XPO Logistics, Inc. (NYSE:XPO) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 08:30 am ET

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XPO Logistics, Inc. (NYSE:XPO) Q2 2020 Earnings Conference Call - Final Transcript

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Operator
Operator

Welcome to the XPO Logistics Second Quarter 2020 Earnings Conference Call and Webcast. My name is Rob, 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, 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. The 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 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 the related financial tables. 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.

Executive
Bradley Jacobs

Thank you, operator. Good morning, everybody. In addition to my remarks today, you'll hear from David Wyshner, our Chief Financial Officer; Matt Fassler, our Chief Strategy Officer. And also, for the Q&A portion of the call, we have Tavio Headley, our Senior Director of Investor Relations; Meghan Henson, our Chief Human Resources Officer; Ravi Tulsyan, our Treasurer; and Kyle Wismans, Senior Vice President of FP&A. The second quarter was dominated by the severe challenges of COVID-19. Nevertheless, we did deliver better-than-expected revenue, adjusted EPS, adjusted EBITDA and, notably, free cash flow. For us, the trough was in April in both North America and Europe. Since then, we've seen a recovery in Europe with a more recent rebound in North America, and all of our sites are open. Each month in the quarter showed sequential improvement across our operating regions. Organic revenue for the company as a whole has gone from being down 21% in April year-over-year to down just 10% in June, and we've continued to gain ground in July. The improvement has been broad-based in both transportation and logistics.

In North American LTL, for example, our tonnage per day was down 24% in April year-over-year, but down only 13% in June. We continue to regain tonnage in July. In Europe, our LTL pallet count per day at the end of June was up from the trough in France by 49% and in Iberia by 44%. The U.K. was up 25% from the trough. And our European logistics business came back strong in the quarter with a