UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 8-K
___________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 13, 2024
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(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
Registrant's telephone number, including area code: ( | ||||||||
| Not Applicable | ||||||||
| (Former name or former address, if changed since last report) | ||||||||
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act: | ||||||||
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On February 13, 2024, GXO Logistics, Inc. (the “Company”) issued a press release announcing its results of operations for the fiscal quarter and year ended December 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) The following exhibits are being filed herewith:
| Exhibit Number | Description | |||||||
| 99.1 | ||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: February 13, 2024 | GXO LOGISTICS, INC. | ||||||||||
By: | /s/ Baris Oran | ||||||||||
Name: | Baris Oran | ||||||||||
Title: | Chief Financial Officer | ||||||||||
| (Principal Financial Officer) | |||||||||||
Exhibit 99.1
GXO Reports Fourth Quarter and Full Year 2023 Results
Highlights
•Fourth quarter revenue of $2.6 billion; net income attributable to GXO of $73 million; adjusted EBITDA1 of $193 million; diluted EPS of $0.61 and adjusted diluted EPS1 of $0.70
•Full year revenue of $9.8 billion; net income attributable to GXO of $229 million; adjusted EBITDA1 of $741 million; diluted EPS of $1.92 and adjusted diluted EPS1 of $2.59
•Full year cash flows from operations of $558 million, equivalent to 244% of net income attributable to GXO, and free cash flow1 of $302 million; equivalent to 41% of adjusted EBITDA1
•Announced 2024 guidance2:
◦Organic revenue growth1 of 2%-5%
◦Adjusted EBITDA1 of $760-$790 million
◦Adjusted diluted earnings per share1 of $2.70-$2.90
◦Free cash flow conversion1 of 30%-40% of adjusted EBITDA1
Business Highlights
•Signed more than $1 billion annualized revenue in 2023; ~40% from outsourcing
•~$600 million of incremental revenue booked for 2024, and ~$230 million of additional incremental revenue booked for 2025; 29% higher than last year
•Sales pipeline remains strong at approximately $2 billion
•Closed the acquisition of PFSweb on October 23, 2023
GREENWICH, Conn. — February 13, 2024 — GXO Logistics, Inc. (NYSE: GXO) today announced results for the fourth quarter and full year 2023.
Malcolm Wilson, Chief Executive Officer of GXO, said, “In the fourth quarter, we delivered a successful operational peak for our customers, capping off what was a truly great year for GXO.
“In 2023, GXO delivered strong growth in revenue, net income and adjusted EBITDA, as well as record cash flows from operations and free cash flow, and a stellar return on invested capital. We closed a tremendous $1 billion of annualized new business wins, with nearly 40% coming from outsourcing as more companies look to GXO to transform their supply chains. Through our acquisition of PFS, we welcomed over 100 fantastic brands in high-growth verticals, and we are now focused on supercharging PFS’ growth.
“During the year, GXO continued to lead the industry in automation, deploying a record amount of robotics and winning multiple long-term, highly automated contracts with global blue-chip companies. These companies are looking to GXO for continued innovation, and we anticipate the proliferation of AI and automation deployment across our operations to accelerate in 2024 and beyond.
1 For definitions of non-GAAP measures see the “Non-GAAP Financial Measures” section in this press release.
2 Our guidance reflects current FX rates.
“We’re uniquely positioned to help our customers make their supply chain operations more productive today and more resilient tomorrow. Our 2024 guidance reflects another year of solid revenue growth as well as continued strength in profit and cash flow, and we are very excited about our long-term growth trajectory.”
Fourth Quarter 2023 Results
Revenue increased to $2.6 billion, compared with $2.5 billion for the fourth quarter 2022.
Operating income increased to $87 million, compared with $74 million for the fourth quarter 2022. Net income attributable to GXO increased to $73 million, compared with $46 million for the fourth quarter 2022. Diluted earnings per share increased to $0.61, compared with $0.39 for the fourth quarter 2022.
Adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA1”) was $193 million, compared with $205 million for the fourth quarter 2022. Adjusted net income attributable to GXO1 was $84 million, compared with $99 million for the fourth quarter 2022. Adjusted diluted earnings per share1 was $0.70, compared with $0.83 for the fourth quarter 2022.
GXO generated $215 million of cash flows from operations, compared with $226 million for the fourth quarter 2022. In the fourth quarter of 2023, GXO generated $151 million of free cash flow1, compared with $141 million for the fourth quarter 2022.
Full Year 2023 Results
Revenue increased to $9.8 billion, compared with $9.0 billion for 2022.
Operating income increased to $318 million, compared with $242 million for 2022. Net income attributable to GXO increased to $229 million, compared with $197 million for 2022. Diluted earnings per share increased to $1.92, compared with $1.67 for 2022.
Adjusted EBITDA1 increased to $741 million, compared with $728 million for 2022. Adjusted net income attributable to GXO1 was $309 million, compared with $335 million for 2022. Adjusted diluted earnings per share1 was $2.59, compared with $2.85 for 2022.
GXO generated $558 million of cash flows from operations, compared with $542 million for 2022. GXO generated $302 million of free cash flow1, compared with $240 million for 2022. Cash flows from operations to net income attributable to GXO and free cash flow conversion1 ratios were 244% and 41%, respectively, for 2023. Cash flows from operations to net income attributable to GXO and free cash flow conversion1 ratios were 275% and 33%, respectively, for 2022.
Net income attributable to GXO to average invested capital and operating return on invested capital1 ratios were 22% and 36%, respectively, for 2023.
Cash Balances and Outstanding Debt
As of December 31, 2023, cash and cash equivalents and debt outstanding were $468 million and $1.6 billion, respectively. GXO’s balance sheet remains investment grade and received credit rating outlook upgrades from S&P, Moody’s and Fitch during 2023.
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2024 Guidance2
GXO’s 2024 financial outlook is as follows:
•Organic revenue growth1 of 2% to 5%;
•Adjusted EBITDA1 of $760 million to $790 million;
•Adjusted diluted earnings per share1 of $2.70 to $2.90; and
•Free cash flow conversion1 of 30% to 40% of adjusted EBITDA1.
Conference Call
GXO will hold a conference call on Wednesday, February 14, 2024, at 8:30 a.m. Eastern Time. Participants can call toll-free (from US/Canada) 877-407-8029; international callers dial +1 201-689-8029. Conference ID: 13743710. A live webcast of the conference will be available on the Investor Relations area of the company’s website, investors.gxo.com. The conference will be archived until February 28, 2024. To access the replay by phone, call toll-free (from US/Canada) 877-660-6853; international callers dial +1 201-612-7415. Use participant passcode 13743710.
About GXO Logistics
GXO Logistics, Inc. (NYSE: GXO) is the world’s largest pure-play contract logistics provider and is benefiting from the rapid growth of ecommerce, automation and outsourcing. GXO is committed to providing a diverse, world-class workplace for more than 130,000 team members across more than 970 facilities totaling approximately 200 million square feet. The company partners with the world’s leading blue-chip companies to solve complex logistics challenges with technologically advanced supply chain and ecommerce solutions, at scale and with speed. GXO corporate headquarters is in Greenwich, Connecticut, USA. Visit GXO.com for more information and connect with GXO on LinkedIn, X (formerly Twitter), Facebook, Instagram and YouTube.
Non-GAAP Financial Measures
As required by the rules of the Securities and Exchange Commission (“SEC”), we provide reconciliations of the non-GAAP financial measures contained in this press release to the most directly comparable measure under GAAP, which are set forth in the financial tables below.
GXO’s non-GAAP financial measures in this press release include: adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), adjusted EBITDA margin, adjusted earnings before interest, taxes and amortization (“adjusted EBITA”), adjusted EBITA, net of income taxes paid, adjusted EBITA margin, adjusted net income attributable to GXO, adjusted earnings per share (basic and diluted) (“adjusted EPS”), free cash flow, free cash flow conversion, organic revenue, organic revenue growth, net leverage ratio, net debt, and operating return on invested capital (“ROIC”).
We believe that the above adjusted financial measures facilitate analysis of our ongoing business operations because they exclude items that may not be reflective of, or are unrelated to, GXO’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 used by other companies. GXO’s non-GAAP financial measures should only be used as supplemental measures of our operating performance.
Adjusted EBITDA, adjusted EBITA, adjusted net income attributable to GXO and adjusted EPS include adjustments for transaction and integration costs, as well as restructuring costs and other adjustments as set forth in the financial tables below. Transaction and integration adjustments are generally incremental costs that result from an actual or planned acquisition, divestiture or spin-off and may include transaction
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costs, consulting fees, retention awards, internal salaries and wages (to the extent the individuals are assigned full-time to integration and transformation activities) and certain costs related to integrating and separating IT systems. Restructuring costs primarily relate to severance costs associated with business optimization initiatives.
We believe that free cash flow and free cash flow conversion are important measures of our ability to repay maturing debt or fund other uses of capital that we believe will enhance stockholder value. We calculate free cash flow as cash flows from operations less capital expenditures plus proceeds from sale of property and equipment. We calculate free cash flow conversion as free cash flow divided by adjusted EBITDA, expressed as a percentage.
We believe that adjusted EBITDA, adjusted EBITDA margin, adjusted EBITA, adjusted EBITA, net of income taxes paid, and adjusted EBITA 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 as set out in the attached tables, which management has determined are not reflective of core operating activities and thereby assist investors with assessing trends in our underlying businesses.
We believe that adjusted net income attributable to GXO and adjusted EPS improve the comparability of our operating results from period to period by removing the impact of certain costs and gains, which management has determined are not reflective of our core operating activities, including amortization of acquisition-related intangible assets.
We believe that organic revenue and organic revenue growth are important measures because they exclude the impact of foreign currency exchange rate fluctuations, revenue from acquired businesses and revenue from deconsolidated operations.
We believe that net leverage ratio and net debt are important measures of our overall liquidity position and are calculated by removing cash and cash equivalents from our total debt and net debt as a ratio of our adjusted EBITDA. We calculate ROIC as our adjusted EBITA, net of income taxes paid divided by the average invested capital. We believe ROIC provides investors with an important perspective on how effectively GXO deploys capital and use this metric internally as a high-level target to assess overall performance throughout the business cycle.
Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating GXO’s ongoing performance.
With respect to our financial targets for full-year 2024 organic revenue growth, adjusted EBITDA, adjusted diluted EPS, and free cash flow conversion, a reconciliation of these non-GAAP measures to the corresponding GAAP measures is not available without unreasonable effort due to the variability and complexity of the reconciling items described above that we exclude from these non-GAAP target measures. 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 statements of income and cash flows prepared in accordance with GAAP, that would be required to produce such a reconciliation.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including our full year 2024 financial targets of organic revenue growth, adjusted EBITDA, adjusted diluted earnings per share and free cash flow conversion; the expected incremental revenue in 2024 and 2025 from new customer wins in 2023; the proliferation of AI and automation deployment across our operations to accelerate in 2024 and beyond; continued strong performance in
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2024; and long-term growth trajectory. 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,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” “trajectory” 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 the company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors the company believes 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, but are not limited to, the risks discussed in our filings with the SEC and the following: economic conditions generally; supply chain challenges, including labor shortages; our ability to align our investments in capital assets, including equipment, and warehouses, to our customers’ demands; our ability to successfully integrate and realize anticipated synergies, cost savings and profit improvement opportunities with respect to acquired companies; unsuccessful acquisitions or other risks or developments that adversely affect our financial condition and results; our ability to develop and implement suitable information technology systems and prevent failures in or breaches of such systems; our indebtedness; our ability to raise debt and equity capital; litigation; labor matters, including our ability to manage our subcontractors, and risks associated with labor disputes at our customers’ facilities and efforts by labor organizations to organize our employees; risks associated with defined benefit plans for our current and former employees; our inability to attract or retain necessary talent; the increased costs associated with labor; fluctuations in currency exchange rates; fluctuations in fixed and floating interest rates; seasonal fluctuations; issues related to our intellectual property rights; governmental regulation, including environmental laws, trade compliance laws, as well as changes in international trade policies and tax regimes; governmental or political actions, including the United Kingdom’s exit from the European Union; natural disasters, terrorist attacks or similar incidents; damage to our reputation; a material disruption of the company's operations; 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; failure in properly handling the inventory of our customers; the impact of potential cyber-attacks and information technology or data security breaches; the inability to implement technology initiatives successfully; our ability to achieve our Environmental, Social and Governance goals; and a determination by the IRS that the distribution or certain related spin-off transactions should be treated as taxable transactions.
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.
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Investor Contact | ||||||||
Chris Jordan | ||||||||
| +1 (203) 536 8493 | ||||||||
chris.jordan@gxo.com | ||||||||
Media Contact | ||||||||
Matthew Schmidt | ||||||||
| +1 (203) 307-2809 | ||||||||
matt.schmidt@gxo.com | ||||||||
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GXO Logistics, Inc.
Consolidated Statements of Operations
(Unaudited)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (Dollars in millions, shares in thousands, except per share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| Revenue | $ | 2,590 | $ | 2,467 | $ | 9,778 | $ | 8,993 | ||||||||||||||||||
| Direct operating expense | 2,160 | 2,035 | 8,035 | 7,443 | ||||||||||||||||||||||
| Selling, general and administrative expense | 237 | 249 | 998 | 886 | ||||||||||||||||||||||
| Depreciation and amortization expense | 93 | 87 | 361 | 329 | ||||||||||||||||||||||
| Transaction and integration costs | 12 | 4 | 34 | 61 | ||||||||||||||||||||||
| Restructuring costs and other | 1 | 18 | 32 | 32 | ||||||||||||||||||||||
| Operating income | 87 | 74 | 318 | 242 | ||||||||||||||||||||||
| Other income (expense), net | (7) | (5) | 1 | 51 | ||||||||||||||||||||||
| Interest expense, net | (12) | (10) | (53) | (29) | ||||||||||||||||||||||
| Income before income taxes | 68 | 59 | 266 | 264 | ||||||||||||||||||||||
| Income tax (expense) benefit | 5 | (13) | (33) | (64) | ||||||||||||||||||||||
| Net income | 73 | 46 | 233 | 200 | ||||||||||||||||||||||
| Net income attributable to noncontrolling interests | — | — | (4) | (3) | ||||||||||||||||||||||
| Net income attributable to GXO | $ | 73 | $ | 46 | $ | 229 | $ | 197 | ||||||||||||||||||
| Earnings per share | ||||||||||||||||||||||||||
| Basic | $ | 0.61 | $ | 0.39 | $ | 1.93 | $ | 1.68 | ||||||||||||||||||
| Diluted | $ | 0.61 | $ | 0.39 | $ | 1.92 | $ | 1.67 | ||||||||||||||||||
| Weighted-average common shares outstanding | ||||||||||||||||||||||||||
| Basic | 118,983 | 118,658 | 118,908 | 117,050 | ||||||||||||||||||||||
| Diluted | 119,671 | 119,126 | 119,490 | 117,616 | ||||||||||||||||||||||
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GXO Logistics, Inc.
Consolidated Balance Sheets
(Unaudited)
| December 31, | ||||||||||||||
| (Dollars in millions, shares in thousands, except per share amounts) | 2023 | 2022 | ||||||||||||
| ASSETS | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | 468 | $ | 495 | ||||||||||
| Accounts receivable, net of allowance of $11 and $12 | 1,753 | 1,647 | ||||||||||||
| Other current assets | 347 | 286 | ||||||||||||
| Total current assets | 2,568 | 2,428 | ||||||||||||
| Long-term assets | ||||||||||||||
| Property and equipment, net of accumulated depreciation of $1,545 and $1,297 | 953 | 960 | ||||||||||||
| Operating lease assets | 2,201 | 2,227 | ||||||||||||
| Goodwill | 2,891 | 2,728 | ||||||||||||
| Intangible assets, net of accumulated amortization of $528 and $456 | 567 | 570 | ||||||||||||
| Other long-term assets | 327 | 306 | ||||||||||||
| Total long-term assets | 6,939 | 6,791 | ||||||||||||
| Total assets | $ | 9,507 | $ | 9,219 | ||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| Current liabilities | ||||||||||||||
| Accounts payable | $ | 709 | $ | 717 | ||||||||||
| Accrued expenses | 966 | 995 | ||||||||||||
| Current debt | 27 | 67 | ||||||||||||
| Current operating lease liabilities | 597 | 560 | ||||||||||||
| Other current liabilities | 327 | 193 | ||||||||||||
| Total current liabilities | 2,626 | 2,532 | ||||||||||||
| Long-term liabilities | ||||||||||||||
| Long-term debt | 1,620 | 1,739 | ||||||||||||
| Long-term operating lease liabilities | 1,842 | 1,853 | ||||||||||||
| Other long-term liabilities | 473 | 417 | ||||||||||||
| Total long-term liabilities | 3,935 | 4,009 | ||||||||||||
| Commitments and Contingencies | ||||||||||||||
| Stockholders’ Equity | ||||||||||||||
| Common Stock, $0.01 par value per share; 300,000 shares authorized, 119,057 and 118,728 shares issued and outstanding | 1 | 1 | ||||||||||||
| Preferred Stock, $0.01 par value per share; 10,000 shares authorized, none issued and outstanding | — | — | ||||||||||||
| Additional paid-in capital | 2,598 | 2,575 | ||||||||||||
| Retained earnings | 552 | 323 | ||||||||||||
| Accumulated other comprehensive loss | (239) | (254) | ||||||||||||
| Total stockholders’ equity before noncontrolling interests | 2,912 | 2,645 | ||||||||||||
| Noncontrolling interests | 34 | 33 | ||||||||||||
| Total equity | 2,946 | 2,678 | ||||||||||||
| Total liabilities and equity | $ | 9,507 | $ | 9,219 | ||||||||||
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GXO Logistics, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
| Year Ended December 31, | ||||||||||||||
| (In millions) | 2023 | 2022 | ||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net income | $ | 233 | $ | 200 | ||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||||
| Depreciation and amortization expense | 361 | 329 | ||||||||||||
| Stock-based compensation expense | 35 | 33 | ||||||||||||
| Deferred tax benefit | (41) | (7) | ||||||||||||
| Other | 23 | (17) | ||||||||||||
| Changes in operating assets and liabilities | ||||||||||||||
| Accounts receivable | (17) | (71) | ||||||||||||
| Other assets | 28 | 24 | ||||||||||||
| Accounts payable | (3) | 45 | ||||||||||||
| Accrued expenses and other liabilities | (61) | 6 | ||||||||||||
| Net cash provided by operating activities | 558 | 542 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Capital expenditures | (274) | (342) | ||||||||||||
| Proceeds from sale of property and equipment | 18 | 40 | ||||||||||||
| Acquisition of business, net of cash acquired | (149) | (876) | ||||||||||||
| Cross-currency swap agreements settlement | (3) | 21 | ||||||||||||
| Other | (2) | 8 | ||||||||||||
| Net cash used in investing activities | (410) | (1,149) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Proceeds from debt, net | — | 917 | ||||||||||||
| Repayments of debt, net | (140) | (82) | ||||||||||||
| Repayment of finance lease obligations | (29) | (33) | ||||||||||||
| Taxes paid related to net share settlement of equity awards | (12) | (16) | ||||||||||||
| Other | (5) | 1 | ||||||||||||
| Net cash (used in) provided by financing activities | (186) | 787 | ||||||||||||
| Effect of exchange rates on cash and cash equivalents | 13 | (18) | ||||||||||||
| Net (decrease) increase in cash, restricted cash and cash equivalents | (25) | 162 | ||||||||||||
| Cash, restricted cash and cash equivalents, beginning of year | 495 | 333 | ||||||||||||
| Cash, restricted cash and cash equivalents, end of year | $ | 470 | $ | 495 | ||||||||||
| Reconciliation of cash, restricted cash and cash equivalents | ||||||||||||||
| Cash and cash equivalents | $ | 468 | $ | 495 | ||||||||||
| Restricted cash (included in Other long-term assets) | 2 | — | ||||||||||||
| Total cash, restricted cash and cash equivalents | $ | 470 | $ | 495 | ||||||||||
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GXO Logistics, Inc.
Consolidated Statements of Cash Flows
| Year Ended December 31, | ||||||||||||||
| (In millions) | 2023 | 2022 | ||||||||||||
| Supplemental cash flow information: | ||||||||||||||
Cash paid for interest, net | $ | 57 | $ | 34 | ||||||||||
Cash paid for income taxes, net | 84 | 111 | ||||||||||||
Noncash investing and financing activities: | ||||||||||||||
Common stock issued for acquisition | $ | — | $ | 204 | ||||||||||
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GXO Logistics, Inc.
Key Data
Disaggregation of Revenue
(Unaudited)
Revenue disaggregated by geographical area was as follows:
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (In millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| United Kingdom | $ | 969 | $ | 922 | $ | 3,664 | $ | 3,293 | ||||||||||||||||||
| United States | 792 | 786 | 2,909 | 2,861 | ||||||||||||||||||||||
| Netherlands | 221 | 191 | 831 | 699 | ||||||||||||||||||||||
| France | 204 | 199 | 830 | 729 | ||||||||||||||||||||||
| Spain | 133 | 128 | 529 | 488 | ||||||||||||||||||||||
| Italy | 103 | 88 | 382 | 331 | ||||||||||||||||||||||
| Other | 168 | 153 | 633 | 592 | ||||||||||||||||||||||
| Total | $ | 2,590 | $ | 2,467 | $ | 9,778 | $ | 8,993 | ||||||||||||||||||
The Company’s revenue can also be disaggregated by the customer’s primary industry. Revenue disaggregated by industries was as follows:
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (In millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| Omnichannel retail | $ | 1,092 | $ | 1,031 | $ | 4,100 | $ | 3,649 | ||||||||||||||||||
| Technology and consumer electronics | 382 | 374 | 1,467 | 1,337 | ||||||||||||||||||||||
| Food and beverage | 327 | 318 | 1,331 | 1,327 | ||||||||||||||||||||||
| Industrial and manufacturing | 266 | 269 | 1,078 | 1,076 | ||||||||||||||||||||||
| Consumer packaged goods | 325 | 252 | 1,027 | 915 | ||||||||||||||||||||||
| Other | 198 | 223 | 775 | 689 | ||||||||||||||||||||||
| Total | $ | 2,590 | $ | 2,467 | $ | 9,778 | $ | 8,993 | ||||||||||||||||||
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GXO Logistics, Inc.
Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITA
and Adjusted EBITDA and Adjusted EBITA Margins
(Unaudited)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (In millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| Net income attributable to GXO | $ | 73 | $ | 46 | $ | 229 | $ | 197 | ||||||||||||||||||
| Net income attributable to noncontrolling interest | — | — | 4 | 3 | ||||||||||||||||||||||
| Net income | $ | 73 | $ | 46 | $ | 233 | $ | 200 | ||||||||||||||||||
| Interest expense, net | 12 | 10 | 53 | 29 | ||||||||||||||||||||||
| Income tax expense (benefit) | (5) | 13 | 33 | 64 | ||||||||||||||||||||||
| Depreciation and amortization expense | 93 | 87 | 361 | 329 | ||||||||||||||||||||||
| Transaction and integration costs | 12 | 4 | 34 | 61 | ||||||||||||||||||||||
| Restructuring costs and other | 1 | 18 | 32 | 32 | ||||||||||||||||||||||
| Unrealized (gain) loss on foreign currency options and other | 7 | 27 | (5) | 13 | ||||||||||||||||||||||
Adjusted EBITDA(1) | $ | 193 | $ | 205 | $ | 741 | $ | 728 | ||||||||||||||||||
| Less: Depreciation | 76 | 67 | 290 | 261 | ||||||||||||||||||||||
Adjusted EBITA(1) | $ | 117 | $ | 138 | $ | 451 | $ | 467 | ||||||||||||||||||
| Revenue | $ | 2,590 | $ | 2,467 | $ | 9,778 | $ | 8,993 | ||||||||||||||||||
Adjusted EBITDA margin(1)(2) | 7.5 | % | 8.3 | % | 7.6 | % | 8.1 | % | ||||||||||||||||||
Adjusted EBITA margin(1)(3) | 4.5 | % | 5.6 | % | 4.6 | % | 5.2 | % | ||||||||||||||||||
(1) See the “Non-GAAP Financial Measures” section of this press release.
(2) Adjusted EBITDA margin is calculated as adjusted EBITDA divided by revenue.
(3) Adjusted EBITA margin is calculated as adjusted EBITA divided by revenue.
12
GXO Logistics, Inc.
Reconciliation of Net Income to Adjusted Net Income
and Adjusted Earnings Per Share
(Unaudited)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (Dollars in millions, shares in thousands, except per share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Net income attributable to GXO | $ | 73 | $ | 46 | $ | 229 | $ | 197 | ||||||||||||||||||
Amortization expense | 17 | 20 | 71 | 68 | ||||||||||||||||||||||
| Transaction and integration costs | 12 | 4 | 34 | 61 | ||||||||||||||||||||||
Restructuring costs and other | 1 | 18 | 32 | 32 | ||||||||||||||||||||||
Unrealized (gain) loss on foreign currency options and other | 7 | 27 | (5) | 13 | ||||||||||||||||||||||
Income tax associated with the adjustments above(1) | (9) | (16) | (30) | (36) | ||||||||||||||||||||||
Discrete tax benefit(2) | (17) | — | (22) | — | ||||||||||||||||||||||
Adjusted net income attributable to GXO(3) | $ | 84 | $ | 99 | $ | 309 | $ | 335 | ||||||||||||||||||
Adjusted basic earnings per share(3) | $ | 0.71 | $ | 0.83 | $ | 2.60 | $ | 2.86 | ||||||||||||||||||
Adjusted diluted earnings per share(3) | $ | 0.70 | $ | 0.83 | $ | 2.59 | $ | 2.85 | ||||||||||||||||||
| Weighted-average common shares outstanding | ||||||||||||||||||||||||||
| Basic | 118,983 | 118,658 | 118,908 | 117,050 | ||||||||||||||||||||||
| Diluted | 119,671 | 119,126 | 119,490 | 117,616 | ||||||||||||||||||||||
(1) The income tax rate applied to items is based on the GAAP annual effective tax rate.
(2) Discrete tax benefit from intangible assets and the release of valuation allowances.
(3) See the “Non-GAAP Financial Measures” section of this press release.
13
GXO Logistics, Inc.
Other Reconciliations
(Unaudited)
Reconciliation of Cash Flows from Operations to Free Cash Flow:
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (In millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Cash flows from operations | $ | 215 | $ | 226 | $ | 558 | $ | 542 | ||||||||||||||||||
Capital expenditures | (69) | (103) | (274) | (342) | ||||||||||||||||||||||
Proceeds from sales of property and equipment | 5 | 18 | 18 | 40 | ||||||||||||||||||||||
Free cash flow(1) | $ | 151 | $ | 141 | $ | 302 | $ | 240 | ||||||||||||||||||
Cash flows from operations to net income attributable to GXO | 243.7 | % | 275.1 | % | ||||||||||||||||||||||
Free cash flow conversion(1) | 40.8 | % | 33.0 | % | ||||||||||||||||||||||
(1) See the “Non-GAAP Financial Measures” section of this press release. The Company calculates free cash flow conversion as free cash flow divided by adjusted EBITDA, expressed as a percentage.
Reconciliation of Revenue to Organic Revenue:
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (In millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| Revenue | $ | 2,590 | $ | 2,467 | $ | 9,778 | $ | 8,993 | ||||||||||||||||||
Revenue from acquired business(1) | (82) | — | (460) | — | ||||||||||||||||||||||
Revenue from deconsolidation | — | — | — | (20) | ||||||||||||||||||||||
| Foreign exchange rates | (97) | — | (140) | — | ||||||||||||||||||||||
Organic revenue(2) | $ | 2,411 | $ | 2,467 | $ | 9,178 | $ | 8,973 | ||||||||||||||||||
Revenue growth(3) | 5.0% | 8.7% | ||||||||||||||||||||||||
Organic revenue growth(2)(4) | (2.3)% | 2.3% | ||||||||||||||||||||||||
(1) The Company excludes revenue from the acquired business in the current period for which there are no comparable revenues in the prior period.
(2) See the “Non-GAAP Financial Measures” section of this press release.
(3) Revenue growth is calculated as the change in the period-over-period revenue divided by the prior period, expressed as a percentage.
(4) Organic revenue growth is calculated as the change in the period-over-period organic revenue divided by the prior period, expressed as a percentage.
14
GXO Logistics, Inc.
Liquidity Reconciliations
(Unaudited)
Reconciliation of Total Debt and Net Debt:
| (In millions) | December 31, 2023 | |||||||
| Current debt | $ | 27 | ||||||
| Long-term debt | 1,620 | |||||||
| Total debt | $ | 1,647 | ||||||
| Less: Cash and cash equivalents | (468) | |||||||
Net debt(1) | $ | 1,179 | ||||||
(1) See the “Non-GAAP Financial Measures” section of this press release.
Reconciliation of Total debt to Net income attributable to GXO Ratio:
| (In millions) | December 31, 2023 | |||||||
Total debt | $ | 1,647 | ||||||
| Net income attributable to GXO | $ | 229 | ||||||
| Debt to net income attributable to GXO ratio | 7.2x | |||||||
Reconciliation of Net Leverage Ratio:
| (In millions) | December 31, 2023 | |||||||
| Net debt | $ | 1,179 | ||||||
Adjusted EBITDA(1) | $ | 741 | ||||||
Net leverage ratio(1) | 1.6x | |||||||
(1) See the “Non-GAAP Financial Measures” section of this press release.
15
GXO Logistics, Inc.
Liquidity Reconciliations
(Unaudited)
Reconciliation of Total Debt and Net Debt:
| (In millions) | December 31, 2022 | |||||||
| Current debt | $ | 67 | ||||||
| Long-term debt | 1,739 | |||||||
| Total debt | $ | 1,806 | ||||||
| Less: Cash and cash equivalents | (495) | |||||||
Net debt(1) | $ | 1,311 | ||||||
(1) See the “Non-GAAP Financial Measures” section of this press release.
Reconciliation of Total debt to Net income attributable to GXO Ratio:
| (In millions) | December 31, 2022 | |||||||
Total debt | $ | 1,806 | ||||||
| Net income attributable to GXO | $ | 197 | ||||||
| Debt to net income attributable to GXO ratio | 9.2x | |||||||
Reconciliation of Net Leverage Ratio:
| (In millions) | December 31, 2022 | |||||||
| Net debt | $ | 1,311 | ||||||
Adjusted EBITDA(1) | $ | 728 | ||||||
Net leverage ratio(1) | 1.8x | |||||||
(1) See the “Non-GAAP Financial Measures” section of this press release.
16
GXO Logistics, Inc.
Return on Invested Capital
(Unaudited)
Adjusted EBITA, net of income taxes paid:
| Year Ended | ||||||||
| (In millions) | December 31, 2023 | |||||||
Adjusted EBITA(1) | $ | 451 | ||||||
Less: Cash paid for income taxes | (84) | |||||||
Adjusted EBITA(1), net of income taxes paid | $ | 367 | ||||||
(1) See the “Non-GAAP Financial Measures” section of this press release.
Return on Invested Capital:
| Year Ended December 31, | ||||||||||||||||||||
| (In millions) | 2023 | 2022 | Average | |||||||||||||||||
Selected Assets: | ||||||||||||||||||||
Accounts receivable, net | $ | 1,753 | $ | 1,647 | $ | 1,700 | ||||||||||||||
| Other current assets | 347 | 286 | 317 | |||||||||||||||||
Property and equipment, net | 953 | 960 | 957 | |||||||||||||||||
Selected Liabilities: | ||||||||||||||||||||
Accounts payable | $ | (709) | $ | (717) | $ | (713) | ||||||||||||||
Accrued expenses | (966) | (995) | (981) | |||||||||||||||||
Other current liabilities | (327) | (193) | (260) | |||||||||||||||||
Invested capital | $ | 1,051 | $ | 988 | $ | 1,020 | ||||||||||||||
| Net income attributable to GXO to average invested capital | 22.5% | |||||||||||||||||||
Operating return on invested capital(1)(2) | 36.0% | |||||||||||||||||||
(1) The ratio of operating return on invested capital is calculated as adjusted EBITA, net of income taxes paid, divided by the average invested capital.
(2) See the “Non-GAAP Financial Measures” section of this press release.
17