Washington | 000-13468 | 91-1069248 | ||
(State or other jurisdiction of | (Commission File No.) | (IRS Employer Identification Number) | ||
incorporation or organization) | ||||
1015 Third Avenue, 12th Floor, Seattle, Washington | 98104 | |||
(Address of principal executive offices) | (Zip Code) | |||
(206) 674-3400 | ||||
(Registrant's telephone number, including area code) | ||||
N/A | ||||
(Former name or former address, if changed since last report) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
May 3, 2016 | /S/ Bradley S. Powell | |
Bradley S. Powell, Senior Vice President and Chief Financial Officer | ||
Jeffrey S. Musser | Bradley S. Powell Geoffrey Buscher |
• | Diluted Net Earnings Attributable to Shareholders per share decreased 4% to $0.53 |
• | Net Earnings Attributable to Shareholders decreased 9% to $97 million |
• | Operating Income decreased 10% to $152 million |
• | Net Revenues2 decreased 2% to $517 million while yields expanded 489 basis points to 36.5% |
• | Airfreight tonnage volume decreased 9% and ocean container volume decreased 3% |
• | Revenues decreased 15% to $1.4 billion |
Three months ended March 31, | ||||||||||
2016 | 2015 | % Change | ||||||||
Revenues | $ | 1,418,472 | $ | 1,677,526 | (15)% | |||||
Net revenues1 | $ | 517,069 | $ | 529,486 | (2)% | |||||
Operating income | $ | 151,826 | $ | 168,883 | (10)% | |||||
Net earnings attributable to shareholders | $ | 96,584 | $ | 106,704 | (9)% | |||||
Diluted earnings attributable to shareholders per share | $ | 0.53 | $ | 0.55 | (4)% | |||||
Basic earnings attributable to shareholders per share | $ | 0.53 | $ | 0.56 | (5)% | |||||
Diluted weighted average shares outstanding | 183,018 | 192,707 | ||||||||
Basic weighted average shares outstanding | 182,010 | 191,628 |
Employee headcount as of March 31, | |||||
2016 | 2015 | ||||
North America | 5,652 | 5,399 | |||
Europe | 2,731 | 2,552 | |||
North Asia | 2,457 | 2,476 | |||
Middle East, Africa and India | 1,479 | 1,369 | |||
South Asia | 1,327 | 1,289 | |||
Latin America | 775 | 784 | |||
Information Systems | 765 | 705 | |||
Corporate | 332 | 308 | |||
Total | 15,518 | 14,882 |
Year-over-year percentage increase (decrease) in: | ||||||
Airfreight kilos | Ocean freight FEU | |||||
2016 | ||||||
January | (9 | )% | (2 | )% | ||
February | (12 | )% | (15 | )% | ||
March | (7 | )% | 8 | % | ||
Quarter | (9 | )% | (3 | )% |
March 31, 2016 | December 31, 2015 | ||||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 1,013,917 | $ | 807,796 | |||
Accounts receivable, net | 1,010,667 | 1,112,260 | |||||
Deferred Federal and state income taxes | 18,203 | 16,861 | |||||
Other current assets | 44,693 | 56,453 | |||||
Total current assets | 2,087,480 | 1,993,370 | |||||
Property and equipment, net | 526,941 | 524,724 | |||||
Goodwill | 7,927 | 7,927 | |||||
Other assets, net | 57,395 | 56,417 | |||||
$ | 2,679,743 | $ | 2,582,438 | ||||
Liabilities and Equity | |||||||
Current Liabilities: | |||||||
Accounts payable | 623,699 | 645,304 | |||||
Accrued expenses, primarily salaries and related costs | 202,284 | 186,571 | |||||
Federal, state and foreign income taxes | 28,432 | 29,498 | |||||
Total current liabilities | 854,415 | 861,373 | |||||
Deferred Federal and state income taxes | 42,817 | 26,389 | |||||
Commitments and contingencies | |||||||
Shareholders’ Equity: | |||||||
Preferred stock; none issued | — | — | |||||
Common stock, par value $0.01 per share. Issued and outstanding 181,562 shares at March 31, 2016 and 182,067 shares at December 31, 2015 | 1,816 | 1,821 | |||||
Additional paid-in capital | 3,851 | 31 | |||||
Retained earnings | 1,845,356 | 1,771,379 | |||||
Accumulated other comprehensive loss | (71,772 | ) | (81,238 | ) | |||
Total shareholders’ equity | 1,779,251 | 1,691,993 | |||||
Noncontrolling interest | 3,260 | 2,683 | |||||
Total equity | 1,782,511 | 1,694,676 | |||||
$ | 2,679,743 | $ | 2,582,438 |
03-May-2016 | Expeditors International of Washington, Inc. | Page 3 of 7 |
Three months ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Revenues: | |||||||
Airfreight services | $ | 560,853 | $ | 707,444 | |||
Ocean freight and ocean services | 454,192 | 565,717 | |||||
Customs brokerage and other services | 403,427 | 404,365 | |||||
Total revenues | 1,418,472 | 1,677,526 | |||||
Operating Expenses: | |||||||
Airfreight services | 388,777 | 513,001 | |||||
Ocean freight and ocean services | 323,020 | 445,456 | |||||
Customs brokerage and other services | 189,606 | 189,583 | |||||
Salaries and related costs | 283,355 | 278,878 | |||||
Rent and occupancy costs | 26,859 | 25,388 | |||||
Depreciation and amortization | 11,329 | 11,529 | |||||
Selling and promotion | 9,432 | 9,247 | |||||
Other | 34,268 | 35,561 | |||||
Total operating expenses | 1,266,646 | 1,508,643 | |||||
Operating income | 151,826 | 168,883 | |||||
Other Income (Expense): | |||||||
Interest income | 2,779 | 2,732 | |||||
Other, net | 879 | 34 | |||||
Other income, net | 3,658 | 2,766 | |||||
Earnings before income taxes | 155,484 | 171,649 | |||||
Income tax expense | 58,437 | 64,317 | |||||
Net earnings | 97,047 | 107,332 | |||||
Less net earnings attributable to the noncontrolling interest | 463 | 628 | |||||
Net earnings attributable to shareholders | $ | 96,584 | $ | 106,704 | |||
Diluted earnings attributable to shareholders per share | $ | 0.53 | $ | 0.55 | |||
Basic earnings attributable to shareholders per share | $ | 0.53 | $ | 0.56 | |||
Weighted average diluted shares outstanding | 183,018 | 192,707 | |||||
Weighted average basic shares outstanding | 182,010 | 191,628 |
03-May-2016 | Expeditors International of Washington, Inc. | Page 4 of 7 |
Three months ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Operating Activities: | |||||||
Net earnings | $ | 97,047 | $ | 107,332 | |||
Adjustments to reconcile net earnings to net cash from operating activities: | |||||||
Provision for losses on accounts receivable | 578 | 277 | |||||
Deferred income tax expense | 9,896 | 11,937 | |||||
Excess tax benefits from stock plans | — | (1,480 | ) | ||||
Stock compensation expense | 10,831 | 9,907 | |||||
Depreciation and amortization | 11,329 | 11,529 | |||||
Other | 36 | 86 | |||||
Changes in operating assets and liabilities: | |||||||
Decrease (increase) in accounts receivable | 112,710 | (46,790 | ) | ||||
(Decrease) increase in accounts payable and accrued expenses | (15,344 | ) | 14,895 | ||||
Increase in income taxes payable, net | 10,925 | 23,132 | |||||
(Increase) decrease in other current assets | (2,055 | ) | 3,569 | ||||
Net cash from operating activities | 235,953 | 134,394 | |||||
Investing Activities: | |||||||
(Increase) decrease in short-term investments, net | (35 | ) | 40,274 | ||||
Purchase of property and equipment | (14,035 | ) | (9,445 | ) | |||
Other, net | (524 | ) | 198 | ||||
Net cash from investing activities | (14,594 | ) | 31,027 | ||||
Financing Activities: | |||||||
Proceeds from issuance of common stock | 41,635 | 35,048 | |||||
Repurchases of common stock | (70,292 | ) | (77,368 | ) | |||
Excess tax benefits from stock plans | — | 1,480 | |||||
Distribution to noncontrolling interest | — | (857 | ) | ||||
Net cash from financing activities | (28,657 | ) | (41,697 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 13,419 | (17,687 | ) | ||||
Increase in cash and cash equivalents | 206,121 | 106,037 | |||||
Cash and cash equivalents at beginning of period | 807,796 | 927,107 | |||||
Cash and cash equivalents at end of period | $ | 1,013,917 | $ | 1,033,144 | |||
Taxes paid: | |||||||
Income taxes | $ | 37,984 | $ | 28,261 |
03-May-2016 | Expeditors International of Washington, Inc. | Page 5 of 7 |
UNITED STATES | OTHER NORTH AMERICA | LATIN AMERICA | NORTH ASIA | SOUTH ASIA | EUROPE | MIDDLE EAST, AFRICA and INDIA | ELIMI- NATIONS | CONSOLI- DATED | |||||||||||||||||||
Three months ended March 31, 2016: | |||||||||||||||||||||||||||
Revenues from unaffiliated customers | $ | 407,826 | 52,106 | 20,064 | 497,232 | 136,418 | 221,897 | 82,929 | — | 1,418,472 | |||||||||||||||||
Transfers between geographic areas | 26,034 | 2,700 | 3,601 | 5,096 | 5,806 | 10,361 | 5,394 | (58,992 | ) | — | |||||||||||||||||
Total revenues | $ | 433,860 | 54,806 | 23,665 | 502,328 | 142,224 | 232,258 | 88,323 | (58,992 | ) | 1,418,472 | ||||||||||||||||
Net revenues | $ | 220,698 | 27,378 | 13,733 | 110,791 | 39,518 | 74,541 | 30,407 | 3 | 517,069 | |||||||||||||||||
Operating income | $ | 48,205 | 7,291 | 3,852 | 55,218 | 15,691 | 12,253 | 9,313 | 3 | 151,826 | |||||||||||||||||
Identifiable assets | $ | 1,255,099 | 119,258 | 56,334 | 455,973 | 133,940 | 438,711 | 216,576 | 3,852 | 2,679,743 | |||||||||||||||||
Capital expenditures | $ | 8,137 | 311 | 485 | 1,085 | 655 | 2,119 | 1,243 | — | 14,035 | |||||||||||||||||
Depreciation and amortization | $ | 7,332 | 364 | 253 | 1,319 | 512 | 1,098 | 451 | — | 11,329 | |||||||||||||||||
Equity | $ | 978,426 | 79,312 | 37,325 | 300,188 | 115,606 | 167,726 | 137,112 | (33,184 | ) | 1,782,511 | ||||||||||||||||
Three months ended March 31, 2015: | |||||||||||||||||||||||||||
Revenues from unaffiliated customers | $ | 444,181 | 54,794 | 24,081 | 645,444 | 181,381 | 242,086 | 85,559 | — | 1,677,526 | |||||||||||||||||
Transfers between geographic areas | 27,675 | 2,814 | 4,777 | 5,697 | 5,915 | 9,637 | 5,067 | (61,582 | ) | — | |||||||||||||||||
Total revenues | $ | 471,856 | 57,608 | 28,858 | 651,141 | 187,296 | 251,723 | 90,626 | (61,582 | ) | 1,677,526 | ||||||||||||||||
Net revenues | $ | 219,603 | 30,678 | 16,559 | 117,405 | 42,200 | 75,888 | 27,153 | — | 529,486 | |||||||||||||||||
Operating income | $ | 59,181 | 11,091 | 5,356 | 57,056 | 13,880 | 15,071 | 7,248 | — | 168,883 | |||||||||||||||||
Identifiable assets | $ | 1,451,103 | 109,180 | 57,232 | 541,983 | 143,910 | 430,338 | 198,954 | 11,078 | 2,943,778 | |||||||||||||||||
Capital expenditures | $ | 6,325 | 288 | 617 | 290 | 319 | 1,148 | 458 | — | 9,445 | |||||||||||||||||
Depreciation and amortization | $ | 7,393 | 292 | 268 | 1,399 | 530 | 1,246 | 401 | — | 11,529 | |||||||||||||||||
Equity | $ | 1,182,808 | 58,998 | 34,604 | 306,775 | 106,139 | 154,343 | 120,086 | (36,222 | ) | 1,927,531 |
03-May-2016 | Expeditors International of Washington, Inc. | Page 6 of 7 |
Three months ended | |||||||
March 31, | |||||||
(in thousands) | 2016 | 2015 | |||||
Total revenues | $ | 1,418,472 | $ | 1,677,526 | |||
Expenses: | |||||||
Airfreight services | 388,777 | 513,001 | |||||
Ocean freight and ocean services | 323,020 | 445,456 | |||||
Customs brokerage and other services | 189,606 | 189,583 | |||||
Net revenues | $ | 517,069 | $ | 529,486 |
03-May-2016 | Expeditors International of Washington, Inc. | Page 7 of 7 |
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