Expeditors Reports Third Quarter 2009 EPS of $.27 Per Share1
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SEATTLE--(BUSINESS WIRE)-- Expeditors International of Washington, Inc. (NASDAQ: EXPD) today announced quarterly net earnings attributable to shareholders of $57,752,000 for the third quarter of 2009, as compared with $85,565,000 for the same quarter of 2008, a decrease of 33%. Net revenues for the third quarter of 2009 decreased 19% to $346,512,000, as compared with $429,127,000 reported for the third quarter of 2008. Total revenues and operating income were $1,037,327,000 and $96,246,000 in 2009, as compared with $1,564,913,000 and $135,396,000 for the same quarter of 2008, decreases of 34% and 29%, respectively. Diluted net earnings attributable to shareholders per share for the third quarter of 2009 were $.27, as compared with $.39 for the same quarter in 2008, a decrease of 31%. The Company also reported that same store net revenues and operating income decreased 19% and 29%, respectively, for the third quarter of 2009 when compared with 2008.
For the nine months ended September 30, 2009, net earnings attributable to shareholders was $171,082,000 as compared with $223,286,000 in 2008, a decrease of 23%. Net revenues for the nine months decreased to $1,013,074,000 from $1,200,780,000 for 2008, down 16%. Total revenues and operating income for the nine months were $2,845,372,000 and $274,647,000 in 2009, as compared with $4,326,489,000 and $353,931,000 for the same period in 2008, decreases of 34% and 22%, respectively. Diluted net earnings attributable to shareholders per share for the first three quarters of 2009 were $.79, as compared with $1.02 for the same period of 2008, a decrease of 23%. Same store net revenues and operating income decreased 16% and 22%, respectively, for the nine months ended September 30, 2009, when compared with the same period of 2008.
"There certainly were significant challenges during the latter part of this quarter as both air and ocean carriers imposed capacity reductions in order to implement very aggressive price increases. While we wouldn't call it 'The Perfect Freight Storm,' the rapidity of these carrier moves created a pricing environment that resulted in our experiencing single digit airfreight yields out of Asia during the first several weeks of September. Ocean yields were also significantly impacted. Market conditions required that we absorb these increases for several weeks as we worked with customers to raise rates in a commercially acceptable manner," said Peter J. Rose, Chairman and Chief Executive Officer. "On a more positive note, however, year-over-year declines in freight volumes for the month of September (as compared to September 2008), were at the lowest levels we've experienced all year. Airfreight tonnage was down 6% while ocean freight container counts were down 17%. Lower yields aside, it was somewhat reassuring to experience freight volumes that, while albeit still negative, seemed to be moving in the right direction," Rose went on to say.
"While we'll be the first to acknowledge 2009 has been a tough year, we remain very positive on how we're positioned for the future, particularly as the global economy gradually strengthens. A strong balance sheet with nearly $1 billion in cash is very stabilizing. With 252 locations throughout the world we're able to grow market share everywhere we have a network presence. Having not resorted to layoffs, while challenging in the short-term, has allowed our people to maintain that Expeditors' esprit de corps that we rely on to service our customers and to grow our business over the long-term," Rose commented. "Sticking to our core values and 'walking the walk' when times are tough provides a tremendously stable springboard from which to expand our customer base, provide technological solutions to our customers and provide opportunities to our people as the business climate improves," Rose concluded.
Expeditors is a global logistics company headquartered in Seattle, Washington. The company employs trained professionals in 183 full-service offices, 65 satellite locations and 4 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.
1 Diluted earnings attributable to shareholders per share.
NOTE: See Disclaimer on Forward-Looking Statements on the following page of this release.
Expeditors International of Washington, Inc.
Financial Highlights
Three months and Nine months ended
September 30, 2009 and 2008
(Unaudited)
(in 000's except share data)
Three Months Ended Nine Months Ended
September 30, September 30,
% %
2009 2008 2009 2008
Decrease Decrease
Revenues $ 1,037,327 $ 1,564,913 34 % $ 2,845,372 $ 4,326,489 34 %
Net revenues $ 346,512 $ 429,127 19 % $ 1,013,074 $ 1,200,780 16 %
Operating $ 96,246 $ 135,396 29 % $ 274,647 $ 353,931 22 %
income
Net earnings
attributable $ 57,752 $ 85,565 33 % $ 171,082 $ 223,286 23 %
to
shareholders
Diluted
earnings
attributable $ .27 $ .39 31 % $ .79 $ 1.02 23 %
to
shareholders
per share
Basic
earnings
attributable $ .27 $ .40 33 % $ .81 $ 1.05 23 %
to
shareholders
per share
Weighted
average
diluted 216,684,079 218,729,790 216,582,370 219,903,341
shares
outstanding
Weighted
average 212,241,480 212,747,871 212,153,404 213,027,420
basic shares
outstanding
During the third quarter of 2009, the Company did not open any new offices and closed one satellite office in Port Elizabeth, South Africa.
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 November 6, 2009 will be considered in management's 8-K "Responses to Selected Questions" expected to be filed on or about November 20, 2009.
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 future economic trends, improving business climate, positive trends in freight volumes and ability to grow market share. 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, inventory build-up, decreased consumer confidence, volatility in equity markets, energy prices, political changes, or the unpredictable acts of competitors and other risks, risk factors and uncertainties detailed in our Annual and Quarterly Reports filed with the Securities and Exchange Commission.
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
September 30, December 31,
Assets 2009 2008
Current assets:
Cash and cash equivalents $ 947,269 $ 741,028
Short-term investments 629 658
Accounts receivable, net 684,248 788,176
Deferred Federal and state income taxes 7,806 7,986
Other current assets 36,568 35,511
Total current assets 1,676,520 1,573,359
Property and equipment, net 496,203 493,129
Goodwill, net 7,927 7,927
Other intangibles, net 5,380 6,503
Other assets 30,857 19,921
$ 2,216,887 $ 2,100,839
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable 486,663 491,823
Accrued expenses, primarily salaries and related 150,880 150,487
costs
Federal, state and foreign income taxes 17,593 28,039
Total current liabilities 655,136 670,349
Deferred Federal and state income taxes 41,796 46,574
Shareholders' equity:
Preferred stock; none issued -- --
Common stock, par value $.01 per share; issued and
outstanding 211,984,747 shares at September 30, 2,120 2,120
2009 and 211,973,377 shares at December 31, 2008
Additional paid-in capital 6,751 7,150
Retained earnings 1,503,162 1,372,356
Accumulated other comprehensive income (loss) 13 (15,208 )
Total shareholders' equity 1,512,046 1,366,418
Noncontrolling interest 7,909 17,498
Total equity 1,519,955 1,383,916
$ 2,216,887 $ 2,100,839
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(In thousands, except share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Revenues:
Airfreight $ 457,405 $ 703,152 $ 1,203,220 $ 1,961,797
services
Ocean freight
and ocean 331,454 567,155 949,380 1,530,420
services
Customs
brokerage and 248,468 294,606 692,772 834,272
other services
Total revenues 1,037,327 1,564,913 2,845,372 4,326,489
Operating
expenses:
Airfreight 340,746 553,672 848,131 1,532,454
consolidation
Ocean freight 247,733 454,622 704,850 1,234,829
consolidation
Customs
brokerage and 102,336 127,492 279,317 358,426
other services
Salaries and 194,743 224,809 571,517 646,159
related costs
Rent and
occupancy 18,183 19,729 54,861 58,538
costs
Depreciation
and 9,923 10,222 30,125 30,050
amortization
Selling and 6,541 8,881 18,310 28,129
promotion
Other 20,876 30,090 63,614 83,973
Total
operating 941,081 1,429,517 2,570,725 3,972,558
expenses
Operating 96,246 135,396 274,647 353,931
income
Interest 2,214 5,005 8,253 14,884
income
Interest (325 ) (23 ) (404 ) (169 )
expense
Other, net 1,192 2,225 7,826 3,337
Other income, 3,081 7,207 15,675 18,052
net
Earnings
before income 99,327 142,603 290,322 371,983
taxes
Income tax 41,763 56,457 119,575 147,710
expense
Net earnings 57,564 86,146 170,747 224,273
Net earnings
attributable
to 188 (581 ) 335 (987 )
noncontrolling
interest
Net earnings
attributable $ 57,752 $ 85,565 $ 171,082 $ 223,286
to
shareholders
Diluted
earnings
attributable $ 0.27 $ 0.39 $ 0.79 $ 1.02
to
shareholders
per share
Basic earnings
attributable
to $ 0.27 $ 0.40 $ 0.81 $ 1.05
shareholders
per share
Dividends
declared and $ - $ - $ 0.19 $ 0.16
paid per
common share
Weighted
average 216,684,079 218,729,790 216,582,370 219,903,341
diluted shares
outstanding
Weighted
average basic 212,241,480 212,747,871 212,153,404 213,027,420
shares
outstanding
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Operating Activities:
Net earnings $ 57,564 $ 86,146 $ 170,747 $ 224,273
Adjustments to reconcile
net earnings to net cash
provided by operating
activities:
Provision for losses on (778 ) 1,503 791 930
accounts receivable
Deferred income tax (6,701 ) 1,117 (12,945 ) 17,590
(benefit) expense
Excess tax benefits from (246 ) (485 ) (5,381 ) (9,880 )
stock plans
Stock compensation expense 10,794 11,513 29,065 34,116
Depreciation and 9,923 10,222 30,125 30,050
amortization
Loss (gain) on sale of 8 (46 ) (2 ) (651 )
assets
Other 365 396 1,092 1,328
Changes in operating assets
and liabilities:
(Increase) decrease in (94,025 ) (51,422 ) 120,318 (83,446 )
accounts receivable
Increase in other current (803 ) (2,544 ) (2,126 ) (1,867 )
assets
Increase (decrease) in
accounts payable and 71,711 13,796 (28,788 ) 95,898
accrued expenses
(Decrease) increase in (5,350 ) 21,482 (3,066 ) (1,955 )
income taxes payable, net
Net cash provided by 42,462 91,678 299,830 306,386
operating activities
Investing Activities:
Decrease (increase) in 17 (6 ) 48 210
short-term investments
Purchase of property and (9,514 ) (24,631 ) (25,336 ) (49,157 )
equipment
Proceeds from sale of 48 106 125 287
property and equipment
Prepayment on long-term (1,898 ) - (9,242 ) -
land lease
Other 438 635 (1,153 ) 690
Net cash used in investing (10,909 ) (23,896 ) (35,558 ) (47,970 )
activities
Financing Activities:
Proceeds from issuance of 25,107 26,737 42,511 46,888
common stock
Repurchases of common stock (34,103 ) (75,332 ) (77,075 ) (144,920 )
Excess tax benefits from 246 485 5,381 9,880
stock plans
Dividends paid - 2 (40,276 ) (34,161 )
Distributions to (1,009 ) (772 ) (1,009 ) (879 )
noncontrolling interests
Purchases of noncontrolling - - (2,122 ) -
interest
Net cash used in financing (9,759 ) (48,880 ) (72,590 ) (123,192 )
activities
Effect of exchange rate 9,493 (26,041 ) 14,559 (13,474 )
changes on cash
Increase (decrease) in cash 31,287 (7,139 ) 206,241 121,750
and cash equivalents
Cash and cash equivalents 915,982 703,488 741,028 574,599
at beginning of period
Cash and cash equivalents $ 947,269 $ 696,349 $ 947,269 $ 696,349
at end of period
Interest and taxes paid:
Interest $ 317 20 $ 397 166
Income taxes 46,607 32,114 121,717 123,999
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES
Business Segment Information
(In thousands)
(Unaudited)
Other Europe Middle
United North Latin Asia and East Austral- Elimi- Consoli-
States America America Africa and asia nations dated
India
Three months
ended
September
30, 2009
Revenues
from $ 246,066 32,214 16,552 516,897 147,354 60,269 17,975 1,037,327
unaffiliated
customers
Transfers
between 18,293 1,716 3,461 4,227 6,487 3,738 2,595 (40,517 ) -
geographic
areas
Total $ 264,359 33,930 20,013 521,124 153,841 64,007 20,570 (40,517 ) 1,037,327
revenues
Net revenues $ 139,232 16,667 10,960 89,490 57,857 20,771 11,535 346,512
Operating $ 37,502 4,090 2,611 33,303 9,650 5,424 3,666 96,246
income
Identifiable $ 1,135,327 73,500 37,216 435,584 376,050 121,079 35,518 2,613 2,216,887
assets
Capital $ 7,656 186 171 248 506 588 159 9,514
expenditures
Depreciation
and $ 5,048 358 245 1,868 1,593 646 165 9,923
amortization
Equity $ 1,656,409 44,455 14,982 308,304 137,278 70,531 22,487 (734,491 ) 1,519,955
Three months
ended
September
30, 2008
Revenues
from $ 338,662 43,225 21,274 852,255 215,018 72,904 21,575 1,564,913
unaffiliated
customers
Transfers
between 30,807 2,883 4,327 5,624 11,966 4,757 2,307 (62,671 ) -
geographic
areas
Total $ 369,469 46,108 25,601 857,879 226,984 77,661 23,882 (62,671 ) 1,564,913
revenues
Net revenues $ 166,045 19,199 14,069 119,309 74,089 23,270 13,146 429,127
Operating $ 40,847 4,586 3,700 58,111 16,804 6,867 4,481 135,396
income
Identifiable $ 980,475 79,031 55,979 527,520 467,859 116,698 38,139 4,636 2,270,337
assets
Capital $ 9,219 658 171 9,861 3,748 925 49 24,631
expenditures
Depreciation
and $ 5,418 371 316 1,686 1,611 600 220 10,222
amortization
Equity $ 1,488,514 40,254 26,464 397,491 175,093 57,088 25,735 (853,886 ) 1,356,753
Nine months
ended
September
30, 2009
Revenues
from $ 704,962 91,482 47,486 1,373,093 415,479 167,848 45,022 2,845,372
unaffiliated
customers
Transfers
between 54,847 5,340 9,972 11,863 19,086 11,005 7,448 (119,561 ) -
geographic
areas
Total $ 759,809 96,822 57,458 1,384,956 434,565 178,853 52,470 (119,561 ) 2,845,372
revenues
Net revenues $ 399,614 47,718 32,645 275,680 165,623 61,229 30,565 1,013,074
Operating $ 95,483 11,512 8,691 107,424 26,417 15,362 9,758 274,647
income
Identifiable $ 1,135,327 73,500 37,216 435,584 376,050 121,079 35,518 2,613 2,216,887
assets
Capital $ 19,268 477 582 1,259 1,847 1,486 417 - 25,336
expenditures
Depreciation
and $ 15,828 1,031 729 5,714 4,490 1,860 473 - 30,125
amortization
Equity $ 1,656,409 44,455 14,982 308,304 137,278 70,531 22,487 (734,491 ) 1,519,955
Nine months
ended
September
30, 2008
Revenues
from $ 961,377 119,691 63,269 2,300,191 609,879 207,261 64,821 4,326,489
unaffiliated
customers
Transfers
between 81,953 7,579 11,060 16,364 33,725 13,293 6,599 (170,573 ) -
geographic
areas
Total $ 1,043,330 127,270 74,329 2,316,555 643,604 220,554 71,420 (170,573 ) 4,326,489
revenues
Net revenues $ 470,573 53,882 39,246 322,738 212,148 64,223 37,970 1,200,780
Operating $ 102,254 11,779 10,499 152,878 46,600 17,580 12,341 353,931
income
Identifiable $ 980,475 79,031 55,979 527,520 467,859 116,698 38,139 4,636 2,270,337
assets
Capital $ 20,022 1,848 940 16,371 7,042 2,532 402 49,157
expenditures
Depreciation
and $ 16,223 1,011 918 4,439 5,060 1,683 716 30,050
amortization
Equity $ 1,488,514 40,254 26,464 397,491 175,093 57,088 25,735 (853,886 ) 1,356,753
Source: Expeditors International of Washington, Inc.
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