-----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, AqY2/SfPc7nLq7ypX2gR6WWQfLFFwyIBMWCEMOHKwq1EkJ56HnIdiTqSb6SBjXtJ orOucwI9zKo0/X0rn1IoMQ== 0000700674-94-000006.txt : 19940819 0000700674-94-000006.hdr.sgml : 19940819 ACCESSION NUMBER: 0000700674-94-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940811 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: 94543083 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 SECOND 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 June 30, 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 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 August 10, 1994 was 11,603,674. (Net of 2,183,208 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 June 30, 1994 and December 31, 1993...................... 2 Condensed Consolidated Statements of Operations - three months and six months ended June 30, 1994 and 1993.................................................. 3 Consolidated Statements of Cash Flows - six months ended June 30, 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) June 30, 1994 December 31, 1993 ------------- ----------------- (Unaudited) Assets Current Assets: Cash and cash equivalents $ 41,017 $ 55,063 Short-term investments 25,090 10,109 Accounts receivable, (less allowance for doubtful accounts of $3,258 and $2,846) 161,083 150,969 Other current assets 3,674 3,224 ---------- ---------- Total current assets 230,864 219,365 Investment in unconsolidated affiliates 8,081 7,595 Property, plant and equipment (less accumulated depreciation and amortization of $36,434 and $34,096) 33,161 27,323 Deposits and other assets 5,349 4,604 Goodwill (less accumulated amortization of $5,513 and $4,674) 42,000 37,331 ---------- ---------- Total assets $ 319,455 $ 296,218 ========== ========== LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Current portion of long-term debt $ 1,610 $ 1,509 Bank overdrafts payable 1,705 594 Transportation payables 75,605 69,640 Accounts payable 27,090 27,967 Accrued liabilities 33,977 28,250 Income taxes payable 10,695 10,587 ---------- ---------- Total current liabilities 150,682 138,547 Long-term debt 80,457 78,464 Deferred income taxes 1,334 1,088 ---------- ---------- Total liabilities 232,473 218,099 Stockholders' Investment: Capital stock - Preferred (authorized 1,000,000 shares, none outstanding) - - Common, $.01 par value (authorized 40,000,000 shares, issued 13,785,601 and 13,711,333 shares) 137 137 Capital surplus 41,742 41,251 Cumulative translation adjustments (11,934) (12,282) Retained earnings 97,013 88,657 ---------- ---------- 126,958 117,763 Less: 2,183,208 and 2,167,773 shares of treasury stock, at cost (39,976) (39,644) ---------- ---------- Total stockholders' investment 86,982 78,119 ---------- ---------- Total liabilities and stockholders' investment $ 319,455 $ 296,218 ========== ==========
The accompanying notes are an integral part of these financial statements. Page 3
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, -------------------------- -------------------------- 1994 1993 1994 1993 ---------- ---------- ---------- ---------- Revenues $ 237,999 $ 168,516 $ 442,809 $ 321,860 Operating expenses: Transportation 167,140 112,596 311,024 215,355 Terminal 36,667 28,387 70,129 55,410 Selling, general and administrative 23,975 18,037 45,383 35,722 ---------- ---------- ---------- ---------- Operating income 10,217 9,496 16,273 15,373 Other income (expense): Interest expense, net (793) (918) (1,712) (1,731) Other, net 565 (83) 972 332 ---------- ---------- ---------- ---------- (228) (1,001) (740) (1,399) ---------- ---------- ---------- ---------- Income before provision for income taxes 9,989 8,495 15,533 13,974 Provision for income taxes 3,840 3,144 5,902 5,171 ---------- ---------- ---------- ---------- Net income $ 6,149 $ 5,351 $ 9,631 $ 8,803 ========== ========== ========== ========== Income per common share Primary $ .53 $ .46 $ .82 $ .75 ========== ========== ========== ========== Fully diluted $ .49 $ .44 $ .80 $ .74 ========== ========== ========== ========== Weighted average number of common shares (000): Primary 11,709 11,712 11,685 11,721 ========== ========== ========== ========== Fully diluted 13,909 13,906 13,894 13,550 ========== ========== ========== ==========
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 SIX MONTHS ENDED JUNE 30, 1994 AND 1993 (Unaudited) (Dollars in thousands) 1994 1993 ---------- ---------- Cash flows from operating activities: Net income $ 9,631 $ 8,803 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,811 2,563 Amortization of goodwill 605 571 Deferred income taxes (141) - Undistributed (earnings) losses of affiliates (357) (35) Gain on sales of assets, net (12) (155) Other, net (2,830) 753 Changes in assets and liabilities: Decrease (increase) in accounts receivable, net (5,197) 16,529 Decrease (increase) in other current assets (404) 663 Increase (decrease) in transportation payables 4,529 (3,965) Increase (decrease) in accounts payable (3,082) (10,035) Increase (decrease) in accrued liabilities 2,534 (5,338) Increase (decrease) in income taxes payable 77 2,349 ---------- ---------- Total adjustments (1,467) 3,900 ---------- ---------- Net cash provided by operating activities 8,164 12,703 Cash flows from investing activities: Business Acquisitions, net of cash acquired (3,946) - Purchase of short-term investments (14,981) (59,221) Gains (losses) from hedging activities (572) (91) Proceeds from sales of assets 189 264 Capital expenditures (4,504) (2,541) Investment in unconsolidated affiliates - (20) ---------- ---------- Net cash used in investing activities (23,814) (61,609) Cash flows from financing activities: Net borrowings (repayments) under revolving credit agreement - (5,000) Net borrowings (repayments) in bank overdrafts payable 973 (1,911) Additions to long-term debt 1,631 72,486 Payment of long-term debt (771) (566) Issuance of common stock 491 255 Payment of cash dividends (1,156) (807) Purchase of treasury stock (332) (1,355) ---------- ---------- Net cash (used) provided in financing activities 836 63,102 Effect of foreign currency exchange rates on cash 768 (1,408) ---------- ---------- Net increase (decrease) in cash and cash equivalents (14,046) 12,788 Cash and cash equivalents at beginning of period 55,063 14,113 ---------- ---------- Cash and cash equivalents at end of period $ 41,017 $ 26,901 ========== ==========
The accompanying notes are an integral part of these financial statements. Page 5 AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS A. The consolidated balance sheet at June 30, 1994, the consolidated statements of operations for the three-month and six-month periods ended June 30, 1994 and 1993, and the consolidated statements of cash flows for the six-month periods ended June 30, 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 June 30, 1993 financial statements have been reclassified to conform to the classification of June 30, 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 three and six month periods ended June 30, 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 profits of $361,000 and $411,000, respectively, for the quarter and six months ended June 30, 1994, compared with profits of $83,000 and $96,000, for the quarter and six months ended June 30, 1993. C. Interest expense, net is as follows:
Three Months Ended Six Months Ended June 30, June 30, -------------------------- -------------------------- 1994 1993 1994 1993 ---------- ---------- --------- ---------- Interest expense $ (1,420) $ (1,616) $ (2,840) $ (2,904) Interest income 627 698 1,128 1,173 ---------- ---------- --------- ---------- Interest expense, net $ (793) $ (918) $ (1,712) $ (1,731) ========== ========== ========= ==========
Page 6 D. Other income (expense) is as follows:
Three Months Ended Six Months Ended June 30, June 30, -------------------------- -------------------------- 1994 1993 1994 1993 ---------- ---------- --------- ---------- Foreign exchange gains, net $ 572 $ (218) $ 960 $ 177 Other, net (7) 135 12 155 ---------- ---------- --------- ---------- $ 565 $ (83) $ 972 $ 332 ========== ========== ========= ==========
E. Statement of cash flows - interest and income taxes paid:
Three Months Ended Six Months Ended June 30, June 30, -------------------------- -------------------------- 1994 1993 1994 1993 ---------- ---------- --------- ---------- Interest $ 155 $ 398 $ 2,572 $ 687 Income taxes 2,984 1,663 6,049 3,669 ---------- ---------- --------- ---------- $ 3,139 $ 2,061 $ 8,621 $ 4,356 ========== ========== ========= ==========
F. Acquisitions: During the second quarter of 1994, the Company acquired both Unimodal Australia Pty. Ltd. (Unimodal), an ocean freight forwarder based in Australia, and Banner International Ltd. (Banner), an airfreight forwarder located in New Zealand, for approximately $6.5 million in cash. The acquisitions have been accounted for as purchases; the cost of which has been allocated on the basis of the estimated fair market value of the assets acquired and the liabilities assumed. This allocation resulted in goodwill of approximately $4.0 million. The results of operations for these companies are included in the consolidated statement of income from the acquisition dates forward. G. Subsequent Event: On July 15, 1994, the Company acquired Pace Express Pty. Ltd. (Pace), from senior management. Pace is a leading airfreight forwarder in Australia with offices in seven cities with 160 employees. Pace was profitable in 1993 with gross revenues of approximately $25.0 million. The acquisition will be accounted for as a purchase. 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 second quarter and six months ended June 30, 1994 are the results from the ocean freight activities of Votainer, which was acquired by the Company on July 1, 1993. The results of the airfreight and ocean freight activities for the 1994 periods are:
Six Months Second Quarter 1994 Ended June 30, 1994 -------------------------------------------- -------------------------------------------- Air Ocean Air Ocean Freight Freight Total Freight Freight Total --------- --------- --------- --------- --------- --------- Revenues $ 212,150 $ 25,849 $ 237,999 $ 394,806 $ 48,003 $ 442,809 Expense: Transportation 147,171 19,969 167,140 274,143 36,881 311,024 Terminal 32,951 3,716 36,667 62,785 7,344 70,129 Selling, general and administrative 21,296 2,679 23,975 40,252 5,131 45,383 --------- --------- --------- --------- --------- --------- Operating income (loss) $ 10,732 $ (515) $ 10,217 $ 17,626 $ (1,353) $ 16,273 ========= ========= ========= ========= ========= =========
Votainer's $1.3 million loss was mainly attributable to a $1.4 loss in Votainer's United States operations, which comprised approximately 33.0% of Votainer's revenues. Revenues for the second quarter and the six months ended June 30, 1994 increased 41.2% to $238.0 and 37.6% to $442.9, respectively, over the comparable periods in 1993. Airfreight revenues for the second quarter and the six months increased 25.9% to $212.2 and 22.7% to $394.8, respectively. The increase in airfreight revenues for both the quarter and six months was due to increases in shipments and the total weight of cargo shipped. For the quarter, shipments increased 10.6% and the weight of cargo shipped 29.0% over the second quarter of 1993. For the six month period, shipments increased 10.3% and the weight of cargo shipped increased 26.4% over the first six months of 1993. Gross profit (revenues less transportation expense) from airfreight operations for the second quarter of 1994 increased $9.0 million or 16.2% over the comparable 1993 period to $64.9. For the six months, gross profit increased $14.2 million or 13.3% over the comparable 1993 period to $120.7. The higher gross profit for both the quarter and six month periods was attributable to increases in both shipments and total weight of cargo shipped. The gross margin (gross profit as a percent of revenues) decreased approximately 2.6% for the quarter and six months when compared to the comparable periods in 1993. This decrease is due to 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 $14.2 million or 30.6% for the quarter and $24.4 million or 26.8% for the six month period from the comparable periods in 1993. These increases were mainly attributable to the inclusion of the internal operating expenses for Votainer and several smaller acquisitions which were acquired by the Company subsequent to June 30,1993. As a percentage of revenues, internal operating expenses were 25.5% for the quarter and 26.0% for the six months in 1994 as compared to 27.5% and 28.3%, respectively, for the comparable periods in 1993. The improvement in both periods resulted from the greater efficiencies associated with the increase in shipments and shipment weights. Interest expense for the second quarter and the first six months of 1994 was marginally lower than the comparable periods in 1993. The effective income tax rate for the quarter and six months ended June 30, 1994 was 38.4% and 38.0% respectively, an increase of 1.4% and 1.0% over the second quarter and first six months of 1993. The higher effective tax rate was due to losses incurred in certain of the Company's foreign subsidiaries where there was no tax credit available and a 1.0% increase in the United States federal statutory tax rate. Liquidity and Capital Resources - - ------------------------------- As of June 30, 1994, the Company's working capital decreased marginally to $80.2 million from $80.8 million at December 31, 1993. Capital expenditures for the six months ended June 30, 1994 were $4.5 million compared to $2.5 million for the first six months of 1993. This increase is due primarily to the 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 June 30, 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: August 11, 1994 /s/ Dennis M. Dolan ------------------------------------- Dennis M. Dolan Vice President and Chief Financial Officer (Principal Financial Officer) Date: August 11, 1994 /s/ Walter L. McMaster ------------------------------------- Walter L. McMaster Vice President - Controller (Principal Accounting Officer) EX-11 2 COMPUTATION OF EARNINGS PER COMMON SHARE Exhibit 11
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited) (In thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, -------------------------- -------------------------- 1994 1993 1994 1993 ---------- ---------- ---------- ---------- Primary: Net income applicable to common shares $ 6,149 $ 5,351 $ 9,631 $ 8,803 ========== ========== ========== ========== Weighted average of common shares outstanding 11,584 11,568 11,571 11,569 Common shares issuable on exercise of stock options 125 144 114 152 ---------- ---------- ---------- ---------- Average common shares outstanding 11,709 11,712 11,685 11,721 ========== ========== ========== ========== Earnings per common share $ .53 $ .46 $ .82 $ .75 ========== ========== ========== ========== Fully diluted: Weighted average of common shares outstanding 11,584 11,568 11,571 11,569 Common shares issuable on exercise of stock options 131 144 129 152 Common shares issuable upon assumed conversion of subordinated debentures 2,194 2,194 2,194 1,829 ---------- ---------- ---------- ---------- Average common shares outstanding 13,909 13,906 13,894 13,550 ========== ========== ========== ========== Earnings per common share $ .49 $ .44 $ .80 $ .74 ========== ========== ========== ========== Primary earnings per share are computed by dividing net income by the weighted average common and common equivalent shares outstanding during the period. 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. For the quarters ended June 30, 1994 and 1993, the interest elimination was $.73 million and $.78 million, respectively. For the six months ended June 30, 1994 and 1993, the interest elimination was $1.46 million and $1.28 million, respectively.
EX-27 3
5 1000 6-MOS DEC-31-1994 JUN-30-1994 41,017 25,090 164,341 3,258 0 230,864 69,595 36,434 319,455 150,682 80,457 137 0 0 86,845 319,455 0 442,809 0 311,024 70,129 490 2,840 15,533 5,902 9,631 0 0 0 9,631 .82 .80
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