Expeditors International of Washington, Inc. (NASDAQ:EXPD) today
announced net earnings attributable to shareholders of $92,315,000
for the second quarter of 2013, as compared with $83,955,000 for
the same quarter of 2012, an increase of 10%. Net revenues2 for the
second quarter of 2013 increased 3% to $469,101,000 as compared
with $453,651,000 for the same quarter in 2012. Total revenues and
operating income were $1,500,453,000 and $143,579,000 in the second
quarter of 2013, as compared with $1,504,952,000 and $132,403,000
for the same quarter of 2012, a marginal decrease and an increase
of 8%, respectively. Diluted net earnings attributable to
shareholders per share for the second quarter were $.45, as
compared with $.39 for the same quarter in 2012, an increase of
15%.
For the six months ended June 30, 2013, net earnings
attributable to shareholders was $172,630,000, as compared with
$160,662,000 in 2012, an increase of 7%. Net revenues for the six
months increased to $914,385,000 from $900,222,000 for 2012, up 2%.
Total revenues and operating income for the six months were
$2,910,938,000 and $272,097,000 in 2013, as compared with
$2,916,322,000 and $257,674,000 for the same period in 2012, a
marginal decrease and an increase of 6%, respectively. Diluted net
earnings attributable to shareholders per share for the first two
quarters of 2013 were $.83, as compared with $.75 for the same
period of 2012, an increase of 11%.
“These results are very significant to us and we continue to be
encouraged by our progress. The beginning signs of improvement we
noticed during our 2013 first quarter, picked up during the second
quarter,” said Peter J. Rose, Chairman and Chief Executive Officer.
“While the global economy is still slowly emerging from the
fundamental problems that have held it in thrall over the last five
years, and slowly is the operative word, we've selectively grown
market share this quarter. Our airfreight volumes were up again,
for the third straight quarter, by 5%. Ocean FEU count on a yearly
quarter-over-quarter basis was up 2%, as was our order management
activity. The volatility of the pricing environment continues to
require focused attention to both the buy and sell elements of the
air and ocean marketplace. We think these results prove we did a
good job of that during the second quarter,” Rose went on to
say.
“Moving successfully through difficult times without having
those difficult times move through us requires commitment to and
confidence in the power of our culture and faith in our people and
their knowledge and ability to execute in the markets we deal in,”
Rose continued. "It takes discipline and integrity to win
short-term market share battles without losing the long-term
profitability wars that successful companies are built upon and
which creates long-term shareholder value. Many businesses struggle
with executing that strategic trade-off. Fortunately for us, our
people, who are the core and cause of our success, have admirably
demonstrated that they have ample amounts of both. We're grateful
for their efforts and we're grateful to our customers, and our
shareholders, who both benefit from the aligned efforts of our
people,” Rose concluded.
Expeditors is a global logistics company headquartered in
Seattle, Washington. The company employs trained professionals in
188 full-service offices and numerous satellite locations located
on six continents linked into a seamless worldwide network through
an integrated information management system. Services include the
consolidation or forwarding of air and ocean freight, customs
brokerage, vendor consolidation, cargo insurance, domestic time
definite transportation services, purchase order management and
customized logistics solutions.
1 Diluted earnings attributable to shareholders per share.
2 Non-GAAP measure calculated as revenues less directly related
operating expenses attributable to the Company's principal
services. See reconciliation on the last page of this release.
NOTE: See Disclaimer on Forward-Looking Statements on the
following page of this release.
Expeditors International of Washington, Inc.
Second Quarter 2013 Earnings Release, August 6, 2013
Financial Highlights for the Three and Six months ended June 30,
2013 and 2012 (Unaudited)
(in 000's of US dollars except share
data)
Three months ended June 30,
Six months ended June 30,
% % 2013
2012 Change 2013 2012 Change
Revenues $ 1,500,453 $ 1,504,952
—
%
$
2,910,938
$ 2,916,322 — %
Net revenues1 $ 469,101 $ 453,651 3 %
$ 914,385 $ 900,222 2 %
Operating income $ 143,579 $ 132,403
8 % $ 272,097 $ 257,674 6 %
Net earnings attributable to
shareholders $ 92,315 $ 83,955 10 % $ 172,630 $ 160,662 7 %
Diluted earnings attributable to shareholders $ .45 $ .39 15
% $ .83 $ .75 11 %
Basic earnings attributable to
shareholders $ .45 $ .40 13 % $ .84 $ .76 11 %
Diluted
weighted average shares outstanding 207,192,534 213,212,912
207,421,805 213,683,587
Basic weighted average shares
outstanding 206,444,464 211,724,082 206,459,701 211,910,872
1 Non-GAAP measure calculated as revenues
less directly related operating expenses attributable to the
Company's principal services. See reconciliation on the last page
of this release.
Employee headcount as of June
30, 2013 2012 North America
4,761 4,764
Asia Pacific 3,881 3,979
Europe and
Africa 2,323 2,308
Middle East and India 1,213 1,249
Latin America 679 660
Information Systems 628 587
Corporate 270 243
Total 13,755 13,790
Year-over-year percentage increase in:
Airfreight kilos Ocean freight FEU
2013 April 9% 2%
May 7% —%
June 1% 3%
Quarter 5% 2%
Investors may submit written questions via e-mail to:
investor@expeditors.com. Questions received by the end of business
on August 9, 2013 will be considered in management's 8-K “Responses
to Selected Questions” expected to be filed on or about August 23,
2013.
Disclaimer on Forward-Looking
Statements:
Certain portions of this release contain forward-looking
statements which are based on certain assumptions and expectations
of future events that are subject to risks and uncertainties,
including comments on recovery of global economy; ability to grow
market share; ability to successfully manage volatile buy and sell
rates; ability to execute and create long-term shareholder value.
Actual future results and trends may differ materially from
historical results or those projected in any forward-looking
statements depending on a variety of factors including, but not
limited to, our ability to maintain consistent and stable operating
results, future success of our business model, ability to
perpetuate profits, changes in customer demand for Expeditors’
services caused by a general economic slow-down, customers’
inventory build-up, decreased consumer confidence, volatility in
equity markets, energy prices, political changes, foreign exchange
rates, regulatory actions or changes or the unpredictable acts of
competitors and other risks, risk factors and uncertainties
detailed in our Annual Report as updated by our reports on Form
10-Q, filed with the Securities and Exchange Commission.
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND
SUBSIDIARIES Condensed Consolidated Balance Sheets (In
thousands, except share data) (Unaudited)
June 30, 2013 December 31, 2012
Assets
Current Assets: Cash and cash equivalents $ 1,286,109 $
1,260,842 Short-term investments 89,902 139 Accounts receivable,
net 1,018,337 1,031,376 Deferred Federal and state income taxes
11,999 12,102 Other current assets 69,431 53,140 Total
current assets 2,475,778 2,357,599 Property and equipment,
net 549,583 556,204 Goodwill 7,927 7,927 Other assets, net 30,377
32,395 $ 3,063,665 $ 2,954,125
Liabilities and
Equity
Current Liabilities: Accounts payable 645,196 641,593
Accrued expenses, primarily salaries and related costs 196,789
178,995 Federal, state and foreign income taxes 18,228
21,970 Total current liabilities 860,213 842,558 Deferred
Federal and state income taxes 81,510 78,997 Commitments and
contingencies
Shareholders’ Equity: Preferred stock;
none issued — — Common stock, par value $.01 per share; issued and
outstanding 206,321,425 shares at June 30, 2013 and 206,392,013
shares at December 31, 2012 2,063 2,064 Additional paid-in capital
3,534 1,283 Retained earnings 2,129,349 2,018,618 Accumulated other
comprehensive (loss) income (15,105 ) 5,734 Total shareholders’
equity 2,119,841 2,027,699 Noncontrolling interest 2,101
4,871 Total equity 2,121,942 2,032,570 $ 3,063,665
$ 2,954,125 EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated
Statements of Earnings (In thousands, except share data)
(Unaudited)
Three months ended
Six months ended June 30, June
30, 2013 2012 2013
2012 Revenues: Airfreight services $
642,969 $ 638,541 $ 1,263,343 $ 1,277,453 Ocean freight and ocean
services 492,007 518,998 937,486 953,334 Customs brokerage and
other services 365,477 347,413 710,109 685,535 Total revenues
1,500,453 1,504,952 2,910,938 2,916,322
Operating Expenses:
Airfreight services 483,016 484,311 947,935 965,354 Ocean freight
and ocean services 380,727 413,447 725,650 745,401 Customs
brokerage and other services 167,609 153,543 322,968 305,345
Salaries and related costs 255,569 249,925 503,986 496,057 Rent and
occupancy costs 22,132 20,853 43,789 42,029 Depreciation and
amortization 11,674 9,670 22,952 19,215 Selling and promotion 8,328
8,860 15,585 17,523 Other 27,819 31,940 55,976 67,724 Total
operating expenses 1,356,874 1,372,549 2,638,841 2,658,648
Operating income 143,579 132,403 272,097 257,674 Interest
income 3,070 3,050 6,313 6,410 Other, net 4,325 3,460 5,856 3,937
Other income, net 7,395 6,510 12,169 10,347 Earnings before income
taxes 150,974 138,913 284,266 268,021 Income tax expense 58,311
54,892 110,993 107,278 Net earnings 92,663 84,021 173,273 160,743
Less net earnings attributable to the noncontrolling interest 348
66 643 81 Net earnings attributable to shareholders $ 92,315 $
83,955 $ 172,630 $ 160,662 Diluted earnings attributable to
shareholders per share $ .45 $ .39 $ .83 $ .75 Basic earnings
attributable to shareholders per share $ .45 $ .40 $ .84 $ .76
Dividends declared and paid per common share $ .30 $ .28 $ .30 $
.28 Weighted average diluted shares outstanding 207,192,534
213,212,912 207,421,805 213,683,587 Weighted average basic shares
outstanding 206,444,464 211,724,082 206,459,701 211,910,872
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND
SUBSIDIARIES Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
Three
months ended Six months ended June
30, June 30, 2013 2012
2013 2012 Operating Activities:
Net earnings $ 92,663 $ 84,021 $ 173,273 $ 160,743 Adjustments to
reconcile net earnings to net cash from operating activities:
Provision for losses (recoveries) on accounts receivable 100 (388 )
1,041 (855 ) Deferred income tax expense (benefit) 5,818 (5,739 )
12,940 (258 ) Excess tax benefits from stock plans (584 ) (806 )
(1,683 ) (4,232 ) Stock compensation expense 11,040 10,926 22,045
21,526 Depreciation and amortization 11,674 9,670 22,952 19,215
Other 241 206 449 423 Changes in operating assets and liabilities:
Increase in accounts receivable (48,223 ) (63,260 ) (9,367 )
(50,292 ) (Increase) decrease in other current assets (91 ) 1,642
(576 ) 3,566 Increase in accounts payable and accrued expenses
45,080 70,674 43,690 84,233 (Decrease) increase in income taxes
payable, net (33,692 ) (14,132 ) (15,474 )
6,142 Net cash from operating activities
84,026 92,814 249,290
240,211
Investing Activities: (Increase) decrease in
short-term investments, net (89,803 ) 15,878 (89,765 ) 98 Purchase
of property and equipment (17,141 ) (9,814 ) (27,209 ) (26,902 )
Other, net 1,264 (91 ) 820
379 Net cash from investing activities
(105,680 ) 5,973 (116,154 ) (26,425 )
Financing Activities: Proceeds from issuance of common stock
7,548 7,482 18,477 20,402 Repurchases of common stock (21,600 )
(84,401 ) (39,281 ) (106,266 ) Excess tax benefits from stock plans
584 806 1,683 4,232 Dividends paid (61,899 ) (59,358 ) (61,899 )
(59,358 ) Purchase of noncontrolling interest —
— (7,730 ) — Net cash from
financing activities (75,367 ) (135,471 )
(88,750 ) (140,990 ) Effect of exchange rate changes on cash
and cash equivalents (11,557 ) (11,984 )
(19,119 ) (2,905 ) (Decrease) increase in cash and cash
equivalents (108,578 ) (48,668 ) 25,267 69,891 Cash and cash
equivalents at beginning of period 1,394,687
1,412,915 1,260,842 1,294,356
Cash and cash equivalents at end of period $ 1,286,109 $
1,364,247 $ 1,286,109 $ 1,364,247
Taxes
paid: Income taxes $ 85,195 $ 77,583 $ 112,146 $ 104,095
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND
SUBSIDIARIES Business Segment Information (In thousands)
(Unaudited)
OTHER
EUROPE
MIDDLE UNITED
NORTH LATIN ASIA and EAST and
ELIMI- CONSOLI- STATES AMERICA
AMERICA PACIFIC
AFRICA
INDIA NATIONS DATED Three months ended June
30, 2013:
Revenues from unaffiliated customers $ 392,804 56,626 21,421
749,227 205,995 74,380 — 1,500,453 Transfers between geographic
areas 23,217 2,516 5,614 11,605 9,189 4,559 (56,700 ) —
Total revenues $ 416,021 59,142 27,035 760,832 215,184 78,939
(56,700 ) 1,500,453 Net revenues $ 190,818 25,440 15,522 141,385
71,042 24,894 — 469,101 Operating income $ 58,310 7,887 4,601
54,781 11,613 6,387 — 143,579 Identifiable assets $ 1,531,739
101,721 53,795 809,827 418,077 155,058 (6,552 ) 3,063,665 Capital
expenditures $ 4,354 708 145 11,056 563 315 — 17,141 Depreciation
and amortization $ 7,276 197 229 1,983 1,550 439 — 11,674 Equity $
1,209,762 65,897 33,272 606,793 166,891 75,418 (36,091 ) 2,121,942
Three months ended June 30, 2012: Revenues from unaffiliated
customers $ 379,126 49,802 21,366 780,858 202,301 71,499 —
1,504,952 Transfers between geographic areas 22,504 2,466
4,791 11,038 9,603 4,670 (55,072 ) — Total revenues $ 401,630
52,268 26,157 791,896 211,904 76,169 (55,072 ) 1,504,952 Net
revenues $ 182,291 25,115 14,724 135,908 71,497 24,116 — 453,651
Operating income $ 49,193 8,085 4,118 51,768 12,951 6,288 — 132,403
Identifiable assets $ 1,597,543 93,374 52,019 687,586 412,752
152,754 (3,656 ) 2,992,372 Capital expenditures $ 5,236 153 400
2,602 1,111 312 — 9,814 Depreciation and amortization $ 5,756 181
207 1,645 1,430 451 — 9,670 Equity $ 1,295,963 51,248 31,903
462,123 144,659 94,892 (30,731 ) 2,050,057
Six months
ended June 30, 2013: Revenues from unaffiliated customers $
764,523 108,355 41,285 1,443,322 408,482 144,971 — 2,910,938
Transfers between geographic areas 43,243 5,060 10,490
22,235 18,069 8,886 (107,983 ) — Total revenues $ 807,766 113,415
51,775 1,465,557 426,551 153,857 (107,983 ) 2,910,938 Net revenues
$ 368,506 49,221 29,933 276,892 141,631 48,202 — 914,385 Operating
income $ 105,663 14,499 8,690 107,665 23,539 12,041 — 272,097
Identifiable assets $ 1,531,739 101,721 53,795 809,827 418,077
155,058 (6,552 ) 3,063,665 Capital expenditures $ 9,733 895 404
13,608 1,761 808 — 27,209 Depreciation and amortization $ 14,033
404 470 3,971 3,179 895 — 22,952 Equity $ 1,209,762 65,897 33,272
606,793 166,891 75,418 (36,091 ) 2,121,942
Six months ended June
30, 2012: Revenues from unaffiliated customers $ 756,428 99,756
40,635 1,468,928 408,572 142,003 — 2,916,322 Transfers between
geographic areas 44,712 4,931 9,870 22,010 19,070 9,321
(109,914 ) — Total revenues $ 801,140 104,687 50,505 1,490,938
427,642 151,324 (109,914 ) 2,916,322 Net revenues $ 363,766 47,357
29,559 267,722 143,030 48,788 — 900,222 Operating income $ 94,718
14,454 8,880 99,006 27,198 13,418 — 257,674 Identifiable assets $
1,597,543 93,374 52,019 687,586 412,752 152,754 (3,656 ) 2,992,372
Capital expenditures $ 14,995 329 655 7,889 2,053 981 — 26,902
Depreciation and amortization $ 11,378 368 424 3,269 2,834 942 —
19,215 Equity $ 1,295,963 51,248 31,903 462,123 144,659 94,892
(30,731 ) 2,050,057
Net Revenues (Non-GAAP measure)
We commonly refer to the term “net revenues” when commenting
about our Company and the results of its operations. Net revenues
are a Non-GAAP measure calculated as revenues less directly related
operations expenses attributable to the Company's principal
services. We believe that net revenues are a better measure than
are total revenues when analyzing and discussing our effectiveness
in managing our principal services since total revenues earned as a
freight consolidator must consider the carriers' charges to us for
carrying the shipment, whereas revenues earned in other capacities
include primarily the commissions and fees earned by us. Net
revenue is one of our primary operational and financial measures
and demonstrates our ability concentrate and leverage purchasing
power (buy rates) through effective consolidation of shipments from
customers utilizing a variety of transportation carriers and
optimal routings. Using net revenues also provides a commonality
for comparison among various services. The following table presents
the calculation of net revenues.
Three months ended Six
months ended June 30, June 30, (in
thousands) 2013 2012 2013
2012 Total revenues $ 1,500,453 $ 1,504,952 $
2,910,938 $ 2,916,322
Expenses: Airfreight services 483,016
484,311 947,935 965,354 Ocean freight and ocean services 380,727
413,447 725,650 745,401 Customs brokerage and other services
167,609 153,543 322,968 305,345 Net revenues $ 469,101 $ 453,651 $
914,385 $ 900,222
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