Expeditors International of Washington : Expeditors Reports Fourth Quarter 2011 EPS of $.43 Per Share 1
02/21/2012| 09:25am US/Eastern
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Expeditors International of Washington, Inc. (NASDAQ:EXPD) today
announced net earnings attributable to shareholders of $92,843,000 for
the fourth quarter of 2011, as compared with $96,502,000 for the same
quarter of 2010, a decrease of (4)%. Net revenues for the fourth quarter
of 2011 increased 5% to $476,155,000as compared with
$453,362,000 reported for the fourth quarter of 2010. Total revenues and
operating income were $1,501,914,000and $155,064,000in
2011, as compared with $1,582,135,000 and $148,572,000 for the same
quarter of 2010, a decrease of (5)% and an increase of 4%, respectively.
Diluted net earnings attributable to shareholders per share for the
fourth quarter were $.43, as compared with $.45 for the same quarter in
2010, a decrease of (4)%.
For the year ended December 31, 2011, net earnings attributable to
shareholders was $385,679,000, as compared with $344,172,000 in 2010, an
increase of 12%. Net revenues for the year increased to $1,896,477,000
from $1,692,786,000 for 2010, up 12%. Total revenues and operating
income for the year were $6,150,498,000 and $618,327,000 in 2011, as
compared with $5,967,573,000 and $547,230,000 for the same period in
2010, increases of 3% and 13%, respectively. Diluted net earnings
attributable to shareholders per share for the year ended December 31,
2011 were $1.79, as compared with $1.59 for the same period of 2010, an
increase of 13%.
"From a strategic perspective, our 2011 fourth quarter financial results
showed all the things we think are important," said Peter J. Rose,
Chairman and Chief Executive Officer. "Operating income as a percentage
of net revenue, at 32.6%, remained well above 30% for the seventh
straight quarter while salaries as a percentage of net revenue were very
much in line with our historical expectations. All in all, we think the
things we can control most, we controlled best. From a tactical
perspective, however, we would like to have seen stronger freight
volumes as the customary real peak season surge never materialized. The
lack of a peak season created irregular demand throughout the quarter.
While this resulted in some intermittent spot buying opportunities in
both the air and ocean freight markets, ultimately they were not
sufficient to compensate for relatively weaker freight demand. Despite
this quarters unpredictable shipping patterns, we still managed to grow
both net revenue and operating income 5% and 4% respectively. That's
something we take great comfort in. For the year ended 2011, net revenue
and operating income increased 12% and 13% respectively. That is the
kind of annual performance we don't feel particularly compelled to
apologize for...particularly in these times," Rose continued.
"Our third quarter 2011 earnings release highlighted our concerns about
global trends for the remainder for 2011 and 2012. While 2011 was a
record year, and we are generally optimistic about 2012, the underlying
flow of goods both in the global economy and throughout our network in
January still give us some cause to reiterate those concerns in the near
term. That said, given the outstanding talents and abilities of our
people and the support of both our customers and service providers, we
remain very confident that we have the wherewithal to successfully
address any near term challenges that may occur by staying true to our
proven, long-term values and objectives," concluded Rose.
Expeditors is a global logistics company headquartered in Seattle,
Washington. The company employs trained professionals in 185
full-service offices and 64 satellite locations 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.
4th Quarter 2011 Earnings Release, February 21, 2012
Financial Highlights for the Three months and Years ended
December 31, 2011 and 2010 (Unaudited)
(in 000's of US dollars except share data)
Three months ended
December 31,
Years ended December 31,
%
Increase
%
2011
2010
(Decrease)
2011
2010
Increase
Revenues
$
1,501,914
$
1,582,135
(5)%
$
6,150,498
$
5,967,573
3%
Net revenues
$
476,155
$
453,362
5%
$
1,896,477
$
1,692,786
12%
Operating income
$
155,064
$
148,572
4%
$
618,327
$
547,230
13%
Net earnings attributable to shareholders
$
92,843
$
96,502
(4)%
$
385,679
$
344,172
12%
Diluted earnings attributable to shareholders
$
.43
$
.45
(4)%
$
1.79
$
1.59
13%
Basic earnings attributable to shareholders
$
.44
$
.45
(2)%
$
1.82
$
1.62
12%
Diluted weighted average shares outstanding
214,159,723
216,587,468
215,033,580
216,446,656
Basic weighted average shares outstanding
211,988,482
212,217,035
212,117,511
212,283,966
Employee headcount as of
December 31,
2011
2010
North America
4,666
4,400
Asia Pacific
4,083
3,864
Europe and Africa
2,262
2,074
Middle East
1,250
1,169
South America
645
607
Information Systems
558
559
Corporate
228
197
Total
13,692
12,870
Year-over-year percentage
increase (decrease) in:
Ocean freight
Airfreight kilos
FEU
2011
October
(14)%
2%
November
(6)%
1%
December
(9)%
7%
Quarter
(10)%
3%
During the fourth quarter of 2011, the Company closed one satellite
office in Detroit-Ambassador Bridge, United States.
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 ability to maintain operating income as a percentage of net
revenue over 30%, ability to benefit in the future from spot buying
opportunities, ability to grow net revenue and operating income, changes
in consumer confidence in freight volumes, and ability to succeed in
2012, both from a near and long-term perspective. 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)
December 31,
December 31,
2011
2010
Assets
Current Assets:
Cash and cash equivalents
$
1,294,356
$
1,084,465
Short-term investments
472
524
Accounts receivable, net
934,752
1,003,884
Deferred Federal and state income taxes
10,415
8,706
Other current assets
46,888
42,776
Total current assets
2,286,883
2,140,355
Property and equipment, net
538,806
498,648
Goodwill, net
7,927
7,927
Other intangibles, net
2,630
3,716
Other assets, net
30,581
28,533
$
2,866,827
$
2,679,179
Liabilities and Equity
Current Liabilities:
Accounts payable
606,628
652,161
Accrued expenses, primarily salaries and related costs
169,445
177,869
Federal, state and foreign income taxes
20,072
31,948
Total current liabilities
796,145
861,978
Deferred Federal and state income taxes
60,613
69,047
Commitments and contingencies
Shareholders' Equity:
Preferred stock; none issued
--
--
Common stock, par value $.01 per share; issued and outstanding
212,003,662 shares at December 31, 2011 and 212,047,774 shares at
December 31, 2010
2,120
2,120
Additional paid-in capital
13,260
13,412
Retained earnings
1,991,222
1,717,249
Accumulated other comprehensive (loss) income
(2,964
)
8,125
Total shareholders' equity
2,003,638
1,740,906
Noncontrolling interest
6,431
7,248
Total equity
2,010,069
1,748,154
$
2,866,827
$
2,679,179
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(In thousands, except share data)
(Unaudited)
Three months ended
Twelve months ended
December 31,
December 31,
2011
2010
2011
2010
Revenues:
Airfreight services
$
705,744
$
778,009
$
2,893,474
$
2,821,828
Ocean freight and ocean services
441,102
481,263
1,878,595
1,955,400
Customs brokerage and other services
355,068
322,863
1,378,429
1,190,345
Total revenues
1,501,914
1,582,135
6,150,498
5,967,573
Operating Expenses:
Airfreight consolidation
534,159
604,309
2,193,122
2,181,598
Ocean freight consolidation
333,567
379,250
1,443,170
1,569,877
Customs brokerage and other services
158,033
145,214
617,729
523,312
Salaries and related costs
247,917
237,822
993,358
894,132
Rent and occupancy costs
20,578
19,988
84,665
77,209
Depreciation and amortization
9,146
9,310
36,776
36,900
Selling and promotion
10,447
9,593
38,974
32,055
Other
33,003
28,077
124,377
105,260
Total operating expenses
1,346,850
1,433,563
5,532,171
5,420,343
Operating income
155,064
148,572
618,327
547,230
Interest income
2,715
2,064
10,235
7,002
Interest expense
(248
)
(198
)
(970
)
(576
)
Other, net
(2,330
)
1,181
10,436
10,412
Other income (expense), net
137
3,047
19,701
16,838
Earnings before income taxes
155,201
151,619
638,028
564,068
Income tax expense
62,061
55,171
251,785
219,863
Net earnings
93,140
96,448
386,243
344,205
Less net earnings (losses) attributable to the noncontrolling
interest
297
(54
)
564
33
Net earnings attributable to shareholders
$
92,843
$
96,502
$
385,679
$
344,172
Diluted earnings attributable to shareholders per share
$
.43
$
.45
$
1.79
$
1.59
Basic earnings attributable to shareholders per share
$
.44
$
.45
$
1.82
$
1.62
Dividends declared and paid per common share
$
.25
$
.20
$
.50
$
.40
Weighted average diluted shares outstanding
214,159,723
216,587,468
215,033,580
216,446,656
Weighted average basic shares outstanding
211,988,482
212,217,035
212,117,511
212,283,966
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
Three months ended
Twelve months ended
December 31,
December 31,
2011
2010
2011
2010
Operating Activities:
Net earnings
$
93,140
$
96,448
$
386,243
$
344,205
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Provision for losses on accounts receivable
166
305
1,327
3,414
Deferred income tax expense (benefit)
5,598
8,048
(4,065
)
10,569
Excess tax benefits from stock plans
(232
)
(12,274
)
(5,300
)
(23,863
)
Stock compensation expense
10,832
10,696
44,278
43,743
Depreciation and amortization
9,146
9,310
36,776
36,900
Loss (gain) on sale of assets
414
140
360
(321
)
Other
308
304
2,136
1,536
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable
58,717
77,947
46,915
(188,823
)
(Increase) decrease in other current assets
(1,620
)
1,484
(7,483
)
(1,475
)
(Decrease) increase in accounts payable and accrued expenses
(54,879
)
(60,302
)
(40,819
)
130,138
(Decrease) increase in income taxes payable, net
(13,654
)
2,725
(3,237
)
39,495
Net cash provided by operating activities
107,936
134,831
457,131
395,518
Investing Activities:
Decrease in short-term investments
6
81
29
188
Purchase of property and equipment
(19,261
)
(15,755
)
(78,115
)
(42,408
)
Proceeds from sale of property and equipment
84
92
193
360
Prepayment on long-term leases, net
--
--
(936
)
--
Other
253
(632
)
(1,510
)
(319
)
Net cash used in investing activities
(18,918
)
(16,214
)
(80,339
)
(42,179
)
Financing Activities:
Proceeds from issuance of common stock
2,055
38,826
56,646
99,784
Repurchases of common stock
(3,499
)
(106,862
)
(112,071
)
(246,312
)
Excess tax benefits from stock plans
232
12,274
5,300
23,863
Dividends paid
(52,997
)
(42,475
)
(106,011
)
(84,872
)
Distribution to noncontrolling interest
(133
)
(88
)
(955
)
(1,051
)
Net cash used in financing activities
(54,342
)
(98,325
)
(157,091
)
(208,588
)
Effect of exchange rate changes on cash and cash equivalents
(1,134
)
6,947
(9,810
)
13,785
Increase in cash and cash equivalents
33,542
27,239
209,891
158,536
Cash and cash equivalents at beginning of period
1,260,814
1,057,226
1,084,465
925,929
Cash and cash equivalents at end of period
$
1,294,356
$
1,084,465
$
1,294,356
$
1,084,465
Interest and taxes paid:
Interest
$
231
$
57
$
296
$
110
Income taxes
83,454
42,369
266,621
171,618
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Business Segment Information
(In thousands) (Unaudited)
OTHER
MIDDLE
UNITED
NORTH
LATIN
ASIA
EUROPE and
EAST and
ELIMI-
CONSOLI-
STATES
AMERICA
AMERICA
PACIFIC
AFRICA
INDIA
NATIONS
DATED
Three months ended December 31, 2011:
Revenues from unaffiliated customers
$
383,830
48,839
19,490
761,092
218,074
70,589
--
1,501,914
Transfers between geographic areas
24,639
2,641
5,356
10,159
10,570
4,592
(57,957
)
--
Total revenues
$
408,469
51,480
24,846
771,251
228,644
75,181
(57,957
)
1,501,914
Net revenues
$
183,381
24,367
14,673
150,262
76,950
26,522
--
476,155
Operating income
$
41,652
10,314
5,056
68,971
19,048
10,023
--
155,064
Identifiable assets
$
1,521,657
86,020
48,221
667,171
401,518
141,379
861
2,866,827
Capital expenditures
$
8,404
199
166
8,760
1,288
444
--
19,261
Depreciation and amortization
$
5,222
208
226
1,605
1,400
485
--
9,146
Equity
$
1,285,812
49,571
27,346
448,613
145,998
85,605
(32,876
)
2,010,069
Three months ended December 31, 2010:
Revenues from unaffiliated customers
$
368,584
43,083
19,010
867,844
203,958
79,656
--
1,582,135
Transfers between geographic areas
26,804
3,114
4,850
8,976
11,371
4,266
(59,381
)
--
Total revenues
$
395,388
46,197
23,860
876,820
215,329
83,922
(59,381
)
1,582,135
Net revenues
$
177,438
20,322
13,509
146,191
72,528
23,374
--
453,362
Operating income
$
45,968
7,204
4,830
64,006
19,245
7,319
--
148,572
Identifiable assets
$
1,343,098
95,298
51,326
612,085
432,019
144,043
1,310
2,679,179
Capital expenditures
$
4,991
157
332
1,776
7,968
531
--
15,755
Depreciation and amortization
$
5,372
321
241
1,885
940
551
--
9,310
Equity
$
1,089,053
46,601
27,462
371,610
160,428
84,456
(31,456
)
1,748,154
Twelve months ended December 31, 2011:
Revenues from unaffiliated customers
$
1,540,477
189,843
82,312
3,144,641
891,185
302,040
--
6,150,498
Transfers between geographic areas
101,738
11,095
21,222
40,012
43,359
17,897
(235,323
)
--
Total revenues
$
1,642,215
200,938
103,534
3,184,653
934,544
319,937
(235,323
)
6,150,498
Net revenues
$
732,299
90,432
59,968
605,151
307,471
101,156
--
1,896,477
Operating income
$
210,702
29,209
19,151
258,952
72,248
28,065
--
618,327
Identifiable assets
$
1,521,657
86,020
48,221
667,171
401,518
141,379
861
2,866,827
Capital expenditures
$
23,219
1,122
628
25,295
25,856
1,995
--
78,115
Depreciation and amortization
$
20,037
1,038
999
7,243
5,414
2,045
--
36,776
Equity
$
1,285,812
49,571
27,346
448,613
145,998
85,605
(32,876
)
2,010,069
Twelve months ended December 31, 2010:
Revenues from unaffiliated customers
$
1,348,259
163,750
74,327
3,349,960
729,022
302,255
--
5,967,573
Transfers between geographic areas
99,547
10,836
16,932
32,837
40,778
16,184
(217,114
)
--
Total revenues
$
1,447,806
174,586
91,259
3,382,797
769,800
318,439
(217,114
)
5,967,573
Net revenues
$
666,669
77,079
50,937
543,869
264,663
89,569
--
1,692,786
Operating income
$
198,393
23,521
15,985
222,944
63,115
23,272
--
547,230
Identifiable assets
$
1,343,098
95,298
51,326
612,085
432,019
144,043
1,310
2,679,179
Capital expenditures
$
18,128
574
1,320
5,743
14,383
2,260
--
42,408
Depreciation and amortization
$
20,125
1,344
880
7,511
4,661
2,379
--
36,900
Equity
$
1,089,053
46,601
27,462
371,610
160,428
84,456
(31,456
)
1,748,154
Expeditors International of Washington, Inc. R. Jordan Gates,
206-674-3427 President and Chief Operating Officer or Bradley
S. Powell, 206-674-3412 Chief Financial Officer
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