EXPD Expeditors International of Washington Inc

Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced net earnings of $59,288,000 for the first quarter of 2007, compared with $52,352,000 for the same quarter of 2006, an increase of 13%. Net revenues for the first quarter increased 12% to $334,136,000 as compared with $298,142,000 reported for the first quarter of 2006. Total revenues and operating income were $1,118,946,000 and $94,525,000 in 2007, compared with $1,026,537,000 and $85,401,000 for the same quarter of 2006, increases of 9% and 11%, respectively. Diluted net earnings per share for the first quarter were $.27 as compared with $.24 for the same quarter in 2006, an increase of 13%. The company also reported that same store net revenues and operating income increased 12% and 11% respectively, during the first quarter of 2007 as compared with the same period in 2006. �We were quite gratified to report double-digit growth in the first quarter of 2007,� said Peter J. Rose, Chairman and Chief Executive Officer. �We�ve known this was going to be a difficult quarter since we reported last year�s first quarter results � we were up 70% over 2005. For us, that old adage about last year�s victory being this year�s hurdle has never been more true. These were the toughest year-over-year comps that we�ve ever faced, and thanks to the consistent efforts of our employees, we think we�ve come through just fine,� Rose continued. �This first quarter of 2007 was actually quite challenging, aggressive comparables aside. As expected, March was the strongest month of the quarter � and was a record March. Ocean volumes were good, despite a softer pricing environment as compared with the first quarter of 2006. Our air product did just fine, from both an increased tonnage and yield management perspective and the brokerage group, as they typically do, made steady progress. All this in what could have been regarded as a somewhat tougher general environment than we saw during last year�s first quarter,� Rose explained. �However, we do measure our internal progress by how well we do at achieving our own expectations. Regardless of what might, or might not, be going on in the global economy, we always expect to do a little better this year than we did last year. Our first quarter results, on a net earnings basis, were very close to what was reflected in our 2007 budget. Taken in a net earnings context, we�ve nearly doubled our first quarter profitability since 2005 and we think that we�ve managed that growth pretty well. Finally, we�d be remiss in closing without publicly thanking our employees for their outstanding efforts and our customers, our vendor/partners, and our shareholders for their support. Thank you one and all!� Rose concluded. Expeditors is a global logistics company headquartered in Seattle, Washington. The company employs trained professionals in 172 full-service offices, 60 satellite locations and 5 international service centers located on six continents linked into a seamless worldwide network through an integrated information management system. Services include air and ocean freight forwarding, vendor consolidation, customs clearance, marine insurance, distribution and other value added international logistics services. Expeditors International of Washington, Inc. Financial Highlights Three months ended March 31, 2007 Unaudited (in 000's of US dollars except share data) � Three Months Ended 2007� 2006� % Increase Revenues $ 1,118,946� $ 1,026,537� 9� % Net revenues $ 334,136� $ 298,142� 12� % Operating income $ 94,525� $ 85,401� 11� % Net earnings $ 59,288� $ 52,352� 13� % Diluted earnings per share $ .27� $ .24� 13� % Basic earnings per share $ .28� $ .25� 12� % Diluted weighted average shares outstanding 222,842,546� 222,560,098� Basic weighted average shares outstanding 213,428,221� 213,422,478� � All share and per share amounts have been adjusted for the 2-for-1 stock split effective June 2006. Certain 2006 amounts have been reclassified to conform to the 2007 presentation. Offices opened during the First Quarter of 2007 ASIA LATIN AMERICA MIDDLE EAST Hangzhou, China (a) Guatemala City, Guatemala (a) Doha, Qatar (a) Chongqing, China (a)(b) Batam, Indonesia (c) � (a) Full-service office (a) Full-service office (a) Full-service office � (b) Chongqing was previously a satellite office of Shanghai. � (c) Satellite office of Singapore Investors may submit written questions via e-mail to: investor@expeditors.com or by fax to: (206) 674-3459 Questions received by the end of business on May 4, 2007 will be considered in management�s 8-K �Responses to Selected Questions� expected to be filed on or about May 14, 2007. EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except share data) (Unaudited) � March 31, December 31, Assets 2007� 2006� � Current assets: Cash and cash equivalents $ 576,816� $ 511,358� Short-term investments 530� 578� Accounts receivable, net 750,938� 811,486� Deferred Federal and state income taxes 7,386� 7,490� Other current assets 15,723� 10,925� Total current assets 1,351,393� 1,341,837� � Property and equipment, net 455,835� 450,856� Goodwill, net 7,927� 7,927� Other intangibles, net 7,254� 7,584� Other assets 14,390� 14,134� � � $ 1,836,799� $ 1,822,338� Liabilities and Shareholders' Equity � Current liabilities: Short term borrowings 224� -� Accounts payable 513,598� 544,028� Accrued expenses, primarily salaries and related costs 138,454� 122,081� Federal, state and foreign income taxes 33,406� 43,036� Total current liabilities $ 685,682� $ 709,145� � Deferred Federal and state income taxes $ 32,996� $ 26,743� � Minority interest $ 16,594� $ 16,515� � Shareholders' equity: Preferred stock, par value $.01 per share. Authorized 2,000,000 shares; none issued --� --� Common stock, par value $.01 per share. Authorized 320,000,000 shares; issued and outstanding 213,351,763 shares at March 31, 2007 and 213,080,466 shares at December 31, 2006 2,134� 2,131� Additional paid-in capital 90,238� 119,582� Retained earnings 993,346� 934,058� Accumulated other comprehensive income 15,809� 14,164� Total shareholders' equity 1,101,527� 1,069,935� $ 1,836,799� $ 1,822,338� EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except share data) (Unaudited) � Three months ended March 31, � 2007� � 2006� Revenues: Airfreight $ 517,205� $ 490,998� Ocean freight and ocean services 375,202� 344,659� Customs brokerage and other services � 226,539� � 190,880� Total revenues � 1,118,946� � 1,026,537� � Operating expenses: Airfreight consolidation 389,644� 380,581� Ocean freight consolidation 298,891� 270,879� Customs brokerage and other services 96,275� 76,935� Salaries and related costs 182,761� 160,974� Rent and occupancy costs 16,667� 15,668� Depreciation and amortization 9,575� 8,053� Selling and promotion 9,096� 7,957� Other � 21,512� � 20,089� Total operating expenses � 1,024,421� � 941,136� � Operating income � 94,525� � 85,401� � Interest expense (14) (27) Interest income 5,219� 4,274� Other, net � 755� � 1,667� Other income, net � 5,960� � 5,914� � Earnings before income taxes and minority interest 100,485� 91,315� � Income tax expense � 41,160� � 37,052� Net earnings before minority interest � 59,325� � 54,263� � Minority interest � (37) � (1,911) Net earnings $ 59,288� $ 52,352� � Diluted earnings per share $ 0.27� $ 0.24� � Basic earnings per share $ 0.28� $ 0.25� � Weighted average diluted shares outstanding � 222,842,546� � 222,560,098� � Weighted average basic shares outstanding � 213,428,221� � 213,422,478� � All share and per share amounts have been adjusted for the 2-for-1 stock split effective June 2006. � Certain 2006 amounts have been reclassified to conform to the 2007 presentation. EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) � Three months ended March 31, 2007� 2006� Operating Activities: Net earnings $59,288� $52,352� Adjustments to reconcile net earnings to net cash provided by operating activities: Provision for losses on accounts receivable 514� (154) Deferred income tax expense 5,468� 6,280� Excess tax benefits from employee stock plans (16,332) (6,035) Stock compensation expense 11,460� 8,398� Depreciation and amortization 9,575� 8,053� Gain on sale of property and equipment (123) (147) Minority interest in earnings of consolidated entities 37� 1,911� Other 334� 1,074� Changes in operating assets and liabilities: Decrease in accounts receivable 57,701� 20,839� Increase in other current assets (677) (473) Increase (decrease) in accounts payable and other current liabilities (13,635) 28,852� Increase in taxes payable, net 2,469� 17,183� � Net cash provided by operating activities 116,079� 138,133� � Investing Activities: Decrease (increase) in short-term investments 86� (8) Purchase of property and equipment (13,438) (21,499) Proceeds from sale of property and equipment 379� 178� Other (340) (206) � Net cash used in investing activities (13,313) (21,535) � Financing Activities: Borrowings of short-term debt, net 220� -� Proceeds from issuance of common stock 15,266� 5,507� Repurchases of common stock (72,398) (26,960) Excess tax benefits from employee stock plans 16,332� 6,035� � Net cash used in financing activities (40,580) (15,418) � Effect of exchange rate changes on cash 3,272� 2,614� � Increase in cash and cash equivalents 65,458� 103,794� � Cash and cash equivalents at beginning of period 511,358� 463,894� � Cash and cash equivalents at end of period 576,816� 567,688� � Interest and taxes paid: Interest 11� 24� Income taxes 33,033� 12,675� � Certain 2006 amounts have been reclassified to conform to the 2007 presentation. EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Business Segment Information (In thousands) (Unaudited) United States OtherN. America Far East Europe Australia/ New Zealand Latin America Middle East Eliminations Consolidated Three months ended March 31, 2007 � Revenues from unaffiliated customers $ 245,725� 28,086� 602,031� 156,379� 14,783� 19,371� 52,571� 1,118,946� Transfers between geographic areas $ 22,498� 1,978� 3,980� 7,761� 1,697� 2,506� 3,423� (43,843) -� Total revenues $ 268,223� 30,064� 606,011� 164,140� 16,480� 21,877� 55,994� (43,843) 1,118,946� � Net revenues $ 135,467� 14,700� 93,153� 56,027� 8,927� 9,795� 16,067� 334,136� Operating income $ 28,063� 2,729� 44,884� 10,151� 2,404� 2,052� 4,242� 94,525� Identifiable assets at quarter end $ 878,559� 62,270� 395,634� 361,557� 27,678� 38,209� 75,262� (2,370) 1,836,799� Capital expenditures $ 8,705� 324� 1,333� 1,385� 694� 495� 502� 13,438� Depreciation and amortization $ 5,169� 331� 1,375� 1,737� 200� 400� 363� 9,575� Equity $ 1,239,866� 29,120� 285,593� 126,658� 17,169� 17,481� 36,299� (650,659) 1,101,527� � Three months ended March 31, 2006 � Revenues from unaffiliated customers $ 217,757� 28,404� 558,759� 141,099� 12,354� 16,153� 52,011� 1,026,537� Transfers between geographic areas $ 25,442� 1,730� 3,683� 7,325� 1,409� 1,893� 2,382� (43,864) -� Total revenues $ 243,199� 30,134� 562,442� 148,424� 13,763� 18,046� 54,393� (43,864) 1,026,537� � Net revenues $ 124,233� 14,705� 82,813� 49,337� 7,401� 7,231� 12,422� 298,142� Operating income $ 24,572� 3,339� 41,283� 10,570� 1,981� 1,274� 2,382� 85,401� Identifiable assets at quarter end $ 858,480� 53,528� 334,631� 301,741� 22,222� 28,199� 55,011� 2,398� 1,656,210� Capital expenditures $ 17,186� 97� 2,754� 714� 237� 323� 188� 21,499� Depreciation and amortization $ 4,068� 351� 1,190� 1,536� 198� 365� 345� 8,053� Equity $ 1,070,416� 20,233� 245,513� 85,066� 12,283� 12,305� 24,269� (495,771) 974,314� Certain 2006 amounts have been reclassified to conform to the 2007 presentation.