GREENWICH, Conn., April 24, 2024 (GLOBE NEWSWIRE) -- GXO Logistics, Inc.
(https://gxo.com/) (NYSE: GXO), the world's largest pure-play contract logistics
provider, today announced selected preliminary financial results for the quarter
ended March 31, 2024. The company also reiterated its outlook for the full year
2024 on a standalone basis, updated the full-year 2024 guidance to include the
expected impact of the Wincanton acquisition and revised its 2027 financial
targets in advance of its first quarter 2024 earnings announcement and
conference call.
Malcolm Wilson, Chief Executive Officer of GXO, said, "Our solid preliminary
first quarter results reflect the improving trend we noted earlier this year,
and we anticipate continued sequential organic growth throughout 2024. As a
result, we are reiterating our full-year 2024 guidance.
"Our pace of new business wins is accelerating, with a 55% increase year over
year in first quarter wins. We continue to see a strong outsourcing trend, with
more than half of our wins in the quarter coming from customers outsourcing to
GXO or partnering with GXO for the first time, and our pipeline has increased to
$2.2 billion as of the end of the quarter. Customers are continuing to turn to
GXO to improve service, drive efficiencies, and lower costs throughout their
supply chains.
"We're also taking this opportunity to update the long-term guidance provided at
our Investor Day in January 2023. Our revised targets reflect our performance in
2023 and guidance for 2024, which assumes the gradual recovery of consumer
demand for physical goods. Additionally, following the recent approval by
Wincanton shareholders of our planned acquisition, the expected impact of this
transaction is also embedded in our new 2027 plan.
"Looking ahead, we're enhancing our position to capture more of the growing
outsourcing opportunity. We are investing in our sales organization and
strategically increasing the number of higher-margin, longer-duration automation
contracts across our global footprint. We are also diversifying our business
across geographies, including Germany, and verticals, particularly in beauty and
luxury markets worldwide, as well as industrials and aerospace in Europe. These
actions, coupled with the normalizing of consumer goods spending, underpin our
confidence in our long-term growth framework to drive significant shareholder
value over the long term."
Preliminary First Quarter 2024 Results
Based on information available as of April 24, 2024, the company currently
expects to report for the first quarter ended March 31, 2024(1):

  * Revenue of approximately $2.5 billion;
  * Net loss of approximately $36 million, primarily driven by a $63 million
    expense associated with legacy litigation;
  * Adjusted earnings before interest, taxes, depreciation and amortization
    ("adjusted EBITDA(2)") of approximately $154 million;
  * Cash and cash equivalents of approximately $423 million;
  * Long-term debt, including current debt of $26 million, of approximately
    $1,637 million; and
  * New business wins in the quarter of approximately $250 million, including
    new business with Boeing, Guess, Michelin and WH Smith.

Full-Year 2024 Guidance
The company reiterated its outlook for the full year 2024 on a standalone basis
and updated its guidance to include the expected impact of the Wincanton
acquisition, which remains subject to the satisfaction of customary conditions.
Standalone basis (unchanged):

  * Organic revenue growth(2) of 2% to 5%;
  * Adjusted EBITDA(2 )of $760 million to $790 million;
  * Adjusted diluted EPS(2 )of $2.70 to $2.90; and
  * Free cash flow conversion(2) of 30% to 40% of adjusted EBITDA(2).

Including expected impact of Wincanton acquisition, subject to the satisfaction
of customary conditions:

  * Organic revenue growth(2) of 2% to 5%;
  * Adjusted EBITDA(2 )of $805 million to $835 million;
  * Adjusted diluted EPS(2 )of $2.73 to $2.93; and
  * Free cash flow conversion(2) of 30% to 40% of adjusted EBITDA(2).

Updated 2027 Financial Targets
The Company updated its 2027 financial targets, first outlined as part of its
January 2023 Investor Day presentation, including expected impact of Wincanton
acquisition, as follows:
* Organic revenue CAGR (2024-2027)(2,3) of approximately 10%, to approximately

    $15.5 billion to $16.0 billion of revenue;
  * Approximately 15% adjusted EBITDA CAGR (2024-2027)(2,3), to approximately
    $1.25 billion to $1.30 billion of adjusted EBITDA(2);
  * Adjusted diluted EPS CAGR (2024-2027)(2,3) of more than 15%;
  * Free cash flow conversion of greater than 30% of adjusted EBITDA (2024-
    2027)(2); and
  * Operating return on invested capital(2 )of more than 30%.

The company posted a supplementary presentation today on GXO's Investor
Relations website at investors.gxo.com.
First Quarter 2024 Conference Call
GXO will hold its first quarter 2024 conference call and webcast on Wednesday,
May 8, 2024 at 8:30 a.m. Eastern Time. The company's results will be released
after market close on Tuesday, May 7, 2024, and made available at that time on
investors.gxo.com.
(1 )See the "Preliminary Financial Information" section in this press release.
(2 )For definitions of non-GAAP measures see the "Non-GAAP Financial Measures"
section in this press release.
(3 )Compound Annual Growth Rate (CAGR).
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.
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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 table below.
GXO's non-GAAP financial measures in this press release include: adjusted
earnings before interest, taxes, depreciation and amortization ("adjusted
EBITDA"), adjusted EBITDA CAGR, organic revenue, organic revenue growth, organic
revenue CAGR, adjusted diluted earnings per share ("adjusted diluted EPS"),
adjusted diluted EPS CAGR, free cash flow, free cash flow conversion, 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 and adjusted diluted EPS includes adjustments for transaction
and integration costs, litigation expenses as well as restructuring costs and
other adjustments as set forth in the financial table 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 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. Litigation expenses primarily relate to the settlement of
ongoing legal matters. Restructuring costs primarily relate to severance costs
associated with business optimization initiatives.
We believe that adjusted EBITDA improves 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 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 adjusted diluted 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 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 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 updated full-year 2024 guidance and our updated 2027
financial targets, 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.
Preliminary Financial Information
The preliminary financial results for the quarter ended March 31, 2024 included
in this press release are preliminary and unaudited and reflect our estimated
financial results as of and for the three months ended March 31, 2024. In
preparing this information, management made a number of complex and subjective
judgments and estimates about the appropriateness of certain reported amounts
and disclosures. The preliminary financial results included in this press
release have been prepared by, and are the responsibility of, our management.
Our actual financial results for the first quarter of 2024 have not yet been
finalized by management. In addition, the preliminary financial results
presented above have not been audited, reviewed, or compiled by our independent
registered public accounting firm, KPMG LLP. Accordingly, KPMG LLP does not
express an opinion or any other form of assurance with respect thereto and
assumes no responsibility for, and disclaims any association with, this
information. These results are not a comprehensive statement of all financial
results as of and for the three months ended March 31, 2024. We are required to
consider all available information through the finalization of our financial
statements and their possible impact on our financial conditions and results of
operations for the period, including the impact of such information on the
complex judgments and estimates referred to above. As a result, subsequent
information or events may lead to material differences between the information
about the results of operations described herein and the results of operations
described in our subsequent quarterly report. Accordingly, you should not place
undue reliance on these preliminary financial results.
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 continued sequential organic growth throughout 2024,
the gradual recovery of consumer demand for physical goods, our preliminary
expected results for the quarter ended March 31, 2024, our updated fiscal year
2024 guidance, our fiscal year 2027 financial targets and the expected closing
of the Wincanton acquisition. 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; competition and pricing pressures; GXO
and/or Wincanton's ability to align GXO and/or Wincanton's investments in
capital assets, including equipment, service centers and warehouses, to their
respective customers' demands; GXO and/or Wincanton's ability to successfully
integrate and realize anticipated benefits, synergies, cost savings and profit
improvement opportunities with respect to acquired companies, including the
acquisition of Wincanton; acquisitions may be unsuccessful or result in other
risks or developments that adversely affect GXO and/or Wincanton's financial
condition and results; GXO and/or Wincanton's ability to develop and implement
suitable information technology systems and prevent failures in or breaches of
such systems; GXO and/or Wincanton's indebtedness; GXO and/or Wincanton's
ability to raise debt and equity capital; litigation; labor matters, including
GXO and/or Wincanton's ability to manage its subcontractors, and risks
associated with labor disputes at GXO and/or Wincanton's customers' facilities
and efforts by labor organizations to organize its employees; risks associated
with defined benefit plans for GXO and/or Wincanton's current and former
employees; GXO and/or Wincanton's ability to attract or retain necessary talent;
the increased costs associated with labor; fluctuations in currency exchange
rates; fluctuations in fixed and floating interest rates; fluctuations in
customer confidence and spending; issues related to GXO and/or Wincanton's
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 GXO and/or Wincanton's reputation; a material
disruption of GXO and/or Wincanton'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 GXO and/or Wincanton's customers; the impact of
potential cyber-attacks and information technology or data security breaches;
and the inability to implement technology initiatives or business systems
successfully; GXO and/or Wincanton's ability to achieve 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.
Other unknown or unpredictable factors could cause actual results to differ
materially from those in the forward-looking statements. Such forward-looking
statements should therefore be construed in the light of such factors.
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.

  Investor Contact
  Chris Jordan
   +1 (203) 769-7228
  chris.jordan@gxo.com
  Media Contact
  Matthew Schmidt
   +1 (203) 307-2809
  matt.schmidt@gxo.com
                                GXO Logistics, Inc.
               Reconciliation of Net Income (Loss) to Adjusted EBITDA
                                    (Unaudited)
                 ------------------------------------------------------------------
                                    Three Months Ended March 31,
                 ------------------------------------------------------------------
 (In millions)               2024((1))                           2023

---------------- --------------------------------- --------------------------------
Net income
(loss)
attributable
to GXO $ (37 ) $ 25 Net income
attributable
to
noncontrolling
interest 1 1 --------------------------------- --------------------------------
Net income
(loss) $ (36 ) $ 26 --------------------------------- --------------------------------
Interest
expense, net 13 13 Income tax
expense
(benefit) (10 ) 3 Depreciation
and
amortization
expense((2)) 92 83 Transaction
and
integration
costs 19 13 Restructuring
costs and
other 16 21 Litigation
expense((3)) 63 - Unrealized
gain on
foreign
currency

 options                                     (3 )                              (1 )
                 --------------------------------- --------------------------------

Adjusted
EBITDA((4)) $ 154 $ 158

                 --------------------------------- --------------------------------
 ((1))      (Reflects preliminary estimates for the three months ended March
            31, 2024, derived from our internal records, and based on the most
            current information available to management. Preliminary results
            may differ from actual results.)
 ((2) )     (Includes $19 million and $17 million of intangible assets
            amortization for the three months ended March 31, 2024, and 2023,
            respectively.)
 ((3))      (During the first quarter of 2024, a trial was held in the United
            States District Court for the Western District of Missouri in
            connection with a dispute between the Company and one of its
            customers related to the start-up of the customer's warehouse that
            occurred in 2018 (Lindt et al. v. GXO Warehouse Company, Inc.,
            docket no. 4:22-cv-00384-BP). In March 2024, the jury returned
            verdicts in favor of the customer. The Company recognized an
            approximately $63 million expense in the three months ended March
            31, 2024, for associated legal fees, the jury verdicts, potential
            post-trial awards of interest, costs and other related expenses.
            The Company believes that this case was incorrectly decided and
            intends to pursue post-verdict remedies as necessary, including an
            appeal, and will pursue reimbursement under its existing insurance
            policies.)
 ((4) )     (See the "Non-GAAP Financial Measures" section above. )

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