Expeditors Reports Second Quarter 2013 EPS of $.45 Per Share 1

Expeditors Reports Second Quarter 2013 EPS of $.45 Per Share1

SEATTLE--(BUSINESS WIRE)-- Expeditors International of Washington, Inc. (NAS: EXPD) today announced net earnings attributable to shareholders of $92,315,000 for the second quarter of 2013, as compared with $83,955,000for the same quarter of 2012, an increase of 10%. Net revenues2 for the second quarter of 2013 increased 3% to $469,101,000 as compared with $453,651,000 for the same quarter in 2012. Total revenues and operating income were $1,500,453,000 and $143,579,000in the second quarter of 2013, as compared with $1,504,952,000 and $132,403,000 for the same quarter of 2012, a marginal decrease and an increase of 8%, respectively. Diluted net earnings attributable to shareholders per share for the second quarter were $.45, as compared with $.39 for the same quarter in 2012, an increase of 15%.

For the six months ended June 30, 2013, net earnings attributable to shareholders was $172,630,000, as compared with $160,662,000 in 2012, an increase of 7%. Net revenues for the six months increased to $914,385,000 from $900,222,000 for 2012, up 2%. Total revenues and operating income for the six months were $2,910,938,000 and $272,097,000 in 2013, as compared with $2,916,322,000 and $257,674,000 for the same period in 2012, a marginal decrease and an increase of 6%, respectively. Diluted net earnings attributable to shareholders per share for the first two quarters of 2013 were $.83, as compared with $.75 for the same period of 2012, an increase of 11%.


"These results are very significant to us and we continue to be encouraged by our progress. The beginning signs of improvement we noticed during our 2013 first quarter, picked up during the second quarter," said Peter J. Rose, Chairman and Chief Executive Officer. "While the global economy is still slowly emerging from the fundamental problems that have held it in thrall over the last five years, and slowly is the operative word, we've selectively grown market share this quarter. Our airfreight volumes were up again, for the third straight quarter, by 5%. Ocean FEU count on a yearly quarter-over-quarter basis was up 2%, as was our order management activity. The volatility of the pricing environment continues to require focused attention to both the buy and sell elements of the air and ocean marketplace. We think these results prove we did a good job of that during the second quarter," Rose went on to say.

"Moving successfully through difficult times without having those difficult times move through us requires commitment to and confidence in the power of our culture and faith in our people and their knowledge and ability to execute in the markets we deal in," Rose continued. "It takes discipline and integrity to win short-term market share battles without losing the long-term profitability wars that successful companies are built upon and which creates long-term shareholder value. Many businesses struggle with executing that strategic trade-off. Fortunately for us, our people, who are the core and cause of our success, have admirably demonstrated that they have ample amounts of both. We're grateful for their efforts and we're grateful to our customers, and our shareholders, who both benefit from the aligned efforts of our people," Rose concluded.

Expeditors is a global logistics company headquartered in Seattle, Washington. The company employs trained professionals in 188 full-service offices and numerous satellite locations located on six continents linked into a seamless worldwide network through an integrated information management system. Services include the consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, domestic time definite transportation services, purchase order management and customized logistics solutions.

1 Diluted earnings attributable to shareholders per share.

2 Non-GAAP measure calculated as revenues less directly related operating expenses attributable to the Company's principal services. See reconciliation on the last page of this release.

NOTE: See Disclaimer on Forward-Looking Statements on the following page of this release.

 
Expeditors International of Washington, Inc.
Second Quarter 2013 Earnings Release, August 6, 2013
 
Financial Highlights for the Three and Six months ended June 30, 2013 and 2012 (Unaudited)

(in 000's of US dollars except share data)

 
   Three months ended June 30,   Six months ended June 30,  
  %  %
20132012Change20132012Change
Revenues$1,500,453$1,504,952

%

$

2,910,938

$2,916,322%
Net revenues1$469,101$453,6513%$914,385$900,2222%
Operating income$143,579$132,4038%$272,097$257,6746%
Net earnings attributable to shareholders$92,315$83,95510%$172,630$160,6627%
Diluted earnings attributable to shareholders$.45$.3915%$.83$.7511%
Basic earnings attributable to shareholders$.45$.4013%$.84$.7611%
Diluted weighted average shares outstanding207,192,534213,212,912207,421,805213,683,587
Basic weighted average shares outstanding206,444,464211,724,082206,459,701211,910,872
 

1 Non-GAAP measure calculated as revenues less directly related operating expenses attributable to the Company's principal services. See reconciliation on the last page of this release.

 
   
Employee headcount as of June 30,
2013  2012
North America4,7614,764
Asia Pacific3,8813,979
Europe and Africa2,3232,308
Middle East and India1,2131,249
Latin America679660
Information Systems628587
Corporate270243
Total13,75513,790
 
   
Year-over-year percentage increase in:
Airfreight kilos  Ocean freight FEU
2013
April9%2%
May7%—%
June1%3%
Quarter5%2%
 

Investors may submit written questions via e-mail to:investor@expeditors.com. Questions received by the end of business on August 9, 2013 will be considered in management's 8-K "Responses to Selected Questions" expected to be filed on or about August 23, 2013.

Disclaimer on Forward-Looking Statements:

Certain portions of this release contain forward-looking statements which are based on certain assumptions and expectations of future events that are subject to risks and uncertainties, including comments on recovery of global economy; ability to grow market share; ability to successfully manage volatile buy and sell rates; ability to execute and create long-term shareholder value. Actual future results and trends may differ materially from historical results or those projected in any forward-looking statements depending on a variety of factors including, but not limited to, our ability to maintain consistent and stable operating results, future success of our business model, ability to perpetuate profits, changes in customer demand for Expeditors' services caused by a general economic slow-down, customers' inventory build-up, decreased consumer confidence, volatility in equity markets, energy prices, political changes, foreign exchange rates, regulatory actions or changes or the unpredictable acts of competitors and other risks, risk factors and uncertainties detailed in our Annual Report as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission.

 
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
 
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
 
   June 30, 2013  December 31, 2012

Assets

Current Assets:
Cash and cash equivalents$1,286,109$1,260,842
Short-term investments89,902139
Accounts receivable, net1,018,3371,031,376
Deferred Federal and state income taxes11,99912,102
Other current assets69,431 53,140
Total current assets2,475,778 2,357,599
Property and equipment, net549,583556,204
Goodwill7,9277,927
Other assets, net30,377 32,395
$3,063,665 $2,954,125

Liabilities and Equity

Current Liabilities:
Accounts payable645,196641,593
Accrued expenses, primarily salaries and related costs196,789178,995
Federal, state and foreign income taxes18,228 21,970
Total current liabilities860,213 842,558
Deferred Federal and state income taxes81,51078,997
 
Commitments and contingencies
 
Shareholders' Equity:
Preferred stock; none issued
Common stock, par value $.01 per share; issued and outstanding 206,321,425 shares at June 30, 2013 and 206,392,013 shares at December 31, 20122,0632,064
Additional paid-in capital3,5341,283
Retained earnings2,129,3492,018,618
Accumulated other comprehensive (loss) income(15,105)5,734
Total shareholders' equity2,119,841 2,027,699
Noncontrolling interest2,101 4,871
Total equity2,121,942 2,032,570
$3,063,665 $2,954,125
 
 
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
 
Condensed Consolidated Statements of Earnings
(In thousands, except share data)
 
(Unaudited)
 
   Three months ended  Six months ended
June 30,June 30,
2013  20122013  2012
Revenues: 
Airfreight services$642,969$638,541$1,263,343$1,277,453
Ocean freight and ocean services492,007518,998937,486953,334
Customs brokerage and other services365,477347,413710,109685,535
Total revenues1,500,4531,504,9522,910,9382,916,322
Operating Expenses:
Airfreight services483,016484,311947,935965,354
Ocean freight and ocean services380,727413,447725,650745,401
Customs brokerage and other services167,609153,543322,968305,345
Salaries and related costs255,569249,925503,986496,057
Rent and occupancy costs22,13220,85343,78942,029
Depreciation and amortization11,6749,67022,95219,215
Selling and promotion8,3288,86015,58517,523
Other27,81931,94055,97667,724
Total operating expenses1,356,8741,372,5492,638,8412,658,648
Operating income143,579132,403272,097257,674
 
Interest income3,0703,0506,3136,410
Other, net4,3253,4605,8563,937
Other income, net7,3956,51012,16910,347
Earnings before income taxes150,974138,913284,266268,021
Income tax expense58,31154,892110,993107,278
Net earnings92,66384,021173,273160,743
Less net earnings attributable to the noncontrolling interest3486664381
Net earnings attributable to shareholders$92,315$83,955$172,630$160,662
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