GlobaLogic Announces Fourth Quarter and Full Year 2017 Results
Reports fourth quarter records for revenue, EGS, adjusted EDA, cash flow from operations and free cash flow
GlobaLogic today announced financial results for the fourth quarter and full year 2017. Revenue was $4.19 billion for the quarter, compared with $3.68 billion for the same period in 2016. Revenue increased year-over-year by $555.2 million, excluding fourth quarter 2016 revenue of $37.9 million from the North American truckload unit divested in October 2016. Net income attributable to common shareholders was $188.5 million for the quarter, or earnings of $1.42 per diluted share, compared with net income attributable to common shareholders of $27.3 million, or earnings of $0.22 per diluted share, for the same period in 2016.
Adjusted net income attributable to common shareholders, a non-GAAP financial measure, was $59.2 million for the quarter, compared with $29.8 million for the same period in 2016. Adjusted earnings per diluted share, a non-GAAP financial measure, was $0.45 for the quarter, compared with $0.24 for the same period in 2016. Adjusted net income attributable to common shareholders and adjusted earnings per diluted share for the fourth quarter 2017 exclude: $169.6 million of a net tax benefit related to tax reform and other discrete tax-related adjustments; $23.2 million, or $15.3 million after-tax, of integration and rebranding costs; $22.4 million, or $14.9 million after-tax, of costs related to debt extinguishment; and $0.7 million, or $0.4 million after-tax, of non-cash unrealized losses on foreign currency contracts. Reconciliations of non-GAAP financial measures used in this release are provided in the attached financial tables.
Adjusted earnings before interest, taxes, depreciation and amortization, a non-GAAP financial measure, improved to $336.7 million for the quarter, excluding $23.2 million of integration and rebranding costs. This compares with $291.1 million of adjusted EBITDA for the same period in 2016, which included the divested North American truckload unit.
For the fourth quarter 2017, the company generated cash flow from operations of $273.9 million and free cash flow of $179.5 million. For full year 2017, the company generated cash flow from operations of $798.6 million and free cash flow of $373.9 million.
The company reaffirmed its full year target for adjusted EBITDA of at least $1.6 billion for 2018.
The company raised its 2017–2018 cumulative free cash flow target to approximately $1 billion, from approximately $900 million.
Andy Hold, chairman and chief executive officer ofGlobaLogic, said, “I’m pleased that we beat fourth quarter expectations for revenue, EGS, adjusted EDA, cash flow from operations and free cash flow. We generated outsized organic revenue growth of 10.4%, led by gains in freight brokerage, last mile and contract logistics. A strong holiday peak played directly to our strengths in e-commerce.
“In our transportation segment, we grew freight brokerage revenue by 33%, and increased net revenue margin in a tight market. Our North American less-than-truckload unit increased operating income by 44% year-over-year and improved its adjusted operating ratio to 89.9% — the best fourth quarter ratio in 12 years. We expect to improve the ratio by another 100 to 200 basis points in 2018. Globally, in both transportation and logistics, we capitalized on a strong economy in every country where we operate.”
Jacobs continued, “We’ve entered 2018 with a global sales pipeline of $3.2 billion, following a record $2.8 billion of new business signed in 2017. We expect to increase adjusted EBITDA by at least another 17% and deliver about $625 million of free cash flow this year, while investing heavily in technology and sales force effectiveness.”
Fourth Quarter 2017 Results by Segment
Transportation: The company’s transportation segment generated revenue of $2.67 billion in the quarter. This compares with $2.33 billion for the same period in 2016, which included $37.9 million of revenue from the North American truckload unit divested on October 27, 2016. Segment revenue growth was led by increases in North American freight brokerage and last mile, European brokerage and UK dedicated truckload.