XPO Logistics, Inc. (NYSE:XPO) Q1 2017 Earnings Conference Call - Final Transcript
May 04, 2017 • 08:30 am ET
Welcome to the XPO Logistics Q1 2017 Earnings Conference Call and Webcast. My name is Michelle, and I'll be your operator for today's call. [Operator Instructions]
Before the call begins, let me read a brief statement on behalf of the company regarding forward-looking statements and the use of non-GAAP financial measures. During this call, the company will be making certain forward-looking statements within the meaning of applicable securities laws, which, by their nature, involve a number of risks, and uncertainties and other factors that could cause actual results to differ materially from those projected in the forward-looking statements. A discussion of factors that could cause actual results to differ materially is contained in the company's SEC filings.
These forward-looking statements in the company's earnings release or made on this call are made only as of today, and the company has no obligation to update any of these forward-looking statements, except to the extent required by the law. During this call, the company also may refer to certain non-GAAP financial measures as defined under applicable SEC rules. Reconciliations of such non-GAAP financial measures to the most comparable GAAP measures are contained in the company's earnings release and related financial tables or in the Investors section on the company's website at www.xpo.com.
You can find a copy of the company's earnings release, which contains additional important information regarding forward-looking statements and non-GAAP financial measures in the Investors section on the company's website.
I will now turn the call over to Brad Jacobs. Mr. Jacobs, you may begin.
Thank you, operator. Good morning, everybody. Thanks for joining our earnings call. With me in Greenwich this morning are John Hardig, our CFO, Scott Malat, our Chief Strategy Officer, and Tavio Headley, our Head of IR.
I'm happy to report that we're off to a strong start to 2017. We had solid beats across the board on net income, operating income and adjusted EBITDA. We swung from a net loss last year to net income of $19.5 million this year. Our adjusted EBITDA was up 16% from a year ago, going from $249 million to $290 million. Even more impressively last year's numbers included truckload and this year's didn't. We improved our adjusted EBITDA margin by 120 basis points to 8.2% from 7% a year ago. This was a result of organic growth and reducing costs.
We're very much on track with our plan to continue to increase our EBITDA margin to 10% in 2018. Once again, North American LTL was a standout. On a year-over-year basis, we grew LTL operating income by a noteworthy 49%. We improved our adjusted operating ratio in LTL by 390 basis points. Adjusted OR was 89% compared to 92.9% a year ago. We're very proud of the disciplined execution of our LTL strategy. We signed up $716 million of new business in the first quarter. This is up 67% from the $429 million we signed up in Q1 2016, we're on a roll. In addition, we signed a record intermodal