$
13
Adjusted diluted earnings (loss) per
share (2)
$
(0.03)
$
0.11
Weighted-average shares
outstanding
Diluted weighted-average shares
outstanding
117,217
119,369
(1) The tax impact of non-GAAP adjustments
represents the tax expense calculated using the applicable
statutory tax rate that would have been incurred had these
adjustments been excluded from net income (loss). Our estimated tax
rate on non-GAAP adjustments may differ from our GAAP tax rate due
to differences in the methodologies applied.
(2) See the “Non-GAAP Financial Measures”
section of the press release.
RXO, Inc.
Calculation of Gross Margin
and Gross Margin as a Percentage of Revenue
(Unaudited)
Three Months Ended March
31,
(Dollars in millions)
2024
2023
Revenue
Truck brokerage
$
564
$
600
Complementary services (1)
384
437
Eliminations
(35)
(27)
Revenue
$
913
$
1,010
Cost of transportation and services
(exclusive of depreciation and amortization)
Truck brokerage
$
484
$
502
Complementary services (1)
250
284
Eliminations
(35)
(27)
Cost of transportation and services
(exclusive of depreciation and amortization)
$
699
$
759
Direct operating expense (exclusive of
depreciation and amortization)
Truck brokerage
$
—
$
—
Complementary services (1)
53
61
Direct operating expense (exclusive of
depreciation and amortization)
$
53
$
61
Direct depreciation and amortization
expense
Truck brokerage
$
—
$
—
Complementary services (1)
2
1
Direct depreciation and amortization
expense
$
2
$
1
Gross margin
Truck brokerage
$
80
$
98
Complementary services (1)
79
91
Gross margin
$
159
$
189
Gross margin as a percentage of
revenue
Truck brokerage
14.2 %
16.3 %
Complementary services (1)
20.6 %
20.8 %
Gross margin as a percentage of
revenue
17.4 %
18.7 %
(1) Complementary services include freight
forwarding, last mile and managed transportation services.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240502179869/en/
Media Contact Erin Kelly erin.kelly@rxo.com
Investor Contact Kevin Sterling
kevin.sterling@rxo.com
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