XPO Logistics Announces Second Quarter 2013 Results

Reports 65% Organic Growth and Significant Margin Expansion in Freight Brokerage

Reaffirms Full Year Financial Outlook

GREENWICH, Conn. - July 30, 2013 - XPO Logistics, Inc. (NYSE: XPO) today announced financial results for the second quarter of 2013.

Total revenue was $137.1 million for the second quarter, a 151.4% increase from the same period in 2012. Gross margin dollars increased 128.4% year-over-year to $19.3 million, and gross margin percentage was 14.1%.

For the second quarter of 2013, the company reported a net loss of $17.4 million, compared with a net loss of $5.2 million for the same period in 2012. The net loss available to common shareholders was $18.1 million, or a loss of $1.00 per diluted share, compared with a net loss of $5.9 million, or a loss of $0.34 per diluted share, for the same period in 2012. The company's second quarter results reflect the positive impact of acquisitions from prior periods and significant organic growth, offset by planned strategic investments in long-term value creation, transaction-related costs and litigation costs.

Earnings (loss) before interest, taxes, depreciation and amortization ("EBITDA"), a non-GAAP financial measure, was a loss of $12.4 million for the second quarter of 2013, compared with a loss of $3.0 million for the same period in 2012. EBITDA includes $1.1 million and $1.2 million of non-cash share-based compensation for the second quarters of 2013 and 2012, respectively. A reconciliation of EBITDA to net income is provided in the attached financial tables.

The company had $178.2 million of cash as of June 30, 2013.

Reaffirms Full Year 2013 Financial Outlook

The company has reaffirmed its full year outlook for an annual revenue run rate of more than $1 billion as of December 31, and positive EBITDA for the fourth quarter of 2013.

3PD Acquisition to Close in Third Quarter

On July 15, 2013, the company announced that it had entered into a definitive agreement to acquire all of the common stock of 3PD, Inc. (3PD) in a transaction valued at approximately $365 million. 3PD is the largest non-asset, third party provider of heavy goods, last-mile logistics in North America. The acquisition is expected to close in the third quarter of 2013, subject to customary conditions.

3PD, based in Atlanta, was founded in 2001 to capitalize on the rapid growth in last-mile logistics. 3PD provides blue chip retail shippers with customized solutions tailored to their supply chain needs, and serves small and mid-sized shippers by matching them to carriers on a transactional basis. The business has differentiated itself through its ability to assure a superb customer experience using proprietary technology and industry-leading process management.

CEO Comments

Bradley Jacobs, chairman and chief executive officer, said, "In the second quarter, we delivered a 151% increase in revenue year-over-year, and 128% more gross margin dollars. Our freight brokerage business achieved robust organic growth of 65%, driven in large part by the traction of our eight brokerage cold-starts. These locations are barely a year old on average, but they're already generating a combined revenue run rate of over $90 million and sequential improvements in gross margin percentage. We're in the process of opening a new mega-branch in Cincinnati with a highly experienced leader to scale it up. And our acquisition pipeline remains very active, with a current list of about 100 targets.

"Our expedited business saw pressure on margin throughout the quarter, as demand for expedited services remained soft. Capacity tightened somewhat in early July, however, and margins have expanded in recent weeks. Our freight forwarding business is outpacing industry growth by capturing more international business. Freight forwarding revenue increased 17% in the second quarter, gross margin was up 230 basis points, and EBITDA increased significantly by 157%."

Jacobs continued, "We've entered the back half of the year with a lot of momentum. Our productivity per brokerage employee improved quarter-to-quarter, despite the addition of almost 100 net new hires. Our strategic and national account teams recently had major wins in truckload brokerage, as well as cross-border, less-than-truckload and expedite. And soon we'll complete the XPO supply chain with the acquisition of 3PD's heavy goods, last-mile capabilities. 3PD is the clear market leader in this space, with an impressive growth trajectory. We intend to scale up the business and capitalize on the rapidly growing demand for last-mile logistics. I'm pleased that we're on track to meet our revenue outlook for a billion dollar run rate by year-end - that's an exciting milestone in our plan to build XPO into a world-class company."

Second Quarter 2013 Results by Business Unit

Freight brokerage: The company's freight brokerage business generated total revenue of $95.4 million for the quarter, a 587.2% increase from the same period in 2012. Gross margin percentage was 13.2% for the quarter, compared with 11.0% for the same period in 2012, an improvement of 220 basis points. The year-over-year increases in revenue and gross margin were primarily driven by acquisitions and the expansion of the company's brokerage cold-start locations. The operating loss was $5.0 million, compared with a loss of $825,000 a year ago, primarily reflecting an increase in SG&A costs for sales force expansion, technology and training.
Expedited transportation: The company's expedited transportation business generated total revenue of $26.4 million for the quarter, a 2.8% increase from the same period in 2012. Gross margin percentage was 15.9% for the quarter, compared with 20.0% for the same period in 2012. The decrease in gross margin percentage primarily reflects a soft expedite environment, as well as the addition of revenue from air charter, which generates lower margins than the company's over-the-road expedited business. Second quarter operating income was $1.2 million, compared with $2.6 million a year ago, primarily reflecting the impact of a lower gross margin percentage.
Freight forwarding: The company's freight forwarding business generated total revenue of $19.3 million for the quarter, a 17.4% increase from the same period in 2012. The increase in revenue was primarily driven by the growth of company-owned locations and a higher volume of international shipments. Gross margin percentage was 13.3% for the quarter, an improvement of 230 basis points, compared with 11.0% for the same period in 2012. The increase in gross margin percentage was primarily driven by investments in company-owned locations. Second quarter operating income was $478,000, a 119.3% increase year-over-year. The increase in operating income reflected a higher gross margin partially offset by SG&A expenses related to cold-starts opened in prior periods.
Corporate: Corporate SG&A expense for the second quarter of 2013 was $10.7 million, compared with $5.4 million for the second quarter of 2012. The increase in SG&A expense was primarily driven by a larger headcount in corporate shared services and an increase in purchased services, including $1.8 million, or $0.10 per diluted share, of transaction-related costs; and $1.5 million, or $0.08 per diluted share, of litigation costs.

Six Months 2013 Financial Results

For the six months ended June 30, 2013, the company reported total revenue of $251.1 million, a 153.4% increase from the first six months of 2012.

Net loss was $31.9 million for the first six months of 2013, compared with net loss of $7.9 million for the same period last year. The company reported a six-month net loss available to common shareholders of $33.4 million, or a loss of $1.84 per diluted share, compared with a net loss of $9.4 million, or a loss of $0.56 per diluted share, for the same period in 2012.

EBITDA, a non-GAAP financial measure, was a loss of $22.1 million for the first six months of 2013, compared with a loss of $6.9 million for the same period in 2012, primarily reflecting planned investments in future value creation, including a significant increase in sales headcount year-over-year. EBITDA for the first six months of 2013 included $2.6 million, or $0.14 per diluted share, of litigation costs; $2.1 million, or $0.12 per diluted share, of transaction-related costs; and $2.1 million, or $0.12 per diluted share, in non-cash share-based compensation.

Conference Call

The company will hold a conference call on Wednesday, July 31, 2013, at 8:30 a.m. Eastern Time. Participants can call toll-free (from U.S./Canada) 1-888-895-5271; international callers dial +1-847-619-6547. A live webcast of the conference will be available on the investor relations area of the company's website, www.xpologistics.com/investors. The conference call will be archived until August 31, 2013. To access the replay by phone, call toll-free (from U.S./Canada) 1-888-843-7419; international callers dial +1-630-652-3042. Use participant passcode 35253664.

About XPO Logistics, Inc.

XPO Logistics, Inc. (NYSE: XPO) is one of the fastest growing providers of transportation logistics services in North America. The company's three business units - freight brokerage, expedited transportation and freight forwarding - use relationships with more than 22,000 ground, sea and air carriers to serve over 8,500 customers in the manufacturing, industrial, retail, commercial, life sciences and government sectors. XPO is built to deliver constant growth in truck capacity, passionate service and technological innovation through 62 locations in the United States and Canada. www.xpologistics.com

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures as defined under Securities and Exchange Commission ("SEC") rules, such as earnings (loss) before interest, taxes, depreciation and amortization ("EBITDA") for the quarters ended June 30, 2013, and June 30, 2012. As required by SEC rules, we provide reconciliations of these measures to the most directly comparable measure under United States generally accepted accounting principles ("GAAP"), which are set forth in the attachments to this release. We believe that EBITDA improves comparability from period to period by removing the impact of our capital structure (interest expense from our outstanding debt), asset base (depreciation and amortization) and tax consequences. In addition to its use by management, we believe that EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of companies in our industry. Other companies may calculate EBITDA differently, and therefore our EBITDA may not be comparable to similarly titled measures of other companies. EBITDA is not a measure of financial performance or liquidity under GAAP and should not be considered in isolation or as an alternative to net income, cash flows from operating activities and other measures determined in accordance with GAAP. Items excluded from EBITDA are significant and necessary components of the operations of our business, and, therefore, EBITDA should only be used as a supplemental measure of our operating performance.

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, including, without limitation, our 2013 outlook with respect to annual revenue and fourth quarter 2013 EBITDA, the anticipated closing date of the acquisition of 3PD and the related financing (the "3PD Transaction"), the expected impact of the 3PD Transaction and 3PD's anticipated growth. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. 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" 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 us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe 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, those discussed in our filings with the SEC and the following: economic conditions generally; competition; our ability to find suitable acquisition candidates and execute our acquisition strategy; the projected satisfaction of closing conditions for the 3PD Transaction; the expected closing date for the 3PD Transaction; the expected impact of the 3PD Transaction, including the expected impact on the Company's results of operations and EBITDA; our ability to raise debt and equity capital; our ability to attract and retain key employees to execute our growth strategy, including retention of 3PD's management team; litigation, including litigation related to misclassification of independent contractors; our ability to develop and implement a suitable information technology system; our ability to maintain positive relationships with our network of third-party transportation providers; our ability to retain our and 3PD's largest customers; our ability to successfully integrate 3PD and other acquired businesses; and governmental regulation. All forward-looking statements set forth in this press 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 press 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, including our 2013 outlook, except to the extent required by law.

Investor Contact:
XPO Logistics, Inc.
Dana Gibson, +1-203-930-1470
dana.gibson@xpologistics.com

Media Contact:
Brunswick Group
Steve Lipin / Gemma Hart, +1-212-333-3810

XPO Logistics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
		2013		2012		2013		2012

Revenues	$	137,091	$	54,540	$	251,090	$	99,100
Expenses
Direct expense		117,751		46,074		215,490		83,861
Gross margin		19,340		8,466		35,600		15,239
Sales general and administrative expense		33,355		11,834		60,982		22,831
Operating loss		(14,015)		(3,368)		(25,382)		(7,592)
Other expense		167		26		58		5
Interest expense		3,106		3		6,170		15
Loss before income tax provision		(17,288)		(3,397)		(31,610)		(7,612)
Income tax benefit		74		1,780		296		259
Net loss		(17,362)		(5,177)		(31,906)		(7,871)
Cumulative preferred dividends		(743)		(750)		(1,486)		(1,500)
Net loss available to common shareholders	$	(18,105)	$	(5,927)	$	(33,392)	$	(9,371)

Basic loss per share
Net loss	$	(1.00)	$	(0.34)	$	(1.84)	$	(0.56)
Diluted loss per share
Net loss	$	(1.00)	$	(0.34)	$	(1.84)	$	(0.56)
Weighted average common shares outstanding
Basic weighted average common shares outstanding		18,180		17,637		18,107		16,629
Diluted weighted average common shares outstanding		18,180		17,637		18,107		16,629

XPO Logistics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)

	June 30,		December 31,
	2013		2012
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	178,155	$	252,293

Accounts receivable, net of allowances of $1,318 and $603, respectively		89,740		61,245
Prepaid expenses		2,095		1,555
Deferred tax asset, current		938		1,406
Income tax receivable		2,840		2,569
Other current assets		4,203		1,866
Total current assets		277,971		320,934

Property and equipment, net of $6,954 and $5,323
in accumulated depreciation, respectively		15,554		13,090
Goodwill		69,927		55,947
Identifiable intangible assets, net of $6,295 and $4,592
in accumulated amortization, respectively		30,121		22,473
Deferred tax asset, long-term		72		0
Other long-term assets		834		764
Total long-term assets		116,508		92,274
Total assets	$	394,479	$	413,208


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	23,591	$	22,108
Accrued salaries and wages		5,570		3,516
Accrued expenses, other		23,733		21,123
Current maturities of notes payable and capital leases		850		491
Other current liabilities		1,548		1,789
Total current liabilities		55,292		49,027

Convertible senior notes		111,197		108,280
Notes payable and capital leases, net of current maturities		767		676
Deferred tax liability, long term		6,553		6,781
Other long-term liabilities		3,838		3,385
Total long-term liabilities		122,355		119,122

Stockholders' equity:
Preferred stock, $.001 par value; 10,000,000 shares;
74,275 shares issued and outstanding		42,794		42,794
Common stock, $.001 par value; 150,000,000 shares authorized;
18,241,217 and 18,002,985 shares issued, respectively;
and 18,196,217 and 17,957,985 shares outstanding, respectively		18		18
Additional paid-in capital		267,806		262,641
Treasury stock, at cost, 45,000 shares held		(107)		(107)
Accumulated deficit		(93,679)		(60,287)
Total stockholders' equity		216,832		245,059
Total liabilities and stockholders' equity	$	394,479	$	413,208

XPO Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)

		Six Months Ended
		June 30,
			2013		2012
Operating activities
Net loss		$	(31,906)	$	(7,871)
Adjustments to reconcile net loss to net cash from operating activities
	Provisions for allowance for doubtful accounts		627		84
	Depreciation & amortization expense		3,349		741
	Stock compensation expense		2,147		2,266
	Gain on sale of affiliate		(176)		-
	Accretion of debt		2,916		-
	Exchange loss		46		-
Changes in assets and liabilities, net of effects of acquisitions:
	Accounts receivable		(24,134)		(5,496)
	Deferred tax expense		167		1,537
	Income tax receivable		(732)		(1,388)
	Prepaid expenses and other current assets		(275)		(495)
	Other long-term assets		(28)		(18)
	Accounts payable		(5,973)		(1,313)
	Accrued expenses and other liabilities		4,899		1,816
Cash provided used by operating activities			(49,073)		(10,137)
Investing activities
	Acquisition of businesses, net of cash acquired		(19,660)		(3,713)
	Proceeds from sale of business interests		125		-
	Payment of acquisition earn-out		-		(450)
	Payment for purchases of property and equipment		(3,864)		(2,569)
Cash Flows used by investing activities			(23,399)		(6,732)
Financing Activities
	Credit line, net activity		(150)		-
	Payments of notes payable and capital leases		16		(2,018)
	Proceeds from stock offering, net		-		136,961
	Proceeds from exercise of options, net		(56)		131
	Proceeds from exercise of warrants		10		-
	Dividends paid to preferred stockholders		(1,486)		(1,500)
Cash flows (used) provided by financing activities			(1,666)		133,574
Effect of exchange rate changes on cash			-		-
Net (decrease) increase in cash			(74,138)		116,705
Cash and cash equivalents, beginning of period			252,293		74,007
Cash and cash equivalents, end of period		$	178,155	$	190,712

Supplemental disclosure of noncash activities:

Cash paid during the period for interest			3,337		15
Cash paid during the period for income taxes			906		159

Freight Brokerage
Summary Financial Table
(Unaudited)
(In thousands)

	Three Months Ended June 30,							Six Months Ended June 30,
	2013		2012		$ Variance		Change %	2013		2012		$ Variance		Change %

Revenue	$	95,360	$	13,877	$	81,483	587.2%	$	173,590	$	21,805	$	151,785	696.1%
Direct expense
Transportation services		82,705		12,255		70,450	574.9%		150,662		19,160		131,502	686.3%
Other direct expense		88		101		(13)	-12.9%		295		95		200	210.5%
Total direct expense		82,793		12,356		70,437	570.1%		150,957		19,255		131,702	684.0%
Gross margin		12,567		1,521		11,046	726.2%		22,633		2,550		20,083	787.6%
SG&A expense
Salaries & benefits		12,367		1,572		10,795	686.7%		22,530		2,431		20,099	826.8%
Purchased services		979		266		713	268.0%		1,793		328		1,465	446.6%
Other SG&A expense		3,031		432		2,599	601.6%		4,926		606		4,320	712.9%
Depreciation & amortization		1,180		76		1,104	1452.6%		2,194		96		2,098	2185.4%
Total SG&A expense		17,557		2,346		15,211	648.4%		31,443		3,461		27,982	808.5%
Operating loss	$	(4,990)	$	(825)	$	(4,165)	504.8%	$	(8,810)	$	(911)	$	(7,899)	867.1%

Freight Brokerage
Key Employee Data

	June 30,	June 30,
	2013	2012
Freight Brokerage personnel	788	92

Note: Totals are as of period end, and primarily include the positions of shipper sales, carrier procurement and brokerage operations, and reflect the impact of recruitment and acquisitions.

Expedited Transportation
Summary Financial Table
(Unaudited)
(In thousands)

	Three Months Ended June 30,							Six Months Ended June 30,
	2013		2012		$ Variance		Change %	2013		2012		$ Variance		Change %

Revenue	$	26,445	$	25,731	$	714	2.8%	$	50,320	$	48,151	$	2,169	4.5%
Direct expense
Transportation services		21,528		19,830		1,698	8.6%		40,680		37,192		3,488	9.4%
Other direct expense		707		766		(59)	-7.7%		1,622		1,665		(43)	-2.6%
Total direct expense		22,235		20,596		1,639	8.0%		42,302		38,857		3,445	8.9%
Gross margin		4,210		5,135		(925)	-18.0%		8,018		9,294		(1,276)	-13.7%
SG&A expense
Salaries & benefits		2,016		1,665		351	21.1%		3,961		3,325		636	19.1%
Purchased services		246		251		(5)	-2.0%		535		448		87	19.4%
Other SG&A expense		513		506		7	1.4%		1,117		935		182	19.5%
Depreciation & amortization		248		79		169	213.9%		465		164		301	183.5%
Total SG&A expense		3,023		2,501		522	20.9%		6,078		4,872		1,206	24.8%
Operating income	$	1,187	$	2,634	$	(1,447)	-54.9%	$	1,940	$	4,422	$	(2,482)	-56.1%

Note: Total depreciation and amortization for the Expedited Transportation operating segment included in both direct expense and SG&A, was $291 and $129 for the three-months ended June 30, 2013 and 2012, respectively, and $559 and $266 for the six-month periods ended June 30, 2013 and 2012, respectively.

Freight Forwarding
Summary Financial Table
(Unaudited)
(In thousands)

	Three Months Ended June 30,							Six Months Ended June 30,
	2013		2012		$ Variance		Change %	2013		2012		$ Variance		Change %

Revenue	$	19,338	$	16,468	$	2,870	17.4%	$	35,571	$	31,925	$	3,646	11.4%
Direct expense
Transportation services		14,743		12,150		2,593	21.3%		26,853		23,663		3,190	13.5%
Station commissions		1,992		2,457		(465)	-18.9%		3,700		4,773		(1,073)	-22.5%
Other direct expense		40		52		(12)	-23.1%		69		95		(26)	-27.4%
Total direct expense		16,775		14,659		2,116	14.4%		30,622		28,531		2,091	7.3%
Gross margin		2,563		1,809		754	41.7%		4,949		3,394		1,555	45.8%
SG&A expense
Salaries & benefits		1,518		924		594	64.3%		2,951		1,711		1,240	72.5%
Purchased services		157		146		11	7.5%		247		187		60	32.1%
Other SG&A expense		317		376		(59)	-15.7%		720		748		(28)	-3.7%
Depreciation & amortization		93		145		(52)	-35.9%		181		289		(108)	-37.4%
Total SG&A expense		2,085		1,591		494	31.0%		4,099		2,935		1,164	39.7%
Operating income	$	478	$	218	$	260	119.3%	$	850	$	459	$	391	85.2%

XPO Corporate
Summary of Selling, General & Administrative Expense
(Unaudited)
(In thousands)

	Three Months Ended June 30,							Six Months Ended June 30,
	2013		2012		$ Variance		Change %	2013		2012		$ Variance		Change %
SG&A expense
Salaries & benefits	$	4,590	$	3,101	$	1,489	48.0%	$	9,097	$	6,144	$	2,953	48.1%
Purchased services		4,532		1,207		3,325	275.5%		7,154		3,643		3,511	96.4%
Other SG&A expense		1,337		1,014		323	31.9%		2,696		1,685		1,011	60.0%
Depreciation & amortization		231		73		158	216.4%		415		90		325	361.1%
Total SG&A expense	$	10,690	$	5,395	$	5,295	98.1%	$	19,362	$	11,562	$	7,800	67.5%


Note: Intercompany eliminations included revenue of $4.1 million and $1.5 million for the three-months ended June 30, 2013 and 2012, respectively, as well as revenues of $8.4 million and $2.8 million for the year to date periods ended June 30, 2013 and 2012, respectively, that eliminate upon consolidation.

XPO Logistics, Inc.
Consolidated Reconciliation of EBITDA to Net Loss
(In thousands)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013		2012		Change %	2013		2012		Change %

Net loss available to common shareholders	$	(18,105)	$	(5,927)	205.5%	$	(33,392)	$	(9,371)	256.3%
Preferred dividends		(743)		(750)	-0.9%		(1,486)		(1,500)	-0.9%
Net loss		(17,362)		(5,177)	235.4%		(31,906)		(7,871)	305.4%
Interest expense		3,106		3	103433.3%		6,170		15	41033.3%
Income tax provision		74		1,780	-95.8%		296		259	14.3%
Depreciation and amortization		1,795		423	324.3%		3,349		741	352.0%
EBITDA	$	(12,387)	$	(2,971)	316.9%	$	(22,091)	$	(6,856)	222.2%

Note: Please refer to the "Non-GAAP Financial Measures" section of the press release.

XPO Logistics, Inc.
Consolidated Calculation of Diluted Weighted Shares Outstanding

	Three Months Ended		Six Months Ended
	June 30, 2013	June 30, 2012	June 30, 2013	June 30, 2012
Basic common stock outstanding	18,179,570	17,636,834	18,106,564	16,629,420

Potentially Dilutive Securities:
Shares underlying the conversion
of preferred stock to common stock	10,610,714	10,714,286	10,610,714	10,714,286
Shares underlying the conversion
of the convertible senior notes	8,749,239	-	8,749,239	-
Shares underlying warrants to
purchase common stock	6,262,380	6,282,659	6,302,668	6,282,659
Shares underlying stock options
to purchase common stock	526,813	401,793	533,977	348,682
Shares underlying restricted stock units	436,275	559,381	418,898	613,139
	26,585,421	17,958,119	26,615,496	17,958,766

Diluted weighted shares outstanding	44,764,991	35,594,953	44,722,060	34,588,186

Note: For dilution purposes, GAAP requires diluted shares to be reflected on a weighted average basis, which takes into account the portion of the period in which the diluted shares were outstanding. The table above reflects the weighted average diluted shares for the periods presented. The impact of this dilution was not reflected in the earnings per share calculations on the Condensed Consolidated Statements of Operations because the impact was anti-dilutive. The treasury method was used to determine the shares underlying the warrants to purchase common stock with an average closing market price of $16.85 per share and $16.92 per share for the three-month periods ended June 30, 2013 and 2012, respectively, and $17.00 per share and $15.44 per share for the six-month periods ended June 30, 2013 and 2012, respectively.