-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LOUmzqy6NaI16WeV1Ma7xTaMqxrH7GH+rP9toug5s36mPYfbOKqnugpRSXIRDuHA JLQgeGQDwK173a7VSAJAUA== 0000950129-03-002629.txt : 20030513 0000950129-03-002629.hdr.sgml : 20030513 20030513080309 ACCESSION NUMBER: 0000950129-03-002629 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030513 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EGL INC CENTRAL INDEX KEY: 0001001718 STANDARD INDUSTRIAL CLASSIFICATION: ARRANGEMENT OF TRANSPORTATION OF FREIGHT & CARGO [4731] IRS NUMBER: 760094895 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27288 FILM NUMBER: 03693905 BUSINESS ADDRESS: STREET 1: 15340 VICKERY DR CITY: HOUSTON STATE: TX ZIP: 77032 BUSINESS PHONE: 2816183100 MAIL ADDRESS: STREET 1: 15350 VICKERY DR STREET 2: SUITE 510 CITY: HOUSTON STATE: TX ZIP: 77032 FORMER COMPANY: FORMER CONFORMED NAME: EAGLE USA AIRFREIGHT INC DATE OF NAME CHANGE: 19951002 8-K 1 h05852e8vk.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): MAY 13, 2003 EGL, INC. (Exact name of registrant as specified in its charter) TEXAS 000-27288 76-0094895 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 15350 VICKERY DRIVE, HOUSTON, TEXAS 77032 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (281) 618-3100 1 ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibits The following exhibit is furnished pursuant to Item 12: 99.1 Press Release, dated May 13, 2003, reporting financial results of EGL, Inc. for the quarter ended March 31, 2003. ITEM 9. INFORMATION PROVIDED UNDER ITEM 12 (RESULTS OF OPERATION AND FINANCIAL CONDITION) The press release attached hereto as Exhibit 99.1 reports financial results for the first quarter of 2003. All of the information furnished in Item 9 and the accompanying exhibit will not be incorporated by reference into any registration statement filed by EGL under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this report is not intended to, and does not, constitute a determination or admission by EGL, that the information in this report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of EGL or any of its affiliates. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: May 13, 2003 EGL, INC. By: /s/ Elijio V. Serrano ---------------------------------- Elijio V. Serrano Chief Financial Officer 3 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION ------- ----------- 99.1 Press Release, dated May 13, 2003, reporting financial results of EGL, Inc. for the quarter ended March 31, 2003.
EX-99.1 3 h05852exv99w1.txt PRESS RELEASE EXHIBIT 99.1 (EGL LOGO) World Headquarters 15350 Vickery Drive Houston, TX 77032 Elijio Serrano Chief Financial Officer 281-618-3665 NEWS RELEASE - -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE TUESDAY, MAY 13, 2003 EGL, INC. REPORTS EPS OF $0.06, GROSS REVENUES OUTSIDE NORTH AMERICA INCREASE 33% HOUSTON, MAY 13, 2003 - EGL, INC. (NASDAQ: EAGL) announced that it earned $2.8 million of net income for the three months ended March 31, 2003, compared to a loss of $3.9 million in the first quarter of 2002. Diluted earnings per share for the quarter were $0.06 compared to diluted loss per share of $0.08 in Q1-2002. FINANCIAL HIGHLIGHTS o Gross revenues improved $67 million, or 16%. o Net revenues increased 9%. o North America gross revenues increased 4% on continued growth of ground shipment activity. o Gross revenues outside North America increased 33% while net revenue margins decreased from 29.3% to 26.3%. o Operating expenses increased 5% (excluding the $2.5 million benefit in Q1-2002 from temporary salary reductions) compared to an increase in net revenues of 9%. o Losses from two logistics projects in Europe decrease EPS by $0.04.
QUARTER ENDED $ thousands (except EPS) 3/31/03 3/31/02 ------------ ------------ Gross revenues $ 483,650 $ 417,109 Net revenues $ 167,566 $ 154,120 Net revenue margin 34.6% 36.9% Operating expenses $ 162,928 $ 152,584 Operating income $ 4,638 $ 1,536 Net income/(loss) $ 2,795 $ (3,917) Diluted EPS $ 0.06 $ (0.08)
Gross revenues increased 16% from the first quarter of 2002 to $484 million on stronger activity levels from all product lines in all geographic areas. EGL Chief Executive Officer, Jim Crane commented, "We continue to see improved performance in all geographic areas during a seasonally weak quarter. Our North America operations have shown growth despite a weak economy and an uncertain global environment. The modest improvements in North America gross revenues, stable net revenue margins, and focus on costs have resulted in a significant swing in profitability for North America compared to last year. Our overseas operations are leveraging our North America network and continue to add revenues. Pricing pressures resulting from our customers' focus on costs and higher surcharges levied by airlines and shipping lines are putting pressure on our net revenue ### margins. During the quarter, we ramped up production of two major logistics projects in Europe that came with some start-up challenges, resulting in after tax losses of $2.0 million on these projects. We have a management team focused on getting these projects profitable." North America gross revenues of $252 million increased 4% as the deferred shipment volumes continued to grow (up 24% over Q1-2002). Net revenue margins of 42.3% were down only slightly from 42.5% last year. The realignment of the dedicated domestic air network and improved utilization of the U.S. infrastructure from the growing deferred ground business contributed toward an improvement in profitability in North America. Net revenues increased $3.6 million from last year while operating income improved $5.6 million - from an operating loss last year of $5.3 million to an operating income in Q1-2003 of $327,000. Gross revenues outside of North America increased 33% to $231 million, as Europe/Middle East/Africa, Asia/Pacific and Latin America all reported gross revenue increases over last year exceeding 30%. Net revenue margins were down from 29.3% last year to 26.3% in the first quarter of this year reflecting pricing pressures on both the air and ocean markets and a change in the mix in the ocean business from direct (down 12%) to consolidations (up 16%). Net revenues were up 19% over last year. Operating income outside North America was down from $6.8 million to $4.3 million as a result of start-up losses incurred on two logistics projects in Europe. These projects started during December 2002 and ramped up in the first quarter of 2003 with additional staffing required to meet production targets. Operating losses from the two projects were $3.2 million ($2.0 million after tax or $0.04 per diluted share). Without such losses, operating income for the first quarter of 2003 would have been $7.9 million compared to $1.5 million in the same quarter last year. Operating income improved by $3.1 million to $4.6 million. Operating expenses increased 5% over last year (excluding a $2.5 million benefit from temporary salary reductions in the first quarter of 2002) and compares to a 9% increase in net revenues. The rate of growth of expenses to net revenues of 58% was slightly above EGL's goal of 50% as a result of the staffing required on the aforementioned logistics projects. Net income of $2.8 million improved by $6.7 million over last year's loss of $3.9 million (which included a $4.5 million after tax, or $0.09 per diluted share, charge for an investment write-off and a $1.5 million after tax, or $0.03 per diluted share, benefit from temporary salary reductions). Diluted earnings per share of $0.06 compares to a loss last year of $0.08 per share. SECOND QUARTER AND TOTAL YEAR 2003 EGL expects second quarter 2003 diluted earnings per share of between $0.10-$0.14, compared to $0.02 in the same quarter last year. For the year 2003, EGL expects diluted earnings per share of between $0.65 to $0.75, compared to $0.20 per diluted share in 2002. EARNINGS CONFERENCE CALL EGL, Inc. plans to host a conference call for shareholders and the investing community on May 13, 2003 at 11 a.m. Eastern time (8 a.m. Pacific) to review results for the quarter ended March 31, 2003. The call can be accessed by dialing (913) 981-5508, access code 768463 and is expected to last approximately 60 minutes. Callers are requested to dial in at least 5 minutes before the start of the call. The call will also be available through live webcast on the company's website, www.eaglegl.com, on the Investor Relations page. An audio replay will be available until Tuesday, May 27, 2003 at (719) 457-0820, access code 768463. First quarter 2003 product and geographic data and air freight statistics are available on EGL's website, www.eaglegl.com on the Investor Relations page. ------------------- -more- Houston-based EGL, Inc. operates under the name EGL Eagle Global Logistics. EGL is a leading global transportation, supply chain management and information services company dedicated to providing superior flexibility and fewer shipping restrictions on a price competitive basis. With 2002 revenues exceeding $1.87 billion, EGL's services include air and ocean freight forwarding, customs brokerage, local pickup and delivery service, materials management, warehousing, trade facilitation and procurement, and integrated logistics and supply chain management services. The Company's shares are traded on the NASDAQ National Market under the symbol "EAGL". ------------------- CAUTIONARY STATEMENTS The statements in this press release (and statements in the conference call referred to above) regarding projected profitability and timing of profitability on logistics projects in Europe, second quarter and total year results, and other statements which are not historical facts, are forward looking statements. Such statements involve risks and uncertainties and other factors detailed in the Company's 2002 Form 10-K, proxy statement/prospectus and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize (or the consequences of such a development worsen), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. The Company disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise. EGL, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands, except per share amounts)
THREE MONTHS ENDED MARCH 31, ---------- ---------- 2003 2002 ---------- ---------- Revenues $ 483,650 $ 417,109 Cost of transportation 316,084 262,989 ---------- ---------- Net revenues 167,566 154,120 Operating expenses: Personnel costs 96,815 85,360 Other selling, general and administrative expenses 66,113 67,224 ---------- ---------- Operating income 4,638 1,536 Nonoperating expense, net (142) (8,306) ---------- ---------- Income (loss) before provision (benefit) for income taxes 4,496 (6,770) Provision (benefit) for income taxes 1,701 (2,640) ---------- ---------- Income (loss) before cumulative effect of change in accounting for negative goodwill 2,795 (4,130) Cumulative effect of change in accounting for negative goodwill -- 213 ---------- ---------- Net income (loss) $ 2,795 $ (3,917) ========== ========== Basic earnings (loss) per share $ 0.06 $ (0.08) Diluted earnings (loss) per share $ 0.06 $ (0.08) Basic weighted-average common shares outstanding 47,066 47,859 Diluted weighted-average common shares outstanding 47,277 47,859
CERTAIN 2002 AMOUNTS HAVE BEEN RECLASSIFIED TO CONFORM TO THE 2003 PRESENTATION EGL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands)
MARCH 31, DECEMBER 31, 2003 2002 ---------- -------------- ASSETS Current assets: Cash, cash equivalents, restricted cash and short-term investments $ 123,240 $ 127,487 Trade accounts receivable, net of allowance 384,484 371,024 Other current assets 52,718 53,412 ---------- -------------- Total current assets 560,442 551,923 Property and equipment, net 154,174 157,403 Assets held for sale 644 644 Investments in unconsolidated affiliates 40,046 40,042 Goodwill, net 82,249 81,881 Other assets, net 19,019 18,414 ---------- -------------- Total assets $ 856,574 $ 850,307 ========== ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term notes payable $ 5,419 $ 5,639 Trade payables and accrued transportation costs 236,285 232,324 Accrued expenses 38,714 39,445 Other liabilities 64,195 73,004 ---------- -------------- Total current liabilities 344,613 350,412 Long-term notes payable 104,845 103,993 Other noncurrent liabilities 5,811 3,720 Deferred income taxes 12,164 6,789 Minority interest 9,169 8,852 Stockholders' equity 379,972 376,541 ---------- -------------- Total liabilities and stockholders' equity $ 856,574 $ 850,307 ========== ==============
EGL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands)
THREE MONTHS ENDED MARCH 31, -------------------------- 2003 2002 ----------- ----------- Cash flows from operating activities: Net income (loss) $ 2,795 $ (3,917) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 7,729 7,479 Bad debt expense 1,753 3,171 Amortization of unearned compensation -- 159 Deferred income tax expense (benefit) 1,614 (2,745) Tax benefit of stock options exercised 75 58 Equity in earnings of affiliates, net of dividends received (4) (669) Minority interests, net of dividends paid 263 319 Transfer to restricted cash (7,182) (109) Cumulative effect of change in accounting for negative goodwill -- (213) Impairment of investment in an unconsolidated affiliate -- 6,653 Other (360) 73 Net effect of changes in working capital, net of assets acquired (12,075) 21,592 ----------- ----------- Net cash provided by (used in) operating activities (5,392) 31,851 ----------- ----------- Cash flows from investing activities: Capital expenditures (4,313) (3,705) Proceeds from sales of other assets 324 2,820 Proceeds from sale-lease back transactions, net -- 2,462 Acquisitions of businesses, net of cash acquired (1,733) -- ----------- ----------- Net cash provided by (used in) investing activities (5,722) 1,577 ----------- ----------- Cash flows from financing activities: Issuance (repayment) of notes payable, net 321 (2,551) Issuance of common stock for employee stock purchase plan -- 469 Proceeds from exercise of stock options 598 146 ----------- ----------- Net cash provided by (used in) financing activities 919 (1,936) ----------- ----------- Effect of exchange rate changes on cash (1,227) (1,911) ----------- ----------- Increase (decrease) in cash and cash equivalents (11,422) 29,581 Cash and cash equivalents, beginning of the period 119,669 77,440 ----------- ----------- Cash and cash equivalents, end of the period $ 108,247 $ 107,021 =========== ===========
FIRST QUARTER 2003 PRODUCT AND GEOGRAPHIC DATA AND AIR FREIGHT STATISTICS ARE AVAILABLE ON EGL'S WEBSITE, WWW.EAGLEGL.COM ON THE INVESTOR RELATIONS PAGE. -----END PRIVACY-ENHANCED MESSAGE-----