Expeditors International of Washington, Inc. (NYSE:EXPD) today
announced fourth quarter 2023 financial results including the
following highlights compared to the same quarter of 2022:
- Diluted Net Earnings Attributable to Shareholders per share
(EPS1) decreased 21% to $1.09
- Net Earnings Attributable to Shareholders decreased 28% to $159
million
- Operating Income decreased 40% to $199 million
- Revenues decreased 34% to $2.3 billion
- Airfreight tonnage volume decreased 3% and ocean container
volume decreased 10%
“While ocean and air markets have been recovering from the
massive disruptions brought on by the global Covid-19 pandemic, we
continue to face further market uncertainty due to the current
conflicts in the Middle East and on the Red Sea,” said Jeffrey S.
Musser, President and Chief Executive Officer. “Further, volumes
and capacity have remained uncertain due to additional capacity
recently brought into the marketplace, while shippers have
cautiously sought to avoid overextending their inventory levels.
These factors created an environment where rates, which had fallen
fairly significantly from the pandemic period, stabilized in ocean
and, in the case of air, increased in the fourth quarter of 2023.
If I had to use one key word to describe the fourth quarter and all
of 2023, it would be ‘uncertainty.’
“As a company we have continued to remain focused on bringing
expenses in line with revenue, as shown by headcount reductions.
Compensation remains our second largest expenditure behind freight
costs and is the area where we know we can have the largest impact
from the standpoint of controlling expenses. We also know that
there is more work that we can and will do to control expenses
moving forward.
“We should again caution that our business is service-based, and
we rely on highly skilled individuals to support our customers.
History tells us that global trade operates in cycles and that we
have periods when global volumes decline, as well as periods when
global volumes grow. We’ve seen a year of declines in 2023, but we
need to work hard to ensure that we have the right level of
staffing to handle market increases and our expected growth in
market share as we move forward. Managing expenses is an important
role of any leadership team, but cutting expenses is only one part
of effective management. Equally important is the expectation that
management will grow the business. We remain committed to
both.”
Bradley S. Powell, Senior Vice President and Chief Financial
Officer, added, “Despite reducing headcount in each quarter of 2023
and bringing costs down both sequentially and year-over-year,
expenses are still high when compared to our efficiency target and
we are working to bring expenses down further. Even though
compensation, our largest and most variable expense, is 20% lower
than the same quarter a year ago, just about everything else is
more expensive. We are not as efficient as we need to be for the
current environment of excess capacity, weak demand, soft rates,
and economic uncertainty. We continue to be focused on further
aligning headcount and overhead expenses with lower levels of
transactions and volumes. At the same time, we recognize the need
to be prepared when tonnage and volumes eventually begin to trend
upward in a rate environment that is less volatile.”
Mr. Powell noted that the Company generated $1.1 billion in cash
flow from operations in 2023 and returned $1.6 billion to
shareholders in share repurchases and dividends.
Expeditors is a global logistics company headquartered in
Seattle, Washington. The Company employs trained professionals in
176 district offices and numerous branch 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, time-definite
transportation, order management, warehousing and distribution and
customized logistics solutions.
_______________________
1Diluted earnings attributable to
shareholders per share.
NOTE: See Disclaimer on Forward-Looking
Statements in this release.
Disclaimer on Forward-Looking
Statements:
Certain statements contained in this news release are
“forward-looking statements,” based on management’s views with
respect to future events and underlying assumptions that involve
risks and uncertainties. These forward-looking statements include
statements regarding uncertainty in the ocean and air markets,
including uncertainty due to conflicts in the Middle East and Red
Sea; new capacity in the marketplace; cautious shipper demand and
variable rate stability. Future financial performance could differ
materially because of factors such as: our ability to reduce
headcount and to control expenses and bring them in line with
revenue; that volumes and tonnage will increase and that we will be
able to grow in market share; that management is able to grow the
business; that we are able to improve our efficiency; our ability
to leverage the strength of our carrier relationships; the strength
of our non-asset-based operating model; and our ability to remain a
strong, healthy, unified and resilient organization. The
normalizing of the supply chain at the end of the pandemic, along
with the current uncertainty in the global economy, could have the
effect of heightening many of the other risks described in Item 1A
of our Annual Report on Form 10-K, including, without limitation,
those related to the success of our strategy and desire to maintain
historical unitary profitability, our ability to attract and retain
customers, our ability to manage costs, interruptions to our
information technology systems, the ability of third-party
providers to perform and potential litigation as updated by our
reports on Form 10-Q, filed with the Securities and Exchange
Commission. These and other factors are discussed in the Company’s
regulatory filings with the Securities and Exchange Commission,
including those in “Item 1A. Risk Factors” of the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2022 and
the Company’s most recent Form 10-Q. The forward-looking statements
contained in this news release speak only as of this date and the
Company does not assume any obligation to update them except as
required by law.
Expeditors International of Washington,
Inc.
Fourth quarter 2023 Earnings Release,
February 20, 2024
Financial Highlights for the three and
twelve months ended December 31, 2023 and 2022 (Unaudited)
(in 000's of US dollars except share
data)
Three months ended December
31,
Twelve months ended December
31,
2023
2022
% Change
2023
2022
% Change
Revenues
$
2,277,768
$
3,441,528
(34)%
$
9,300,110
$
17,071,284
(46)%
Directly related cost of transportation
and other expenses 1
$
1,513,604
$
2,425,565
(38)%
$
6,054,000
$
12,576,897
(52)%
Salaries and other operating
expenses 2
$
564,766
$
686,257
(18)%
$
2,306,177
$
2,670,016
(14)%
Operating income
$
199,398
$
329,706
(40)%
$
939,933
$
1,824,371
(48)%
Net earnings attributable to
shareholders
$
158,719
$
219,276
(28)%
$
752,883
$
1,357,399
(45)%
Diluted earnings attributable to
shareholders per share
$
1.09
$
1.38
(21)%
$
5.01
$
8.26
(39)%
Basic earnings attributable to
shareholders per share
$
1.09
$
1.39
(22)%
$
5.05
$
8.33
(39)%
Diluted weighted average shares
outstanding
145,891
158,535
150,186
164,427
Basic weighted average shares
outstanding
144,979
157,269
149,141
163,010
________________ 1Directly related cost of
transportation and other expenses totals Operating Expenses from
Airfreight services, Ocean freight and ocean services and Customs
brokerage and other services as shown in the Condensed Consolidated
Statements of Earnings.
2Salaries and other operating expenses
totals Salaries and related, Rent and occupancy, Depreciation and
amortization, Selling and promotion and Other as shown in the
Condensed Consolidated Statements of Earnings.
During the three and twelve months ended December 31, 2023, we
repurchased 1.6 million and 12.1 million shares of common stock at
an average price of $119.22 and $114.68 per share, respectively.
During the three and twelve months ended December 31, 2022, we
repurchased 5.0 million and 14.5 million shares of common stock at
an average price of $112.76 and $108.88 per share, respectively. On
February 19, 2024 the Board of Directors amended the Discretionary
Stock Repurchase Plan to further authorize share repurchases down
to 130 million shares of common stock. This authorization has no
expiration date. In addition, during 2023 and 2022, we paid cash
dividends of $1.38 and $1.34 per share, respectively.
Employee Full-time Equivalents
as of December 31,
2023
2022
North America
6,864
7,778
Europe
3,791
4,228
North Asia
2,260
2,448
South Asia
1,693
1,851
Middle East, Africa and India
1,428
1,540
Latin America
750
859
Information Systems
1,259
1,173
Corporate
407
425
Total
18,452
20,302
Fourth quarter year-over-year
percentage (decrease) increase in:
Airfreight kilos
Ocean freight FEU
2023
October
(6)%
(12)%
November
(6)%
(10)%
December
3%
(7)%
Quarter
(3)%
(10)%
Investors may submit written questions via e-mail to:
investor@expeditors.com. Questions received by the end of business
on February 23, 2024 will be considered in management's 8-K
“Responses to Selected Questions.”
EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(In thousands, except per share
data)
(Unaudited)
December 31,
2023
December 31,
2022
Assets:
Current Assets:
Cash and cash equivalents
$
1,512,883
$
2,034,131
Accounts receivable, less allowance for
credit loss of $6,550 and $9,466 at December 31, 2023 and 2022,
respectively
1,532,599
2,107,645
Deferred contract costs
218,807
257,545
Other
170,907
118,696
Total current assets
3,435,196
4,518,017
Property and equipment, net
479,225
501,916
Operating lease right-of-use assets
516,280
507,503
Goodwill
7,927
7,927
Deferred federal and state income taxes,
net
63,690
37,449
Other assets, net
21,491
17,622
Total assets
$
4,523,809
$
5,590,434
Liabilities:
Current Liabilities:
Accounts payable
$
860,856
$
1,108,996
Accrued expenses, primarily salaries and
related costs
447,336
479,262
Contract liabilities
280,909
323,101
Current portion of operating lease
liabilities
99,749
95,621
Federal, state and foreign income
taxes
15,562
47,075
Total current liabilities
1,704,412
2,054,055
Noncurrent portion of operating lease
liabilities
427,984
422,844
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, none issued
—
—
Common stock, par value $0.01 per share.
Issued and outstanding: 143,866 shares and 154,313 shares at
December 31, 2023 and 2022, respectively
1,439
1,543
Additional paid-in capital
—
139
Retained earnings
2,580,968
3,310,892
Accumulated other comprehensive loss
(192,057
)
(202,553
)
Total shareholders’ equity
2,390,350
3,110,021
Noncontrolling interest
1,063
3,514
Total equity
2,391,413
3,113,535
Total liabilities and equity
$
4,523,809
$
5,590,434
EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements
of Earnings
(In thousands, except per share
data)
(Unaudited)
Three months ended
December 31,
Twelve months ended
December 31,
2023
2022
2023
2022
Revenues:
Airfreight services
$
866,122
$
1,204,810
$
3,246,527
$
5,886,886
Ocean freight and ocean services
511,854
1,124,088
2,363,243
6,544,559
Customs brokerage and other services
899,792
1,112,630
3,690,340
4,639,839
Total revenues
2,277,768
3,441,528
9,300,110
17,071,284
Operating Expenses:
Airfreight services
639,725
899,865
2,347,293
4,359,726
Ocean freight and ocean services
357,788
842,103
1,634,947
5,188,066
Customs brokerage and other services
516,091
683,597
2,071,760
3,029,105
Salaries and related
409,605
509,884
1,700,516
2,056,387
Rent and occupancy
58,134
54,291
232,358
209,532
Depreciation and amortization
21,386
14,922
67,760
57,338
Selling and promotion
9,066
8,119
27,913
24,293
Other
66,575
99,041
277,630
322,466
Total operating expenses
2,078,370
3,111,822
8,360,177
15,246,913
Operating income
199,398
329,706
939,933
1,824,371
Other Income (Expense):
Interest income
16,728
13,107
70,451
25,554
Interest expense
(159
)
(22,245
)
(4,800
)
(23,277
)
Other, net
409
480
9,444
9,243
Other income (expense), net
16,978
(8,658
)
75,095
11,520
Earnings before income taxes
216,376
321,048
1,015,028
1,835,891
Income tax expense
57,231
106,311
263,249
475,286
Net earnings
159,145
214,737
751,779
1,360,605
Less net earnings (losses) attributable to
the noncontrolling interest
426
(4,539
)
(1,104
)
3,206
Net earnings attributable to
shareholders
$
158,719
$
219,276
$
752,883
$
1,357,399
Diluted earnings attributable to
shareholders per share
$
1.09
$
1.38
$
5.01
$
8.26
Basic earnings attributable to
shareholders per share
$
1.09
$
1.39
$
5.05
$
8.33
Weighted average diluted shares
outstanding
145,891
158,535
150,186
164,427
Weighted average basic shares
outstanding
144,979
157,269
149,141
163,010
EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements
of Cash Flows
(In thousands)
(Unaudited)
Three months ended
December 31,
Twelve months ended
December 31,
2023
2022
2023
2022
Operating Activities:
Net earnings
$
159,145
$
214,737
$
751,779
$
1,360,605
Adjustments to reconcile net earnings to
net cash from operating activities:
Provisions for losses on accounts
receivable
1,627
1,133
3,943
11,050
Deferred income tax benefit
(14,974
)
(18,312
)
(22,916
)
(33,240
)
Stock compensation expense
11,437
13,101
58,399
64,397
Depreciation and amortization
21,386
14,922
67,760
57,338
Other, net
2,065
1,108
8,461
1,252
Changes in operating assets and
liabilities:
(Increase) decrease in accounts
receivable
(55,481
)
711,977
573,724
1,592,341
Increase (decrease) in accounts payable
and accrued expenses
11,645
(454,221
)
(300,345
)
(798,123
)
Decrease in deferred contract costs
8,082
277,805
36,952
714,960
Decrease in contract liabilities
(6,527
)
(309,530
)
(40,076
)
(798,356
)
Increase (decrease) in income taxes
payable, net
20,445
23,439
(77,298
)
(55,129
)
(Increase) decrease in other, net
(497
)
10,540
(7,192
)
12,580
Net cash from operating activities
158,353
486,699
1,053,191
2,129,675
Investing Activities:
Purchase of property and equipment
(10,714
)
(18,326
)
(39,314
)
(86,824
)
Other, net
90
(245
)
(119
)
(890
)
Net cash from investing activities
(10,624
)
(18,571
)
(39,433
)
(87,714
)
Financing Activities:
Payments on borrowing on lines of
credit
(4,507
)
(688
)
(38,143
)
(30,289
)
Proceeds from borrowing on lines of
credit
5,246
25,211
32,199
81,756
Proceeds from issuance of common stock
4,584
7,662
84,889
80,980
Repurchases of common stock
(193,592
)
(563,802
)
(1,392,886
)
(1,581,908
)
Dividends Paid
(99,766
)
(103,971
)
(202,029
)
(213,799
)
Payments for taxes related to net share
settlement of equity awards
(5
)
(2
)
(19,506
)
(19,335
)
Distributions to noncontrolling
interest
(1,089
)
(1,402
)
(1,089
)
(1,945
)
Net cash from financing activities
(289,129
)
(636,992
)
(1,536,565
)
(1,684,540
)
Effect of exchange rate changes on cash
and cash equivalents
14,855
48,461
1,559
(51,982
)
Change in cash and cash equivalents
(126,545
)
(120,403
)
(521,248
)
305,439
Cash and cash equivalents at beginning of
period
1,639,428
2,154,534
2,034,131
1,728,692
Cash and cash equivalents at end of
period
$
1,512,883
$
2,034,131
$
1,512,883
$
2,034,131
Taxes Paid:
Income taxes
$
50,321
$
100,822
$
356,380
$
566,533
EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC.
AND SUBSIDIARIES
Business Segment Information
(In thousands)
(Unaudited)
UNITED STATES
OTHER NORTH AMERICA
LATIN AMERICA
NORTH ASIA
SOUTH ASIA
EUROPE
MIDDLE EAST, AFRICA AND
INDIA
ELIMI- NATIONS
CONSOLI- DATED
For the three months ended December 31,
2023:
Revenues
$
775,382
109,933
45,350
573,020
234,260
422,340
118,670
(1,187
)
2,277,768
Directly related cost of transportation
and other expenses1
$
422,015
68,096
27,237
461,029
175,214
276,161
84,391
(539
)
1,513,604
Salaries and other operating expenses2
$
252,715
34,345
17,423
67,098
42,786
120,331
30,707
(639
)
564,766
Operating income (loss)
$
100,652
7,492
690
44,893
16,260
25,848
3,572
(9
)
199,398
Identifiable assets at period end
$
2,595,576
174,509
109,380
449,529
237,470
721,259
256,199
(20,113
)
4,523,809
Capital expenditures
$
8,016
315
82
424
227
1,142
508
—
10,714
Depreciation and amortization
$
15,401
475
281
1,106
460
2,876
787
—
21,386
Equity
$
1,774,874
19,222
54,581
158,329
103,573
167,141
154,038
(40,345
)
2,391,413
For the three months ended December 31,
2022:
Revenues
$
1,118,262
127,442
65,821
969,266
367,679
599,947
194,342
(1,231
)
3,441,528
Directly related cost of transportation
and other expenses1
$
639,804
80,052
41,480
799,583
288,014
432,835
144,377
(580
)
2,425,565
Salaries and other operating expenses2
$
(18,767
)
101,864
29,523
178,038
117,024
239,627
39,588
(640
)
686,257
Operating income3
$
497,225
(54,474
)
(5,182
)
(8,355
)
(37,359
)
(72,515
)
10,377
(11
)
329,706
Identifiable assets at period end
$
3,070,697
209,516
123,003
675,022
316,777
938,660
283,872
(27,113
)
5,590,434
Capital expenditures
$
11,262
282
232
1,098
391
4,525
536
—
18,326
Depreciation and amortization
$
9,433
454
280
1,069
472
2,527
687
—
14,922
Equity
$
2,246,417
31,132
56,416
274,703
136,944
263,278
145,269
(40,624
)
3,113,535
UNITED STATES
OTHER NORTH AMERICA
LATIN AMERICA
NORTH ASIA
SOUTH ASIA
EUROPE
MIDDLE EAST, AFRICA AND
INDIA
ELIMI- NATIONS
CONSOLI- DATED
For the twelve months ended December
31, 2023:
Revenues
$
3,311,327
436,331
197,344
2,180,808
865,261
1,808,624
505,194
(4,779
)
9,300,110
Directly related cost of transportation
and other expenses1
$
1,809,526
270,080
117,376
1,700,025
612,606
1,200,753
345,873
(2,239
)
6,054,000
Salaries and other operating expenses2
$
1,037,997
143,237
69,595
273,074
175,770
493,335
115,710
(2,541
)
2,306,177
Operating income
$
463,804
23,014
10,373
207,709
76,885
114,536
43,611
1
939,933
Identifiable assets at period end
$
2,595,576
174,509
109,380
449,529
237,470
721,259
256,199
(20,113
)
4,523,809
Capital expenditures
$
23,845
1,247
442
1,534
971
7,830
3,445
—
39,314
Depreciation and amortization
$
44,039
1,879
1,123
4,597
1,940
11,313
2,869
—
67,760
Equity
$
1,774,874
19,222
54,581
158,329
103,573
167,141
154,038
(40,345
)
2,391,413
For the twelve months ended December
31, 2022:
Revenues
$
4,869,364
517,662
257,721
5,810,088
2,144,034
2,471,456
1,005,489
(4,530
)
17,071,284
Directly related cost of transportation
and other expenses1
$
2,943,232
310,206
160,273
4,853,902
1,751,187
1,768,102
791,887
(1,892
)
12,576,897
Salaries and other operating expenses2
$
944,050
188,192
72,177
504,805
238,658
573,598
151,069
(2,533
)
2,670,016
Operating income
$
982,082
19,264
25,271
451,381
154,189
129,756
62,533
(105
)
1,824,371
Identifiable assets at period end
$
3,070,697
209,516
123,003
675,022
316,777
938,660
283,872
(27,113
)
5,590,434
Capital expenditures
$
56,411
2,954
937
2,976
1,543
17,868
4,135
—
86,824
Depreciation and amortization
$
35,461
1,892
1,123
4,682
1,966
9,640
2,574
—
57,338
Equity
$
2,246,417
31,132
56,416
274,703
136,944
263,278
145,269
(40,624
)
3,113,535
1 Directly related cost of transportation
and other expenses totals Operating Expenses from Airfreight
services, Ocean freight and ocean services and Customs brokerage
and other services as shown in the Condensed Consolidated
Statements of Earnings.
2 Salaries and other operating expenses
totals Salaries and related, Rent and occupancy, Depreciation and
amortization, Selling and promotion and Other as shown in the
Condensed Consolidated Statements of Earnings.
3 In 2022, certain intercompany fees were
billed to our subsidiaries in the 4th quarter covering the entirety
of 2022. This resulted in fourth quarter operating losses or
reduced operating income for some of our business segments when
compared to the current year where these amounts were billed
monthly.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240219324553/en/
Jeffrey S. Musser President and Chief Executive Officer (206)
674-3433
Bradley S. Powell Senior Vice President and Chief Financial
Officer (206) 674-3412
Geoffrey Buscher Director - Investor Relations (206)
892-4510
Expeditors International... (NYSE:EXPD)
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From Apr 2024 to May 2024
Expeditors International... (NYSE:EXPD)
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From May 2023 to May 2024