-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, d+oAg/aZVzZepuAEsGRy24cOYx6Ovya9pamVy5Ob9nAiJOwJ8nh/o1Nh+s9Ph2On 4prcRtlga6fzLaaJHiEhpg== 0000700674-94-000003.txt : 19940523 0000700674-94-000003.hdr.sgml : 19940523 ACCESSION NUMBER: 0000700674-94-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIR EXPRESS INTERNATIONAL CORP /DE/ CENTRAL INDEX KEY: 0000700674 STANDARD INDUSTRIAL CLASSIFICATION: 4731 IRS NUMBER: 362074327 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08306 FILM NUMBER: 94527720 BUSINESS ADDRESS: STREET 1: 120 TOKENEKE RD P.O. BOX 1231 CITY: DARIEN STATE: CT ZIP: 06820 BUSINESS PHONE: 2036557900 MAIL ADDRESS: STREET 1: 120 TOKENEKE RD STREET 2: P O BOX 1231 CITY: DARIEN STATE: CT ZIP: 06820 10-Q 1 1994 FIRST QUARTER 10-Q ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 1994 Commission file number: 1-8306 ------ AIR EXPRESS INTERNATIONAL CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 36-2074327 - - ------------------------------------ ------------------------------------ (State or Other of Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 120 Tokeneke Road, Darien, Connecticut 06820 (203) 655-7900 - - -------------------------------------------------------------------------------- (Address of, Including Zip Code, and Telephone Number, Including Area Code, of of Registrant's Principal Executive Offices) NONE - - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 3 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date (applicable only to corporate registrants). The number of shares of common stock outstanding as of May 10, 1994 was 13,765,583. (Net of 2,181,537 Treasury Shares) ================================================================================ AIR EXPRESS INTERNATIONAL CORPORATION March 1994 Form 10-Q Quarterly Report Table of Contents Part I - Financial Information Page ---- Item 1. Financial Statements Condensed Consolidated Balance Sheets as at March 31, 1994 and December 31, 1993..................... 2 Condensed Consolidated Statements of Operations - three months ended March 31, 1994 and 1993................ 3 Consolidated Statements of Cash Flows - three months ended March 31, 1994 and 1993................ 4 Notes to Condensed Consolidated Financial Statements................................................ 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....................... 7 Part II - Other Information Item 1. Legal Proceedings......................................... 9 Item 6. Exhibits and Reports on Form 8-K.......................... 9 Page 2
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) March 31, 1994 December 31, 1993 -------------- ----------------- (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 58,991 $ 55,063 Short-term investments 10,109 10,109 Accounts receivable, (less allowance for doubtful accounts of $2,832 and $2,846) 149,281 150,969 Other current assets 3,472 3,224 ---------- --------- Total current assets 221,853 219,365 Investment in unconsolidated affiliates 7,740 7,595 Property, plant and equipment (less accumulated depreciation and amortization of $35,335 and $34,096) 28,722 27,323 Deposits and other current assets 4,632 4,604 Goodwill (less accumulated amortization of $5,048 and $4,674) 37,300 37,331 ---------- ---------- Total assets $ 300,247 $ 296,218 ========== ========== LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Current portion of long-term debt $ 1,526 $ 1,509 Bank overdrafts payable 1,471 594 Transportation payable 68,397 69,640 Accounts payable 27,737 27,967 Accrued liabilities 29,872 28,250 Income taxes payables 9,907 10,587 ---------- ---------- Total current liabilities 138,910 138,547 Long-term debt 79,140 78,464 Deferred taxes payable 1,088 1,088 ---------- ---------- Total liabilities 219,138 218,099 Stockholders' Investment: Common stock- Preferred (authorized 1,000,000 shares, none outstanding) - - Common, $.01 par value (authorized 40,000,000 shares, issued 13,748,552 and 13,711,333 shares) 137 137 Capital surplus 41,493 41,251 Cumulative translation adjustments (12,220) (12,282) Retained earnings 91,560 88,657 ---------- ---------- 120,970 117,763 Less: 2,178,003 and 2,163,773 shares of treasury stock, at cost (39,861) (39,644) ---------- ---------- Total stockholders' investment 81,109 78,119 ---------- ---------- Total liabilities and stockholders' investment $ 300,247 $ 296,218 ========== ==========
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AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended March 31, ------------------------------- 1994 1993 ---------- ---------- Revenues $ 204,810 $ 153,344 Operational expenses: Transportation 143,884 102,759 Terminal 33,462 27,023 Selling, general and administrative expenses 21,408 17,685 ---------- ---------- Operating income 6,056 5,877 Other income (expense): Interest expense, net (919) (813) Other, net 407 415 ---------- ---------- (512) (398) ---------- ---------- Income before provision for income taxes 5,544 5,479 Provision for income taxes 2,062 2,027 ---------- ---------- Net income $ 3,482 $ 3,452 ========== ========== Income per common share Primary $ .30 $ .29 ========== ========== Fully diluted $ .30 $ .29 ========== ========== Weighted average number of common shares (000): Primary 11,673 11,733 ========== ========== Fully diluted 13,889 13,196 ========== ==========
The accompanying notes are an integral part of these financial statements. Page 4
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED March 31, 1994 AND 1993 (Dollars in thousands) 1994 1993 ---------- ---------- Cash flows from operating activities: Net income $ 3,482 $ 3,452 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,333 1,183 Amortization of goodwill 301 204 Deferred income taxes (351) - Undistributed (earnings) losses of affiliates (50) (13) Gain on sales of assets, net (19) (5) Other, net (786) (242) Changes in assets and liabilities: Decrease (increase) in accounts receivable, net 1,688 19,235 Decrease (increase) in prepaid expense and other (248) 381 Increase (decrease) in transportation payables (1,243) (3,946) Increase (decrease) in accounts payable (230) (7,074) Increase (decrease) in accrued liabilities 1,620 (6,268) Increase (decrease) in income taxes payable (498) 650 ---------- ---------- Total adjustments 1,517 4,105 ---------- ---------- Net cash provided by operating activities 4,999 7,557 Cash flows from investing activities: Purchase of short-term investments - (33,807) Gains (losses) from hedging activities (105) (450) Proceeds from sales of assets 38 171 Capital expenditures (2,328) (1,387) ---------- ---------- Net cash used in investing activities (2,395) (35,473) Cash flows from financing activities: Net borrowings (repayments) under revolving credit agreement - (5,000) Net borrowings (repayments) in bank overdrafts payable 877 (1,359) Additions to long-term debt 948 72,481 Payment of long-term debt (312) - Issuance of common stock 242 208 Payment of cash dividends (577) (406) Purchase of treasury stock (217) - ---------- ---------- Net cash (used) provided in financing activities 961 65,924 Effect of foreign currency exchange rates on cash 363 (381) ---------- ---------- Net increase (decrease) in cash and cash equivalents 3,928 37,627 Cash and cash equivalents at beginning of period 55,063 14,113 ---------- ---------- Cash and cash equivalents at end of period $ 58,991 $ 51,740 ========== ==========
Page 5 AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS A. The consolidated balance sheet at March 31, 1994, the consolidated statements of operations for the three-month periods ended March 31, 1994 and 1993, and the consolidated statements of cash flows for the three-month periods ended March 31, 1994 and 1993 have been prepared by the Company without audit. In the opinion of management, all adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods have been made. Certain items in the March 31, 1993 financial statements have been reclassified to conform to the classification of March 31, 1994. Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's annual report to stockholders for the year ended December 31, 1993. The results of operations for the period ended March 31, 1994 are not necessarily indicative of the results of operations expected for the full year ending December 31, 1994. B. Investments in equity affiliates are recorded using the equity method. Consolidated net income reflects joint venture profit of $50,000 for the quarter ended March 31, 1994, compared with a profit of $13,000 for the quarter ended March 31, 1993. C. Interest expense, net is as follows:
Three Months Ended March 31, ------------------------- 1994 1993 --------- --------- Interest expense $ (1,420) $ (1,288) Interest income 501 475 --------- --------- Interest expense, net $ (919) $ (813) ========= =========
Page 6 D. Other income (expense) is as follows:
Three Months Ended March 31, ------------------------- 1994 1993 --------- -------- Foreign exchange gains, net $ 388 $ 395 Other, net 19 20 --------- --------- $ 407 $ 415 ========= =========
E. Statement of cash flows - interest and income taxes paid:
Three Months Ended March 31, ------------------------- 1994 1993 --------- --------- Interest $ 2,417 $ 289 Income Taxes 3,065 2,006 --------- --------- $ 5,482 $ 2,295 ========= =========
Page 7 Item 2. Management's Discussion and Analysis of Financial Condition ----------------------------------------------------------- and Results of Operations ------------------------- Results of Operations - - --------------------- Included in the results of operations for the first quarter are the results from the ocean freight activities of Votainer, which was acquired by the Company on July 1, 1993. The results of airfreight and ocean freight activities for the quarter are:
First Quarter 1994 -------------------------------------------- Air Ocean Freight Freight Total --------- --------- --------- Revenues $ 182,656 $ 22,154 $ 204,810 Expense: Transportation 126,972 16,912 143,884 Terminal 29,834 3,628 33,462 Selling, general and administrative 18,956 2,452 21,408 --------- --------- --------- Operating income (loss) $ 6,894 $ (838) $ 6,056 ========= ========= =========
Votainer's $.8 million loss was mainly attributable to a $.7 million loss in Votainer's United States operations, which comprised approximately 35.0% of Votainer's revenues. Revenues from airfreight operations for the first quarter 1994 increased $ 29.3 million or 19.1% compared to the first quarter of 1993 to $182.7 million. The increase in airfreight revenues was attributable to a 10.3% increase in shipments and a 26.0% increase in the total weight of cargo shipped. Gross profit (revenue less transportation expense) from airfreight operations for the first quarter of 1994 increased $5.1 million or 10.1% when compared to the first quarter of 1993, to $55.7 million. The higher gross profit was attributable to the increase in shipment and weight volumes. When compared to the first quarter of 1993, airfreight gross margin (gross profit as a percent of revenues) declined 2.5% to 30.5% in the first quarter of 1994 due to the effects of the Company's customers shipping significantly more weight which resulted in lower selling prices per unit of weight, and competitive pricing pressures. Page 8 Internal operating expenses (terminal, selling and general and administrative) increased 10.2 million or 22.7% over the first quarter of 1993 due to the inclusion of 6.1 million of expenses from the ocean freight operations of Votainer and a 4.1 million or 9% increase in airfreight internal operating expenses. Internal operating expenses attributable to airfreight operations as a percentage of revenues for the first quarter 1994, were 26.7% compared to 29.2% for the same period of 1993. Operating income for the first quarter 1994, (inclusive of an $.8 million loss from ocean operations), increased 3% to $6.1 million. Interest expense for the first quarter of 1994 increased marginally over the comparable period in 1993. The effective income tax rate for the first quarter 1994 compared to the first quarter 1993 was unchanged. Liquidity and Capital Resources - - ------------------------------- At March 31, 1994, the Company's working capital increased to $83 million from $80.8 million at December 31, 1993. This increase was primarily provided by operations. Capital expenditures for the three months ended March 31, 1994 were $2.3 million compared to $1.4 million for the first three months of 1993. This increase is due to the initial construction costs for the Company's new warehouse and distribution facility in Singapore. This facility is scheduled for completion in December, 1994 at a cost of approximately $10.0 million, which will be partially financed by a $6.5 million mortgage loan. At March 31, 1994, the Company had available for future borrowings the full amount of its $20.0 million revolving credit facility. Additionally, the Company's foreign subsidiaries have approximately $10.5 million available under various overdraft facilities with foreign banks. Page 9 PART II - OTHER INFORMATION Item 1. Legal Proceedings ----------------- The Company believes that there are no legal proceedings, other than ordinary routine litigation incidental to the business of the Company, to which the Company or any of its subsidiaries is a party. Management is of the opinion that the ultimate outcome of existing legal proceedings, if adverse, would not have a material effect on the Company's consolidated financial position. Item 2. Changes in Securities. ---------------------- Not Applicable. Item 3. Default Upon Senior Securities. ------------------------------- Not Applicable. Item 4. Submission of Matter to a Vote of Security Holders. --------------------------------------------------- Not Applicable. Item 5. Other Information. ------------------ Not Applicable. Item 6. Exhibits and Reports on Form 8-K -------------------------------- a) Computation of Earnings Per common Share - Exhibit 11 Page 10 SIGNATURES 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 thereunto duly authorized. Air Express International Corporation ------------------------------------- (Registrant) Date: May 10, 1994 /s/ Dennis M. Dolan ------------------------------------- Dennis M. Dolan Vice President and Chief Financial Officer (Principal Financial Officer) Date: May 10, 1994 /s/ Walter L. McMaster ------------------------------------- Walter L. McMaster Vice President - Controller (Principal Accounting Officer) Exhibit 11
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited) (In thousands, except per share amounts) Three Months Ended March 31, ------------------------- 1994 1993 --------- --------- Primary: Net income applicable to common shares $ 3,482 $ 3,452 ========= ========= Weighted average of common shares outstanding 11,558 11,573 Common shares issuable on exercise of stock options 115 160 --------- --------- * Average common shares outstanding standing as adjusted 11,673 11,733 ========= ========= Earnings per common share $ .30 $ .29 ========= ========= Fully diluted: Weighted average of common shares outstanding 11,558 11,573 Common shares issuable on exercise of stock options 137 160 Common shares issuable upon assumed conversion of subordinated debentures 2,194 1,462 --------- --------- * Average common shares out- standing as adjusted 13,889 13,196 ========= ========= Earnings per common share $ .30 $ .29 ========= ========= * Primary earnings per share are computed by dividing net income by the weighted average common and common equivalent shares outstanding during the period. For the quarters ended March 31, 1994 and 1993, fully diluted earnings per share have been calculated assuming the conversion of the subordinated debentures and the elimination of the associated interest expense, net of tax, of approximately $.73 million and $.49 million, respectively.
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