-----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, NL+EKQCyX7eR4PRMPgWOgWHfxJNCIVOyMP95iD0Lb2VWBUhV5EHbjb6IZ1m9gHHL ieRU+K+nPCNNV1jLLGKYKA== 0000700674-97-000007.txt : 19970814 0000700674-97-000007.hdr.sgml : 19970814 ACCESSION NUMBER: 0000700674-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 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: 97659198 BUSINESS ADDRESS: STREET 1: 120 TOKENEKE RD PO 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 2ND QUARTER 1997-10-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, 1997 Commission file number: 1-8306 AIR EXPRESS INTERNATIONAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-2074327 (State or Other 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 11, 1997 was 34,456,606 (Net of 122,517 Treasury Shares). AIR EXPRESS INTERNATIONAL CORPORATION June 1997 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, 1997 and December 31, 1996.......................... 2 Condensed Consolidated Statements of Operations - three months and six months ended June 30, 1997 and 1996..................................................... 3 Consolidated Statements of Cash Flows - six months ended June 30, 1997 and 1996...................... 4 Notes to Condensed Consolidated Financial Statements................................................... 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................. 8 Part II - Other Information Item 1. Legal Proceedings............................................... 11 Item 6. Exhibits and Reports on Form 8-K................................ 11 Page 2 AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) June 30, 1997 Dec 31, 1996 (Unaudited) Assets Current Assets: Cash and cash equivalents ......................... $ 51,037 $ 46,516 Accounts receivable, (less allowance for doubtful accounts of $4,480 and $4,721) .......... 339,163 346,323 Other current assets .............................. 7,463 6,295 Total current assets ........................ 397,663 399,134 Investment in unconsolidated affiliates .............. 18,470 13,991 Property, plant and equipment (less accumulated depreciation and amortization of $55,681 and $53,455) ........................................ 59,393 61,112 Deposits and other assets ............................ 16,608 15,226 Goodwill (less accumulated amortization of $11,484 and $10,673) ............................. 87,014 91,866 Total assets ................................ $ 579,148 $ 581,329 Liabilities and stockholders' investment Current Liabilities: Current portion of long-term debt ................. $ 2,809 $ 3,915 Bank overdrafts payable ........................... 1,437 2,058 Transportation payables ........................... 166,234 166,686 Accounts payable .................................. 44,633 50,201 Accrued liabilities ............................... 57,180 61,347 Income taxes payable .............................. 9,990 14,691 Total current liabilities ................... 282,283 298,898 Long-term debt .................................... 15,204 16,616 Other liabilities ................................. 6,540 6,729 Total liabilities ........................... 304,027 322,243 Stockholders' Investment: Capital stock- Preferred (authorized 1,000,000 shares, none outstanding) ................................ -- -- Common, $.01 par value (authorized 40,000,000 shares, issued 34,380,278 and 34,179,512 shares .. 344 342 Capital surplus ................................... 139,036 137,060 Cumulative translation adjustments ................ (19,839) (15,633) Retained earnings ................................. 156,486 137,989 276,027 259,758 Less: 51,027 and 40,958 shares of treasury stock, at cost ....................................... (906) (672) Total stockholders' investment .................... 275,121 259,086 Total liabilities and stockholders' investment .... $ 579,148 $ 581,329
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, 1997 1996 1997 1996 Revenues ..................... $ 386,591 $ 320,660 $ 737,746 $ 615,447 Operating expenses: Transportation ............. 264,325 214,926 503,049 416,571 Terminal ................... 64,387 55,479 128,513 108,141 Selling, general and administrative ............ 38,468 34,577 74,486 64,954 Operating profit ............. 19,411 15,678 31,698 25,781 Other income (expense): Interest, net .............. 270 (828) 478 (1,815) Other, net ................. 1,074 1,066 2,352 2,027 1,344 238 2,830 212 Income before provision for income taxes ............ 20,755 15,916 34,528 25,993 Provision for income taxes ... 7,713 6,207 12,947 10,137 Net income ................... $ 13,042 $ 9,709 $ 21,581 $ 15,856 Income per common share: Primary .................. $ .37 $ .33 $ .62 $ .53 Fully diluted ............ $ .37 $ .30 $ .61 $ .50 Weighted average number of common shares (000's): Primary .................. 35,058 29,805 34,952 29,612 Fully diluted ............ 35,177 34,653 35,116 34,616
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, 1997 AND 1996 (Dollars in thousands) 1997 1996 Cash flows from operating activities: Net income ........................................ $ 21,581 $ 15,856 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization .................. 6,170 4,676 Amortization of goodwill ....................... 1,296 1,163 Amortization of bond discount .................. -- 115 Deferred income taxes .......................... 538 635 Equity in earnings of unconsolidated affiliates ................................... (1,614) (508) Losses (gains) on sales of assets .............. 34 (100) Changes in assets and liabilities, net of business acquisitions: (Increase) in accounts receivable, net .......... (2,708) (3,407) (Increase) in other current assets .............. (978) (825) (Increase) in other assets ...................... (1,887) (428) Increase (decrease) in transportation payables ...................................... 3,378 (15,928) (Decrease) in accounts payable .................. (2,370) (3,459) (Decrease) increase in accrued liabilities ...... (2,894) 667 (Decrease) increase in income taxes payable ..... (3,319) 2,832 (Decrease) increase in other liabilities ........ (18) 104 Total adjustments .......................... (4,372) (14,463) Net cash provided by operating activities ..... 17,209 1,393 Cash flows from investing activities: Business acquisitions, net of cash acquired ..... -- (6,282) Other investing activities ...................... 387 (330) Proceeds from sales of assets ................... 300 272 Capital expenditures ............................ (6,382) (4,633) Investment in unconsolidated affiliates ......... (3,596) (71) Net cash used in investing activities ......... (9,291) (11,044) Cash flows from financing activities: Net (repayments) borrowings in bank overdrafts payable .......................................... (425) 468 Payment of long-term debt ......................... (959) (1,387) Issuance of common stock .......................... 1,978 977 Payment of cash dividends ......................... (2,732) (1,859) Purchase of treasury stock ........................ (234) (14) Net cash used by financing activities ......... (2,372) (1,815) Effect of foreign currency exchange rates on cash ..... (1,025) (627) Net increase (decrease) in cash and cash equivalents .. 4,521 (12,093) Cash and cash equivalents at beginning of period ...... 46,516 54,463 Cash and cash equivalents at end of period ............ $ 51,037 $ 42,370
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, 1997, the consolidated statements of operations for the three-month and six-month periods ended June 30, 1997 and 1996, and the consolidated statements of cash flows for the six-month periods ended June 30, 1997 and 1996 were 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 were made. Certain items in the June 30, 1996 financial statements were reclassified to conform to the classification of June 30, 1997 financial statements. Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, were 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, 1996. Statements included herein which are not historical facts are forward-looking statements. These statements are based upon information available to the Company on the date hereof. Inherent in these statements are a variety of risks and other factors, both known and unknown, which may cause the Company's actual results to differ materially from those in forward-looking statements. Accordingly, the realization of forward-looking statements is not certain, and all such statements should be evaluated based upon the applicable risks and uncertainties affecting the Company. Consequently, the results of operations for the three and six month periods ended June 30, 1997 are not necessarily indicative of the results of operations expected for the full year ending December 31, 1997. B. Interest, net was as follows: Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 Interest expense ....... $(396) $(1,503) $ (779) $(3,012) Interest income ........ 666 675 1,257 1,197 $ 270 $ (828) $ 478 $(1,815)
C. Other, net was as follows: Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 Equity in earnings of unconsolidated affiliates ... $ 905 $ 615 $1,617 $1,180 Foreign exchange gains ....... 230 374 769 747 Other ........................ (61) 77 (34) 100 $1,074 $1,066 $2,352 $2,027
Page 6 D. Supplemental disclosures of cash flow information: Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 Interest and income taxes paid: Interest ............... $ 287 $ 176 $ 551 $ 2,560 Income taxes ........... 9,626 3,599 14,444 6,122 $ 9,913 $ 3,775 $14,995 $ 8,682
Non cash investing and financing activities: In June 1996, as a result of conversions of the 6.0% Convertible Subordinated Debentures ("Debentures"), the Company issued 469,688 shares of Common Stock valued at approximately $7.1 million. E. Common Stock Split: On June 19, 1997, the Company's Board of Directors declared a three-for-two split of the Company's Common Stock, payable in the form of a stock dividend. The additional shares will be distributed on July 25, 1997 to shareholders of record on July 11, 1997. Accordingly, all share and per share information throughout the consolidated financial statements have been restated to reflect this split. F. Subsequent Event: The Company entered into a ground lease agreement dated July 1, 1997 with the Port Authority of New York/New Jersey in conjunction with a lease development agreement entered into with the New York City Industrial Development Agency for the construction of a 135,000 square foot air cargo facility terminal building at John F. Kennedy International Airport. The Company will finance the development in part through the issuance of tax-exempt New York City Industrial Development Agency Special Facility Revenue Bonds (1997 Air Express International Corporation Project), Series 1997, in aggregate principal amount of $19.0 million due July 1, 2024 (the "Series 1997 Bonds"). Interest shall initially be payable at a weekly rate set by the Remarketing Agent using the minimum rate necessary (as determined by the Remarketing Agent based on the examination of tax-exempt obligations comparable to the Series 1997 Bonds known by the Remarketing Agent to have been priced or traded under then-prevailing market conditions) for the Remarketing Agent to sell the Series 1997 Bonds on the effective date of such weekly rate at a price equal to 100% of their principal amount (without regard to accrued interest). The Company may from time to time change the method of determining the interest rate on the Series 1997 Bonds to a daily, weekly, commercial paper or long-term interest rate. If Page 7 the appropriate interest rate is not or cannot be determined for whatever reason, the method of determining interest on the Series 1997 Bonds shall be equal to the Public Securities Association Municipal Index or such other weekly high-grade index comprised of seven-day, tax-exempt variable rate demand notes produced by Municipal Market Data, Inc. In no event shall the interest rate on the Series 1997 Bonds exceed the maximum annual interest rate of 15.0%. The Series 1997 Bonds are fully secured by an irrevocable direct-pay letter of credit issued by a U.S. Bank with a termination date of July 16, 2002. The Company is obligated to reimburse the U.S. Bank for amounts drawn under the letter of credit in accordance with a reimbursement agreement between the Company and the U.S. Bank (the "Reimbursement Agreement"). The Series 1997 Bonds may be redeemed in whole or in part at the direction of the Company. Among the various covenants contained in the Reimbursement Agreement, the Company is to maintain certain ratios and balances as to minimum stockholders' investment, debt to stockholders' investment and fixed charge coverage. The Company is in compliance with all conditions of the Reimbursement Agreement. Page 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The Company considers its total business to represent a single segment comprised of three major services: airfreight forwarding, ocean freight forwarding, and customs brokerage and other services, all of which are fully integrated. The following table sets forth the gross revenues and net revenues (gross revenues minus transportation expenses) for each of these three service categories, as well as the Company's internal operating expenses (terminal and selling, general and administrative expenses) and operating profit: Three Months Six Months Ended June 30, Ended June 30, 1997 1996 1997 1996 Gross Revenues: Airfreight ............................... $296.6 $244.4 $569.2 $476.0 Ocean freight ............................ 53.5 49.2 97.8 89.4 Customs brokerage and other .............. 36.5 27.1 70.7 50.0 Total Gross Revenues ................... $386.6 $320.7 $737.7 $615.4 Net Revenues: Airfreight ............................... $ 77.0 $ 67.4 $146.4 $129.6 Ocean freight ............................ 15.3 14.2 28.5 24.5 Customs brokerage and other .............. 30.0 24.1 59.8 44.8 Total Net Revenues ..................... 122.3 105.7 234.7 198.9 Internal Operating Expenses: Terminal ................................. 64.4 55.5 128.5 108.1 Selling, general and administrative ...... 38.5 34.5 74.5 65.0 Total Internal Operating Expenses ...... 102.9 90.0 203.0 173.1 Operating Profit ........................... $ 19.4 $ 15.7 $ 31.7 $ 25.8
Consolidated gross revenues for the second quarter and six months ended June 30, 1997 increased 20.5% to $386.6 million and 19.9% to $737.7 million, respectively, over the comparable periods in 1996. Additionally, the increase in gross revenues for the quarter and six months included the negative effect of approximately $6.3 million and $10.8 million, respectively, resulting from a stronger U.S. dollar when converting foreign currency revenues into U.S. dollars for financial reporting purposes. Consolidated net revenues for the second quarter and first six months of 1997 increased 15.7% to $122.3 million and 18.0% to $234.7 million, respectively, over the comparable 1996 periods. Gross airfreight revenues for the second quarter and first six months of 1997 increased 21.4% to $296.6 million and 19.6% to $569.2 million, respectively, over the comparable 1996 periods. Airfreight net revenues for the second quarter and first six months of 1997 increased 14.2% to $77.0 million and 13.0% to $146.4 million, respectively, over the comparable 1996 periods. The increases in gross and net revenues from airfreight services for both the Page 9 quarter and six months were attributable to increases in shipments and the total weight of cargo shipped. For the quarter, shipments increased 17.7% and the weight of cargo shipped increased 21.7% over the second quarter of 1996. For the six month period, shipments increased 13.4% and the weight of cargo shipped increased 19.3% over the first six months of 1996. The gross margin (net revenues as a percentage of gross revenues) for the second quarter and first six months of 1997 decreased 1.6% from 27.6% to 26.0% and 1.5% from 27.2% to 25.7%, respectively, when compared to the comparable 1996 periods. The decreases were mainly due to reduced yields associated with the increases in the weight of cargo shipped. Ocean freight gross revenues for the second quarter and first six months of 1997 increased 8.7% to $53.5 million and 9.4% to $97.8 million, respectively, over the comparable 1996 periods. Ocean freight net revenues for the second quarter and first six months of 1997 increased 7.7% to $15.3 million and 16.3% to $28.5 million, respectively, over the comparable 1996 periods. The increase in both the gross and net ocean freight revenues was due to increased shipping volumes from existing customers and the Company's continuing penetration into the ocean freight market. Customs brokerage and other gross revenues for both the second quarter and first six months of 1997 increased 34.7% to $36.5 million and 41.4% to $70.7 million, respectively, over the comparable 1996 periods. Customs brokerage and other net revenues for the second quarter and first six months of 1997 increased 24.5% to $30.0 million and 33.5% to $59.8 million, respectively, over the comparable 1996 periods. The increase in both the gross and net customs brokerage and other revenues was mainly attributable to the Company's continuing efforts to expand its customs brokerage activities to existing and new customers. Internal operating expenses increased $12.9 million or 14.3% for the second quarter and $29.9 million or 17.3% for the first six months of 1997 over the comparable periods in 1996. These increases were mainly attributable to the additional expenses incurred in connection with greater shipping volumes. Operating profit for the second quarter of 1997 increased $3.7 million or 23.6% over the second quarter of 1996. For the first six months of 1997, operating profit increased $5.9 million or 22.9% over the comparable 1996 period. Interest expense for the second quarter and first six months of 1997 decreased approximately $1.1 million and $2.2 million, respectively, when compared to the comparable 1996 periods due primarily to the elimination of interest expense associated with the Debentures which were converted on or before July 8, 1996. The effective income tax rates for the second quarter and the first six months of 1997 decreased to 37.2% and 37.5%, respectively, when compared to 39.0% for the comparable 1996 periods. The decreases were largely the result of Page 10 a shift in the mix of worldwide earnings to countries with lower effective income tax rates, along with a reduction in the total of nondeductible expenses as a percentage of pre-tax income. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128 "Earnings Per Share" (FASB 128), which establishes standards for computing and presenting earnings per share. FASB 128 will be effective for periods ending after December 15, 1997. Adoption of this accounting standard is not expected to have a material impact upon the Company's earnings per share computations assuming the current capital structure. Liquidity and Capital Resources At June 30, 1997, cash and cash equivalents increased approximately $4.5 million to $51.0 million from $46.5 million at December 31, 1996. For the first six months of 1997, the Company's primary source of cash was approximately $17.2 million from operating activities, while its primary uses were for: capital expenditures of $6.4 million, investment in unconsolidated affiliates of $3.6 million and dividend payments of $2.7 million. Cash flow provided by operating activities increased approximately $15.8 million over the first six months of 1996. This increase was impacted by the on-going integration of prior years' acquisitions which has resulted in improvements in the management of working capital. Working capital increased approximately $15.1 million in the six months to $115.4 million. The increase was mainly due to the increase in profits. Capital expenditures increased approximately $1.8 million from $4.6 million for the six months of 1996 to $6.4 million for the six months of 1997. The $6.4 million of capital expenditures was primarily for improvement and expansion of facilities and management information services. At June 30, 1997, the Company had available for future borrowings approximately $71.8 million of its $75.0 million revolving credit facility. The Company utilized approximately $3.2 million under this facility mainly for letters of credit issued in connection with its insurance programs. Additionally, various of the Company's foreign subsidiaries maintained overdraft facilities with foreign banks, aggregating approximately $18.6 million, of which approximately $1.4 million was outstanding. In July 1997, with the issuance of the Industrial Development Revenue Bonds (See Note F), the Company's long-term debt will increase $19.0 million and correspondingly its debt to equity ratio (total long-term debt as a percentage of stockholders' investment) will increase from 6.5% at June 30, 1997 to approximately 13.0%. In June 1997, the Company's Board of Directors authorized an increase in the quarterly cash dividend from four cents ($.04) to five cents ($.05) per share. Page 11 Management believes that the Company's available cash and sources of credit, together with expected future sources of credit and cash generated from operations, will be sufficient to satisfy its anticipated needs for working capital, capital expenditures and dividends. 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 6. - Exhibits and Reports on Form 8-K a) Exhibits: Exhibit 10 - Employment Agreement Exhibit 11 - Computation of Earnings Per Common Share. Exhibit 27 - Financial Data Schedule. b) Reports on Form 8-K: None. Page 12 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 13, 1997 /s/ Dennis M. Dolan Dennis M. Dolan Vice President and Chief Financial Officer (Principal Financial Officer) Date: August 13, 1997 /s/ Walter L. McMaster Walter L. McMaster Vice President - Controller (Principal Accounting Officer) EX-10 2 EMPLOYMENT AGREEMENT Exhibit 10 EMPLOYMENT AGREEMENT Agreement made as of July 1, 1997, by and between AIR EXPRESS INTERNATIONAL CORPORATION, a Delaware corporation with its offices at 120 Tokeneke Road, Darien, Connecticut 06820 ("AEI") and HENDRIK J. HARTONG, JR. of Two Soundview Drive, Greenwich, Connecticut 06830 ("HJH"). The parties agree as follows: 1. That HJH is hereby employed by AEI as the Chairman of the Board of Directors of AEI to: * Serve as Chairman of the Meetings of the Board of Directors of AEI. * Serve as Chairman of the Meetings of the Shareholders of AEI. * Serve as Chairman of the Executive Committee of the Board of Directors of AEI. In addition, HJH shall provide such evaluation and due diligence of acquisition candidates and investor relations services as shall be requested by the Chief Executive Officer of AEI. 2. This Agreement shall commence on July 1, 1997 and end on June 30, 2002. The Agreement may be terminated at any time by the Board of Directors of AEI or by mutual agreement of HJH and the Board of Directors of AEI. In either event, on termination of this Agreement, HJH will be paid a sum equal to the annual salary payable by AEI to HJH hereunder for the remaining term of this Agreement. 3. If there is a "change in control" of AEI, as is defined in this Agreement, either party will have the right to terminate this Agreement at any time after the change in control, and in the event of such termination, HJH will be paid a sum equal to the annual salary payable by AEI to HJH hereunder for the remaining term of this Agreement. "Change in control" is defined to have occurred when: a) more than 40 percent of AEI's outstanding common stock (or the equivalent in voting power of any class or classes of outstanding securities of AEI ordinarily entitled to vote in the election of directors) shall be beneficially held or acquired by any corporation or person or group; or (b) there is a sale or other disposition of all or substantially all of the assets or business of AEI. Page 1 of 2 4. HJH will receive an annual salary of $150,000.00 and shall be eligible to participate in the AEI medical/dental/life insurance and 401(k) benefit plans. 5. AEI will continue to provide life insurance coverage to HJH under General American Life Insurance Policy Number 6127139 during the term of this Agreement. 6. This Agreement shall be governed by the laws of the State of Connecticut and constitutes the only agreement between the parties relating to the employment of HJH by AEI, and supersedes and terminates all previous consulting, employment and severance agreements between HJH and AEI. AIR EXPRESS INTERNATIONAL CORPORATION Attest: By: ________________________________________ Guenter Rohrmann, President ______________________________ and Chief Executive Officer Daniel J. McCauley, Secretary ________________________________________ HENDRIK J. HARTONG, JR. Page 2 of 2 EX-11 3 COMPUTE 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, 1997 1996 1997 1996 Primary: Net income applicable to common shares .................... $13,042 $ 9,709 $21,581 $15,856 Weighted average of common shares outstanding ............... 34,283 29,154 34,235 29,072 Common share equivalents ........... 775 651 717 540 Average common shares out- standing ......................... 35,058 29,805 34,952 29,612 Earnings per common share .......... $ .37 $ .33 $ .62 $ .53 Fully diluted: Weighted average of common shares outstanding ............... 34,283 29,154 34,235 29,072 Common share equivalents ........... 894 678 881 673 Common shares issuable upon assumed conversion of subor- dinated debentures ............... -- 4,821 -- 4,871 Average common shares outstanding ...................... 35,177 34,653 35,116 34,616 Earnings per common share .......... .37 .30 .61 .50 Primary earnings per share was computed by dividing net income by the weighted average common and common share equivalents outstanding during the period. For the quarter and six months ended June 30, 1996, fully diluted earnings per share was calculated assuming the conversion of the Debentures and the elimination of the associated interest expense, net of tax, of approximately $.73 million and $1.46 million, respectively. Effective July 8, 1996, the Company completed the redemption for all of its Debentures. Therefore, the Debentures and related interest expense were not a component of the Company's fully diluted earnings per share calculation for the quarter and six months ended June 30, 1997.
EX-27 4
5 1000 6-MOS DEC-31-1997 JUN-30-1997 51,037 0 343,643 4,480 0 397,663 115,074 55,681 579,148 282,283 15,204 344 0 0 295,522 579,148 0 737,746 0 503,049 128,513 599 779 34,528 12,947 21,581 0 0 0 21,581 .62 .61
-----END PRIVACY-ENHANCED MESSAGE-----