-----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, MRDpFSo3MXGVOML+Zvmj11RXyvN/nUATuPHvAyTC8gUyyWjIy+IHOcJDGvPrfE2M vI1yPfkSs1N5nQlLNVRa4A== 0000700674-95-000002.txt : 19950512 0000700674-95-000002.hdr.sgml : 19950512 ACCESSION NUMBER: 0000700674-95-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIR EXPRESS INTERNATIONAL CORP /DE/ CENTRAL INDEX KEY: 0000700674 STANDARD INDUSTRIAL CLASSIFICATION: ARRANGEMENT OF TRANSPORTATION OF FREIGHT & CARGO [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: 95536907 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 1ST QUARTER 1995 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, 1995 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 May 10, 1995 was 17,496,548. (Net of 2,189,330 Treasury Shares) AIR EXPRESS INTERNATIONAL CORPORATION March 1995 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, 1995 and December 31, 1994......................2 Condensed Consolidated Statements of Operations - three months ended March 31, 1995 and 1994.................3 Consolidated Statements of Cash Flows - three months ended March 31, 1995 and 1994.................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, December 31, 1995 1994 (Unaudited) Assets Current Assets: Cash and cash equivalents ...................... $ 41,384 $ 44,168 Accounts receivable, (less allowance for doubtful accounts of $3,161 and $3,290) ....... 207,586 206,012 Other current assets ........................... 3,724 2,938 Total current assets ........................ 252,694 253,118 Investment in unconsolidated affiliates .......... 10,031 9,370 Marketable securities ............................ 19,961 19,961 Property, plant and equipment (less accumulated depreciation and amortization of $39,737 and $37,057) ......................... 45,184 39,599 Deposits and other assets ........................ 6,783 6,957 Goodwill (less accumulated amortization of $6,878 and $6,403) ......................... 54,239 51,929 Total assets ................................ $ 388,892 $ 380,934 LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Current portion of long-term debt .............. $ 2,518 $ 2,029 Bank overdrafts payable ........................ 1,228 1,399 Transportation payables ........................ 98,051 101,657 Accounts payable ............................... 38,384 34,087 Accrued liabilities ............................ 42,261 43,988 Income taxes payable ........................... 11,696 10,991 Total current liabilities ................... 194,138 194,151 Long-term debt ................................. 86,278 83,992 Other liabilities .............................. 3,390 3,441 Total liabilities ........................... 283,806 281,584 Stockholders' Investment: Capital stock- Preferred (authorized 1,000,000 shares, none outstanding) ............................. -- -- Common, $.01 par value (authorized 40,000,000 shares, issued 19,670,527 and 19,620,526 shares) ........................ 197 196 Capital surplus ................................ 42,431 41,998 Cumulative translation adjustments ............. (10,480) (11,442) Retained earnings .............................. 113,013 108,600 145,161 139,352 Less: 2,187,833 and 2,184,208 shares of treasury stock, at cost ..................... (40,075) (40,002) Total stockholders' investment ................. 105,086 99,350 Total liabilities and stockholders' investment .................................... $ 388,892 $ 380,934
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 March 31, 1995 1994 Revenues ........................................... $ 284,073 $ 204,810 Operating expenses: Transporation ..................................... 203,259 143,884 Terminal .......................................... 43,627 33,462 Selling, general and administrative ............... 28,602 21,408 Operating income ................................... 8,585 6,056 Other income (expense): Interest expense, net ............................. (667) (919) Other, net ...................................... 386 407 (281) (512) Income before provision for income taxes ........... 8,304 5,544 Provision for income taxes ......................... 3,191 2,062 Net income ......................................... $ 5,113 $ 3,482 Income per common share: Primary ......................................... $ .29 $ .20 Fully diluted ................................... $ .28 $ .20 Weighted average number of common shares (000): Primary ......................................... 17,833 17,510 Fully diluted ................................... 21,204 20,834
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, 1995 AND 1994 (Dollars in thousands) 1995 1994 Cash flows from operating activities: Net income ........................................... $ 5,113 $ 3,482 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ...................... 1,641 1,333 Amortization of goodwill ........................... 419 301 Deferred income taxes .............................. 30 (351) Undistributed (earnings) losses of affiliates ...... 4 (50) (Gains) losses on sales of assets, net ............. (69) (19) Other, net ......................................... 522 380 Changes in assets and liabilities: Decrease (increase) in accounts receivable, net .... 3,909 3,256 Decrease (increase) in other current assets ........ (611) (248) Increase (decrease) in transportation payables ..... (6,256) (1,931) Increase (decrease) in accounts payable ............ 695 (1,347) Increase (decrease) in accrued liabilities ......... (3,704) 1,023 Increase (decrease) in income taxes payable ........ 582 (498) Increase (decrease) in other liabilities ........... (117) -- Total adjustments ................................. (2,955) 1,849 Net cash provided by operating activities .......... 2,158 5,331 Cash flows from investing activities: Business acquisitions, net of cash acquired .......... 22 -- Gains (losses) from hedging activities ............... (522) (105) Proceeds from sales of assets ........................ 167 38 Capital expenditures ................................. (6,850) (2,328) Investment in affiliates ............................. (196) -- Net cash used in investing activities .............. (7,379) (2,395) Cash flows from financing activities: Net borrowings (repayments) in bank overdrafts payable ............................................. (340) 816 Additions to long-term debt .......................... 3,119 722 Payment of long-term debt ............................ (610) (312) Issuance of common stock ............................. 434 242 Payment of cash dividends ............................ (698) (577) Purchase of treasury stock ........................... (73) (217) Net cash provided by financing activities .......... 1,832 674 Effect of foreign currency exchange rates on cash ...... 605 318 Net increase (decrease) in cash and cash equivalents ... (2,784) 3,928 Cash and cash equivalents at beginning of period ....... 44,168 55,063 Cash and cash equivalents at end of period ............. $ 41,384 $ 58,991
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 March 31, 1995, the consolidated statements of operations for the three-month periods ended March 31, 1995 and 1994, and the consolidated statements of cash flows for the three-month periods ended March 31, 1995 and 1994 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, 1994 financial statements have been reclassified to conform to the classification of March 31, 1995. 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, 1994. The results of operations for the period ended March 31, 1995 are not necessarily indicative of the results of operations expected for the full year ending December 31, 1995. B. Investments in equity affiliates are recorded using the equity method. Consolidated net income reflects joint venture profit of $124,000 for the quarter ended March 31, 1995, compared with a profit of $50,000 for the quarter ended March 31, 1994. C. Interest expense, net is as follows:
Three Months Ended March 31, 1995 1994 Interest expense ......................... $(1,450) $(1,420) Interest income .......................... 783 501 Interest expense, net .................... $ (667) $ (919)
Page 6 D. Other income (expense) is as follows:
Three Months Ended March 31, 1995 1994 Foreign exchange gains, net ...................... $317 $388 Other, net ....................................... 69 19 $386 $407
E. Statement of cash flows - interest and income taxes paid:
Three Months Ended March 31, 1995 1994 Interest ................................. $2,437 $2,417 Income Taxes ............................. 2,856 3,065 $5,293 $5,482
F. Subsequent Event: On May 3, 1995, the Company signed an agreement for the acquisition of Radix Group, Inc. ("Radix"). Radix is one of the leading companies in providing customs brokerage services in the United States with a network of 23 U.S. offices. Additionally, it provides airfreight and ocean freight forwarding services. For its fiscal year ended July 31, 1994, Radix's gross revenues were approximately $65 million. AEI will acquire 100% of the outstanding stock of Radix for a maximum of one million shares of AEI common stock. This transaction will be accounted for as a purchase. The closing of this acquisition is scheduled for on or about June 10, 1995 pending Hart-Scott- Rodino clearance and approval of a majority of Radix's shareholders. Page 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The following table shows the consolidated revenues and gross profit attributable to the Company's airfreight and ocean freight activities and the Company's expenses for the quarters ended March 31, 1995 and 1994. Revenues from customs brokerage and other related services are included in airfreight revenues. Gross profit is determined by deducting transportation expenses from revenues.
Three Months Ended March 31, 1995 1994 Increase Revenues: Airfreight ........................ $250,353 $182,656 $ 67,697 Ocean Freight ..................... 33,720 22,154 11,566 Total .......................... $284,073 $204,810 $ 79,263 Gross Profit: Airfreight ........................ $ 72,503 $ 55,684 $ 16,819 Ocean Freight ..................... 8,311 5,242 3,069 Total .......................... $ 80,814 $ 60,926 $ 19,888 Expenses: Terminal ....................... $ 43,627 $ 33,462 $ 10,165 Selling, general and administrative ............ 28,602 21,408 7,194 Total .......................... $ 72,229 $ 54,870 $ 17,359 Operating Profit .................. $ 8,585 $ 6,056 $ 2,529
Consolidated revenues for the first quarter of 1995 increased $79.3 million or 38.7% to $284.1 million when compared to the first quarter of 1994. Airfreight revenues for the first quarter of 1995 increased $67.7 million or 37.1% to $250.4 million when compared to the first quarter of 1994. The increase in airfreight revenues was attributable to a 11.2% increase in shipments and a 33.0% increase in the total weight of cargo shipped. Revenues from ocean freight operations for the first quarter of 1995 increased $11.6 million or 52.2% to $33.7 million when compared to the first quarter of 1994, due to increased shipping volumes. The higher shipping volumes were attributable to increased economic activity and the inclusion of shipping volumes of companies acquired subsequent to the first quarter of 1994. Gross profit (revenues less transportation expense) for the first quarter of 1995 increased $19.9 million or 32.6% to $80.8 million when compared to the first quarter of 1994. Gross margin (gross profit as a percentage of revenues) decreased 1.3% to 28.4% in the first quarter of 1995 compared to 29.7% in the first quarter of 1994. The decrease in gross margin was largely due to the impact of greater weight per shipment which resulted in lower selling prices per unit of weight, and competitive pricing pressures. Gross profit from airfreight operations for the first quarter of 1995 increased $16.8 million or 30.2% to $72.5 million when compared to the first quarter of 1994. Gross profit from ocean freight operations for the first quarter of 1995 increased $3.1 million or 58.5% to $8.3 million when compared to the first quarter of 1994. The higher gross profit for both airfreight and ocean freight operations was attributable to increased shipping volumes. Page 8 Internal operating expenses (terminal, selling and general and administrative) for the first quarter of 1995 increased $17.4 million or 31.6% over the first quarter of 1994. This increase was due largely to additional expenses incurred in connection with greater shipping volumes and to the inclusion of expenses of companies acquired subsequent to the first quarter of 1994. As a percentage of revenues, internal operating expenses for the first quarter of 1995 decreased to 25.4% compared to 26.8% for the first quarter of 1994. The decrease was largely attributable to the greater efficiencies associated with the increased shipping volumes. Interest expense, net for the first quarter of 1995 decreased approximately $.3 million compared to the first quarter of 1994. The decrease was the result of the higher rate of interest earned by the Company on its invested funds. The effective income tax rate for the first quarter of 1995 was 38.5% compared to 37.2% for the first quarter of 1994. The 1.3% increase was mainly due to the losses incurred by certain foreign subsidiaries for which there were no tax benefits available. Liquidity and Capital Resources At March 31, 1995, the Company's working capital decreased marginally to $58.6 million from $59.0 million at December 31, 1994. Capital expenditures for the three months ended March 31, 1995 were $6.9 million compared to $2.3 million for the first three months of 1994. This increase was mainly due to the construction costs for the Company's new warehouse and distribution facility in Singapore. This facility is scheduled for completion during the second quarter of 1995. Capital expenditures for 1995 are anticipated to be approximately $15.0 million. At March 31, 1995, the Company had available for future borrowings approximately $18.9 million of its $20.0 million revolving credit facility. The Company utilized approximately $1.1 million under this facility for letters of credit issued in connection with its insurance programs. Additionally, the Company's foreign subsidiaries maintained approximately $13.5 million of overdraft facilities with various foreign banks of which $1.3 million was utilized. Management believes that the Company's available cash and sources of credit, together with expected future cash generated from operations, will be sufficient to satisfy its anticipated needs for working capital, capital expenditures, and future business acquisitions. 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. 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 11, 1995 /s/ Dennis M. Dolan Dennis M. Dolan Vice President and Chief Financial Officer (Principal Financial Officer) Date: May 11, 1995 /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 March 31, 1995 1994 Primary: Net income applicable to common shares $ 5,113 $ 3,482 Weighted average of common shares outstanding 17,458 17,337 Common shares issuable on exercise of stock options 375 173 Average common shares outstanding 17,833 17,510 Earnings per common share $ .29 $ .20 Fully diluted: Weighted average of common shares outstanding 17,458 17,337 Common shares issuable on exercise of stock options 455 206 Common shares issuable upon assumed conversion of subordinated debentures 3,291 3,291 Average common shares outstanding 21,204 20,834 Earnings per common share $ .28 $ .20 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, 1995 and 1994, 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.
EX-27 3
5 1000 3-MOS DEC-31-1995 MAR-31-1995 41,384 0 210,747 3,161 0 252,694 84,921 39,737 388,892 194,138 86,278 197 0 0 155,444 388,892 0 284,073 0 203,259 43,627 193 1,450 8,304 3,191 5,113 0 0 0 5,113 .29 .28
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