XPO Logistics posts $2.7M 1Q net loss, acquires Continental Freight

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Updated May 10, 2012

XPO Logistics Inc. on Wednesday, May 9, announced that total revenue for the first quarter of 2012 was $44.6 million for the quarter, a 7.4 percent increase from the same period last year. Net loss was $2.7 million compared with net income of $1.1 million.

The company also announced its acquisition on Tuesday, May 8, of Continental Freight Services Inc. – a nonasset-based third-party logistics company providing truck brokerage services – for $3.4 million with a potential earn-out of up to $0.3 million. Continental Freight is headquartered in Columbia, S.C., with satellite offices in Texas, Florida and the Carolinas. Continental Freight generated trailing 12 months revenue of about $22 million as of March 31.

“Our strategy is to scale up our operations through acquisitions, cold-starts and organic growth,” said Bradley Jacobs, chairman and chief executive officer of Buchanan, Mich.-based XPO Logistics. “Continental is a good strategic fit because we can scale it up quickly by adding salespeople and carrier capacity. Our cold-start program is running ahead of plan. Given our cold-start performance and healthy backlog of acquisition candidates, we’re comfortable with our target of a $500 million revenue run rate by year-end.”

The company launched a new Website at www.xpologistics.com, providing online functionality to request a quote, track a load, register as a carrier, apply for employment and access investor resources. XPO Logistics said the new site marks the first of several customer-facing Web and mobile products planned for release this year, including self-service freight management tools for shippers.

“While it was a very successful quarter in terms of executing our plan, the investments in new infrastructure impacted our earnings, as expected,” Jacobs said. “We also experienced market softness for both expedited and freight forwarding services. However, our truck brokerage business delivered very strong growth, with same-store profitability more than doubling year-over-year. We’re focused on optimizing our operations within each operating segment to position the company for substantial value creation in the coming years.”