EXPD Expeditors International of Washington Inc

Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced net earnings attributable to shareholders of $80,315,000 for the first quarter of 2013, as compared with $76,707,000 for the same quarter of 2012, an increase of 5%. Net revenues and total revenues for the first quarter of 2013 decreased marginally to $445,284,000 and $1,410,485,000 as compared with $446,571,000 and $1,411,370,000, respectively, for the same quarter in 2012. Operating income was $128,518,000 in the first quarter of 2013, as compared with $125,271,0002 for the same quarter of 2012, an increase of 3%. Diluted net earnings attributable to shareholders per share for the first quarter were $.39, as compared with $.36 for the same quarter in 2012, an increase of 8%.

"There is a certain stability in these quarterly results that may not be as apparent on the surface as they were re-assuring to us here,” said Peter J. Rose, Chairman and Chief Executive Officer. “We had a strong finish in March and after having swum in deep waters for so long, it's somewhat invigorating to feel that your feet might actually be touching ground. We still have a ways to go, but despite the continued and well-publicized slide in global PC shipments, historically a large part of our tech business, our 2013 first quarter year-over-year airfreight tonnages were actually up, albeit marginally. This was the second consecutive quarter we've had year-over-year airfreight tonnage increases. While pricing was still somewhat volatile, it was great to see some sustained traction in year-over-year airfreight tonnage growth,” Rose went on to say.

“As we look forward to the remainder of 2013, amid the obvious challenges, we do see cause for optimism. The same uncertainty that haunted the global economy in 2012 hasn't entirely gone away. That said, we feel increasingly confident about our ability to address these challenges,” Rose continued. “We try to be very realistic here and not allow our perspectives to be overly swayed, either positively or negatively, by conventional financial media wisdom du jour. As we assess our current state, we feel much better about 2013 at the end of the first quarter of 2013 than we did about 2012 at the end of the first quarter of 2012. We have control over our expenses, we're 3% more profitable in our branch operations, and the investments we've made in our people and in our systems continue to build and strengthen the cultural foundation we rely on to create long-term stability. As always, we're grateful to our people for their steadfastness and their commitment to our customers and to each other. That's the kind of commitment our culture fosters and predictably, that's what gets us through tough times,” 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 Includes a European Commission fine of $5.5 million.

NOTE: See Disclaimer on Forward-Looking Statements on the following page of this release.

Expeditors International of Washington, Inc.

First Quarter 2013 Earnings Release, May 1, 2013

Financial Highlights for the Three months ended March 31, 2013 and 2012 (Unaudited)

(in 000's of US dollars except share data)   Three months ended March 31,   2013   2012 % Change   Revenues $ 1,410,485 $ 1,411,370 — % Net revenues1 $ 445,284 $ 446,571 — % Operating income $ 128,518 $ 125,271 3 % Net earnings attributable to shareholders $ 80,315 $ 76,707 5 % Diluted earnings attributable to shareholders $ .39 $ .36 8 % Basic earnings attributable to shareholders $ .39 $ .36 8 % Diluted weighted average shares outstanding 207,613,863 214,199,510 Basic weighted average shares outstanding 206,475,095 212,097,662  

1Revenues less directly related operating expenses.

    Employee headcount as of March 31, 2013   2012 North America 4,705 4,702 Asia Pacific 3,867 4,006 Europe and Africa 2,340 2,292 Middle East and India 1,216 1,229 Latin America 665 644 Information Systems 628 578 Corporate 273   234 Total 13,694 13,685     Year-over-year percentage increase (decrease) in:   Airfreight kilos     Ocean freight FEU 2013 January 16 % (3 )% February (11 )% (5 )% March (1 )% (4 )% Quarter .4 % (4 )%

Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on May 3, 2013 will be considered in management's 8-K “Responses to Selected Questions” expected to be filed on or about May 10, 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 stability of future quarter results; ability to increase airfreight tonnage and maintain pricing levels; ability to control expenses; ability to improve branch profitability; and ability to make strategic investments in people and systems to create long-term 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, 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)

       

March 31,2013

December 31,2012

Assets

Current Assets: Cash and cash equivalents $ 1,394,687 $ 1,260,842 Accounts receivable, net 982,119 1,031,376 Deferred Federal and state income taxes 11,867 12,102 Other current assets 42,153   53,279 Total current assets 2,430,826   2,357,599 Property and equipment, net 546,698 556,204 Goodwill 7,927 7,927 Other assets, net 32,348   32,395 $ 3,017,799   $ 2,954,125

Liabilities and Equity

Current Liabilities: Accounts payable 629,190 641,593 Accrued expenses, primarily salaries and related costs 175,212 178,995 Federal, state and foreign income taxes 27,278   21,970 Total current liabilities 831,680   842,558 Deferred Federal and state income taxes 81,498 78,997   Commitments and contingencies   Shareholders’ Equity: Preferred stock; none issued — — Common stock, par value $.01 per share; issued and outstanding 206,475,743 shares at March 31, 2013 and 206,392,013 shares at December 31, 2012 2,065 2,064 Additional paid-in capital 5,962 1,283 Retained earnings 2,098,933 2,018,618 Accumulated other comprehensive (loss) income (4,265 ) 5,734 Total shareholders’ equity 2,102,695   2,027,699 Noncontrolling interest 1,926   4,871 Total equity 2,104,621   2,032,570 $ 3,017,799   $ 2,954,125    

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

 

Condensed Consolidated Statements of Earnings

(In thousands, except share data)

 

(Unaudited)

  Three months ended March 31, 2013       2012 Revenues: Airfreight services $ 620,374 $ 638,912 Ocean freight and ocean services 445,479 434,336 Customs brokerage and other services 344,632   338,122 Total revenues 1,410,485   1,411,370 Operating Expenses: Airfreight consolidation 464,919 481,043 Ocean freight consolidation 344,923 331,954 Customs brokerage and other services 155,359 151,802 Salaries and related costs 248,417 246,132 Rent and occupancy costs 21,657 21,176 Depreciation and amortization 11,278 9,545 Selling and promotion 7,257 8,663 Other 28,157   35,784 Total operating expenses 1,281,967   1,286,099 Operating income 128,518   125,271   Interest income 3,243 3,360 Other, net 1,531   477 Other income, net 4,774   3,837 Earnings before income taxes 133,292 129,108 Income tax expense 52,682   52,386 Net earnings 80,610   76,722 Less net earnings attributable to the noncontrolling interest 295   15 Net earnings attributable to shareholders $ 80,315   $ 76,707 Diluted earnings attributable to shareholders per share $ .39   $ .36 Basic earnings attributable to shareholders per share $ .39   $ .36 Weighted average diluted shares outstanding 207,613,863   214,199,510 Weighted average basic shares outstanding 206,475,095   212,097,662    

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

 

Condensed Consolidated Statements of Cash Flows

(In thousands) (Unaudited)

  Three months ended March 31, 2013       2012 Operating Activities: Net earnings $ 80,610 $ 76,722 Adjustments to reconcile net earnings to net cash from operating activities: Provision for losses (recoveries) on accounts receivable 941 (467 ) Deferred income tax expense 7,122 5,481 Excess tax benefits from stock plans (1,099 ) (3,426 ) Stock compensation expense 11,005 10,600 Depreciation and amortization 11,278 9,545 Other 208 217 Changes in operating assets and liabilities: Decrease in accounts receivable 38,856 12,968 (Increase) decrease in other current assets (485 ) 1,924 (Decrease) increase in accounts payable and accrued expenses (1,390 ) 13,559 Increase in income taxes payable, net 18,218   20,274   Net cash from operating activities 165,264   147,397   Investing Activities: Decrease (increase) in short-term investments, net 38 (15,780 ) Purchase of property and equipment (10,068 ) (17,088 ) Other, net (444 ) 470   Net cash from investing activities (10,474 ) (32,398 ) Financing Activities: Proceeds from issuance of common stock 10,929 12,920 Repurchases of common stock (17,681 ) (21,865 ) Excess tax benefits from stock plans 1,099 3,426 Purchase of noncontrolling interest (7,730 ) —   Net cash from financing activities (13,383 ) (5,519 ) Effect of exchange rate changes on cash and cash equivalents (7,562 ) 9,079   Increase in cash and cash equivalents 133,845 118,559 Cash and cash equivalents at beginning of period 1,260,842   1,294,356   Cash and cash equivalents at end of period $ 1,394,687   $ 1,412,915   Taxes paid: Income taxes $ 26,951 $26,512    

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Business Segment Information

(In thousands) (Unaudited)

                               

UNITEDSTATES

OTHERNORTHAMERICA

LATINAMERICA

ASIAPACIFIC

EUROPE andAFRICA

MIDDLEEAST andINDIA

ELIMI-NATIONS

CONSOLI-DATED

Three months ended March 31, 2013: Revenues from unaffiliated customers $ 371,719 51,729 19,864 694,095 202,487 70,591 — 1,410,485 Transfers between geographic areas 20,026   2,544   4,876   10,630   8,880   4,327   (51,283 ) — Total revenues $ 391,745   54,273   24,740   704,725   211,367   74,918   (51,283 ) 1,410,485 Net revenues $ 177,688 23,781 14,411 135,507 70,589 23,308 — 445,284 Operating income $ 47,353 6,612 4,089 52,884 11,926 5,654 — 128,518 Identifiable assets $ 1,502,795 96,555 53,935 795,946 406,801 158,569 3,198 3,017,799 Capital expenditures $ 5,379 187 259 2,552 1,198 493 — 10,068 Depreciation and amortization $ 6,757 207 241 1,988 1,629 456 — 11,278 Equity $ 1,231,424 62,267 32,638 568,609 165,014 79,434 (34,765 ) 2,104,621 Three months ended March 31, 2012: Revenues from unaffiliated customers $ 377,302 49,954 19,269 688,070 206,271 70,504 — 1,411,370 Transfers between geographic areas 22,208     2,465   5,079   10,972   9,467   4,651   (54,842 ) — Total revenues $ 399,510   52,419   24,348   699,042   215,738   75,155   (54,842 ) 1,411,370 Net revenues $ 181,475 22,242 14,835 131,814 71,533 24,672 — 446,571 Operating income $ 45,525 6,369 4,762 47,238 14,247 7,130 — 125,271 Identifiable assets $ 1,590,900 96,312 52,214 708,528 404,839 149,416 (986 ) 3,001,223 Capital expenditures $ 9,759 176 255 5,287 942 669 — 17,088 Depreciation and amortization $ 5,622 187 217 1,624 1,404 491 — 9,545 Equity $ 1,315,321 56,341 31,060 471,498 164,165 93,282 (29,633 ) 2,102,034