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): November 2, 2022
RXO, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-41514 | 88-2183384 |
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
|
11215 North Community House Road Charlotte, NC 28277 |
| (Address of principal executive offices) (Zip Code) |
(980) 308-6058
(Registrant’s telephone number, including area code)
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 |
Name of each exchange on which registered | ||
| Common stock, par value $0.01 per share | RXO | New York Stock Exchange |
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 7.01. | Regulation FD Disclosure. |
In connection with meetings with institutional investors, RXO, Inc. (the “company”) is furnishing hereto as Exhibit 99.1 supplemental financial information relating to the company.
The information furnished pursuant to this Item 7.01, 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 (the “Securities Act”) 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) Exhibits.
| Exhibit No. | Description | |
| 99.1 | Supplemental Financial Information |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 2, 2022 |
RXO, INC. | ||
| By: | /s/ Jeff Firestone | ||
| Jeff Firestone | |||
| Chief Legal Officer | |||
EXHIBIT 99.1
RXO
Reconciliation of Net Income to Adjusted EBITDA and Public Company Pro Forma Adjusted EBITDA
(Unaudited)
(In millions)
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||
| March 31, 2020 | June 30, 2020 | September 30, 2020 | December 31, 2020 | March 31, 2021 | June 30, 2021 | September 30, 2021 | December 31, 2021 | March 31, 2022 | June 30, 2022 | |||||||||||||||||||||||||||||||
| Net income (loss) | $ | (2 | ) | $ | (16 | ) | $ | 23 | $ | 38 | $ | 40 | $ | 35 | $ | 33 | $ | 42 | $ | 39 | $ | 44 | ||||||||||||||||||
| Interest expense | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
| Income tax provision (benefit) | – | (5 | ) | 8 | 11 | 10 | 13 | 5 | 13 | 12 | 15 | |||||||||||||||||||||||||||||
| Depreciation and amortization expense | 17 | 18 | 20 | 21 | 20 | 20 | 22 | 19 | 21 | 21 | ||||||||||||||||||||||||||||||
| Transaction and integration costs | 5 | 7 | – | 2 | 1 | – | 1 | – | 3 | 18 | ||||||||||||||||||||||||||||||
| Restructuring costs | 2 | 7 | – | 1 | – | – | 1 | 1 | – | 3 | ||||||||||||||||||||||||||||||
| Other | – | – | – | – | – | (1 | ) | – | 2 | – | – | |||||||||||||||||||||||||||||
| Adjusted EBITDA (1) | $ | 22 | $ | 11 | $ | 51 | $ | 73 | $ | 71 | $ | 67 | $ | 62 | $ | 77 | $ | 75 | $ | 101 | ||||||||||||||||||||
| Reversal of allocated corporate expense (2) and other | 2 | 9 | 2 | 3 | 8 | 4 | 5 | 12 | 9 | 6 | ||||||||||||||||||||||||||||||
| Public company standalone cost (3) | (11 | ) | (12 | ) | (11 | ) | (11 | ) | (11 | ) | (12 | ) | (11 | ) | (11 | ) | (11 | ) | (12 | ) | ||||||||||||||||||||
| Public company pro forma adjusted EBITDA (1) | $ | 13 | $ | 8 | $ | 42 | $ | 65 | $ | 68 | $ | 59 | $ | 56 | $ | 78 | $ | 73 | $ | 95 | ||||||||||||||||||||
| (1) | See the "Non-GAAP Financial Measures" section for additional information. | |
| (2) | Allocated corporate expense per RXO Form 10 combined financial statements; excludes the impact of adjusted items and allocated income tax, depreciation and amortization from XPO Corporate. | |
| (3) | Estimated incremental costs of operating RXO as a standalone public company. |
RXO
Revenue Disaggregated by Service Offering
(Unaudited)
(In millions)
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||
| March 31, 2020 | June 30, 2020 | September 30, 2020 | December 31, 2020 | March 31, 2021 | June 30, 2021 | September 30, 2021 | December 31, 2021 | March 31, 2022 | June 30, 2022 | |||||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||||||||||
| Truck brokerage | $ | 328 | $ | 302 | $ | 432 | $ | 622 | $ | 596 | $ | 607 | $ | 700 | $ | 846 | $ | 824 | $ | 755 | ||||||||||||||||||||
| Last mile | 200 | 219 | 243 | 246 | 246 | 269 | 250 | 251 | 246 | 274 | ||||||||||||||||||||||||||||||
| Managed transportation | 142 | 119 | 153 | 168 | 167 | 167 | 151 | 118 | 139 | 133 | ||||||||||||||||||||||||||||||
| Freight forwarding | 43 | 60 | 57 | 65 | 75 | 89 | 125 | 145 | 139 | 100 | ||||||||||||||||||||||||||||||
| Eliminations | (11 | ) | (16 | ) | (8 | ) | (7 | ) | (19 | ) | (33 | ) | (28 | ) | (33 | ) | (36 | ) | (36 | ) | ||||||||||||||||||||
| Total | $ | 702 | $ | 684 | $ | 877 | $ | 1,094 | $ | 1,065 | $ | 1,099 | $ | 1,198 | $ | 1,327 | $ | 1,312 | $ | 1,226 | ||||||||||||||||||||
Non-GAAP Financial Measures
This document contains the following non-GAAP financial measures for RXO: adjusted earnings before interest, taxes, depreciation and amortization, as further adjusted in connection with the contemplated spin-off transaction (“adjusted EBITDA”); and public company pro forma adjusted EBITDA.
We believe that the above adjusted financial measures facilitate analysis of the ongoing business operations of RXO because they exclude items that may not be reflective of, or are unrelated to, RXO’s business’ 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 includes adjustments for transaction and integration costs as well as restructuring costs. 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, and 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 converging IT systems. Restructuring costs primarily relate to severance costs associated with business optimization initiatives. Management uses this non-GAAP financial measure in making financial, operating and planning decisions and evaluating RXO’s ongoing performance. Public company pro forma adjusted EBITDA includes adjustments for the reversal of allocated corporate expenses, public company operating expense and expense of being a public company.
We believe that adjusted EBITDA and public company pro forma adjusted EBITDA improve comparability from period to period by removing the impact of RXO’s capital structure (interest and financing expenses), asset base (depreciation and amortization), tax impacts and other adjustments as set out in the attached tables that management has determined are not reflective of core operating activities and thereby assist investors with assessing trends in RXO’s underlying businesses.