SEATTLE, Nov. 07, 2017 (GLOBE NEWSWIRE) -- Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced third quarter 2017 financial results including the following highlights compared to the same quarter of 2016:
  • Diluted Net Earnings Attributable to Shareholders per share (EPS 1) increased 12% to $0.66
  • Net Earnings Attributable to Shareholders increased 12% to $120 million
  • Operating Income increased 12% to $187 million
  • Revenues increased 15% to $1.8 billion
  • Net Revenues 2 increased 10% to $599 million
  • Airfreight tonnage volume increased 12% and ocean container volume increased 4%

"This quarter represents the culmination of the efforts from our staff over the last few quarters," said Jeffrey S. Musser, President and Chief Executive Officer. "We've spent a significant amount of time working with our customers to bring pricing back in line with the changes that have taken place in the market. While accomplishing that task, our staff has also continued to provide the high level of service that our customers have come to expect from Expeditors. We remain extremely thankful for the exceptional employees and customers with whom we get to work each day.

"While our current focus has shifted somewhat from volume growth - due to the margin impacts that can occur - we continued to record strong performance in all of our services, winning new business and growing volumes with existing customers. We think the numbers speak for themselves with regards to the quality of volume growth that we are experiencing."

Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, "Despite the highly unpredictable rate environment, our people exercised careful restraint to bring our benchmark operating income as a percentage of net revenue back above 30% for the quarter, as compared to the first two quarters of 2017. We are managing expenses well, as our growth in volumes has significantly outpaced our growth in headcount. At the same time, we continue to make critical investments in our technology and create additional efficiencies for both ourselves and our customers."

Expeditors is a global logistics company headquartered in Seattle, Washington. The Company employs trained professionals in 177 district offices and numerous branch 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, time-definite transportation, order management, warehousing and distribution and customized logistics solutions.

_______________________ 1Diluted earnings attributable to shareholders per share. 2Non-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.
Third Quarter 2017 Earnings Release, November 7, 2017
Financial Highlights for the Three and Nine months ended September 30, 2017 and 2016 (Unaudited) 
(in 000's of US dollars except per share data)
               
  Three months ended September 30,       Nine months ended September 30,    
  2017   2016   % Change   2017   2016   % Change
Revenues $ 1,802,166     $ 1,562,394     15 %   $ 5,019,577     $ 4,456,030     13 %
Net revenues 1 $ 599,142     $ 545,259     10 %   $ 1,690,380     $ 1,615,445     5 %
Operating income $ 186,895     $ 167,263     12 %   $ 501,249     $ 497,953     1 %
Net earnings attributable to shareholders $ 120,263     $ 107,581     12 %   $ 322,378     $ 320,217     1 %
Diluted earnings attributable to shareholders per share $ 0.66     $ 0.59     12 %   $ 1.77     $ 1.75     1 %
Basic earnings attributable to shareholders per share $ 0.67     $ 0.59     14 %   $ 1.79     $ 1.76     2 %
Diluted weighted average shares outstanding 181,788     182,692         181,951     182,958      
Basic weighted average shares outstanding 179,416     181,177         179,827     181,645      

_______________________ 1Non-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.

During the three and nine-month periods ended September 30, 2017, we repurchased 3.6 million and 6.1 million shares of common stock at an average price of $56.18 and $55.93 per share, respectively. During the three and nine-month periods ended September 30, 2016, the Company repurchased 2.0 million and 5.4 million shares of common stock at an average price of $51.16 and $49.64 per share, respectively.
   
  Employee headcount as of September 30,
  2017   2016
North America 6,043     5,769  
Europe 3,013     2,846  
North Asia 2,548     2,498  
Middle East, Africa and India 1,503     1,494  
South Asia 1,495     1,364  
Latin America 800     758  
Information Systems 889     810  
Corporate 357     338  
Total 16,648     15,877  
           

     
    Year-over-year percentage increase in:
    Airfreight kilos   Ocean freight FEU
2017        
July   7%   6%
August   10%   2%
September   17%   3%
Quarter   12%   4%

_______________________ Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on November 10, 2017 will be considered in management's 8-K "Responses to Selected Questions" expected to be filed on or about November 20, 2017.

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 our ability to implement price adjustments, the quality of the volume growth that we are experiencing, the highly unpredictable rate environment, and our ability to manage expenses well. 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, the future success of our business model, our ability to maintain consistent and stable operating results, our ability to perpetuate profits, changes in customer demand for Expeditors' services caused by a general economic slow-down, changes in global trade volumes, customers' inventory build-up, decreased consumer confidence, geopolitical 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 per share data)(Unaudited)
 
  September 30, 2017   December 31, 2016
Assets      
Current Assets:      
Cash and cash equivalents $ 1,033,444     $ 974,435  
Accounts receivable, net 1,349,854     1,190,130  
Other current assets 135,623     54,014  
Total current assets 2,518,921     2,218,579  
Property and equipment, net 513,070     536,572  
Goodwill 7,927     7,927  
Other assets, net 28,963     27,793  
  $ 3,068,881     $ 2,790,871  
Liabilities and Equity      
Current Liabilities:      
Accounts payable $ 836,055     $ 726,571  
Accrued expenses, primarily salaries and related costs 216,146     185,502  
Federal, state and foreign income taxes 23,853     17,858  
Total current liabilities 1,076,054     929,931  
Deferred Federal and state income taxes 11,746     13,727  
       
Commitments and contingencies      
       
Shareholders' Equity:      
Preferred stock; none issued      
Common stock, par value $0.01 per share. Issued and outstanding 177,559 shares at September 30, 2017 and 179,857 shares at December 31, 2016 1,776     1,799  
Additional paid-in capital 1,464     2,642  
Retained earnings 2,053,723     1,944,789  
Accumulated other comprehensive loss (78,960 )   (104,592 )
Total shareholders' equity 1,978,003     1,844,638  
Noncontrolling interest 3,078     2,575  
Total equity 1,981,081     1,847,213  
  $ 3,068,881     $ 2,790,871  
               

 
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.AND SUBSIDIARIES
 
Condensed Consolidated Statements of Earnings(In thousands, except per share data)(Unaudited)
 
  Three months ended   Nine months ended
  September 30,   September 30,
  2017   2016   2017   2016
Revenues:              
Airfreight services $ 735,164     $ 621,566     $ 2,022,577     $ 1,764,512  
Ocean freight and ocean services 563,386     495,460     1,585,730     1,414,344  
Customs brokerage and other services 503,616     445,368     1,411,270     1,277,174  
Total revenues 1,802,166     1,562,394     5,019,577     4,456,030  
Operating Expenses:              
Airfreight services 547,595     444,359     1,490,417     1,236,555  
Ocean freight and ocean services 411,061     359,991     1,163,051     1,006,710  
Customs brokerage and other services 244,368     212,785     675,729     597,320  
Salaries and related costs 319,050     291,204     930,159     868,091  
Rent and occupancy costs 30,533     27,091     87,826     81,029  
Depreciation and amortization 12,272     11,882     36,241     34,853  
Selling and promotion 10,608     10,134     32,476     29,817  
Other 39,784     37,685     102,429     103,702  
Total operating expenses 1,615,271     1,395,131     4,518,328     3,958,077  
Operating income 186,895     167,263     501,249     497,953  
Other Income (Expense):              
Interest income 3,444     2,924     9,565     8,593  
Other, net 96     925     2,584     3,407  
Other income (expense), net 3,540     3,849     12,149     12,000  
Earnings before income taxes 190,435     171,112     513,398     509,953  
Income tax expense 69,829     63,163     190,470     188,518  
Net earnings 120,606     107,949     322,928     321,435  
Less net earnings attributable to the noncontrolling interest 343     368     550     1,218  
Net earnings attributable to shareholders $ 120,263     $ 107,581     $ 322,378     $ 320,217  
Diluted earnings attributable to shareholders per share $ 0.66     $ 0.59     $ 1.77     $ 1.75  
Basic earnings attributable to shareholders per share $ 0.67     $ 0.59     $ 1.79     $ 1.76  
Dividends declared and paid per common share $     $     $ 0.42     $ 0.40  
Weighted average diluted shares outstanding 181,788     182,692     181,951     182,958  
Weighted average basic shares outstanding 179,416     181,177     179,827     181,645  
                       

 
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.AND SUBSIDIARIES
 
Condensed Consolidated Statements of Cash Flows(In thousands)(Unaudited)
 
  Three months ended   Nine months ended
  September 30,   September 30,
  2017   2016   2017   2016
Operating Activities:              
Net earnings $ 120,606     $ 107,949     $ 322,928     $ 321,435  
Adjustments to reconcile net earnings to net cash from operating activities:              
Provision for losses on accounts receivable 1,741     1,321     3,187     2,461  
Deferred income tax (benefit) expense (28,854 )   (1,439 )   (16,000 )   2,342  
Stock compensation expense 11,210     10,476     39,036     34,264  
Depreciation and amortization 12,272     11,882     36,241     34,853  
Other, net 377     11     (148 )   41  
Changes in operating assets and liabilities:              
(Increase) decrease in accounts receivable (126,102 )   (58,279 )   (123,790 )   6,087  
Increase in accounts payable and accrued expenses 61,833     38,070     96,132     74,148  
Increase (decrease) in income taxes payable, net 38,149     7,197     10,814     (16,612 )
Increase in other current assets (5,872 )   (1,395 )   (6,147 )   (2,089 )
Net cash from operating activities 85,360     115,793     362,253     456,930  
Investing Activities:              
Purchase of property and equipment (34,462 )   (12,659 )   (67,603 )   (39,973 )
Other, net (261 )   1,617     (892 )   5,472  
Net cash from investing activities (34,723 )   (11,042 )   (68,495 )   (34,501 )
Financing Activities:              
Proceeds from issuance of common stock 65,915     57,522     162,781     147,645  
Repurchases of common stock (202,776 )   (101,690 )   (340,736 )   (268,097 )
Dividends paid         (75,726 )   (73,000 )
Net cash from financing activities (136,861 )   (44,168 )   (253,681 )   (193,452 )
Effect of exchange rate changes on cash and cash equivalents 4,758     1,853     18,932     5,927  
(Decrease) increase in cash and cash equivalents (81,466 )   62,436     59,009     234,904  
Cash and cash equivalents at beginning of period 1,114,910     980,264     974,435     807,796  
Cash and cash equivalents at end of period $ 1,033,444     $ 1,042,700     $ 1,033,444     $ 1,042,700  
Taxes paid:              
Income taxes $ 58,257     $ 58,696     $ 190,911     $ 205,049  
                               

 
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.AND SUBSIDIARIES
Business Segment Information(In thousands)(Unaudited)
                                   
  UNITED STATES   OTHER NORTH AMERICA   LATIN AMERICA   NORTH ASIA   SOUTH ASIA   EUROPE   MIDDLE EAST, AFRICA AND INDIA   ELIMI- NATIONS   CONSOLI- DATED
Three months ended September 30, 2017:                                  
Revenues from unaffiliated customers $ 476,575     65,544     24,181     686,915     170,225     273,606     105,120         1,802,166  
Transfers between geographic areas 26,888     2,782     3,679     5,253     5,681     10,302     5,318     (59,903 )    
Total revenues $ 503,463     68,326     27,860     692,168     175,906     283,908     110,438     (59,903 )   1,802,166  
Net revenues $ 257,030     30,664     14,710     138,667     41,411     85,390     29,956     1,314     599,142  
Operating income $ 74,645     9,215     2,652     72,070     11,697     11,124     5,495     (3 )   186,895  
Identifiable assets $ 1,636,293     100,651     52,238     446,826     143,893     473,509     212,210     3,261     3,068,881  
Capital expenditures $ 7,398     263     2,436     589     390     23,138     248         34,462  
Depreciation and amortization $ 7,905     405     310     1,313     569     1,309     461         12,272  
Equity $ 1,345,266     52,212     25,709     231,831     102,477     139,688     119,649     (35,751 )   1,981,081  
Three months ended September 30, 2016:                                  
Revenues from unaffiliated customers $ 423,362     56,747     21,592     590,622     154,156     228,256     87,659         1,562,394  
Transfers between geographic areas 24,610     2,770     3,724     5,368     6,206     9,938     5,551     (58,167 )    
Total revenues $ 447,972     59,517     25,316     595,990     160,362     238,194     93,210     (58,167 )   1,562,394  
Net revenues $ 229,773     30,211     14,063     124,251     42,711     74,888     29,363     (1 )   545,259  
Operating income $ 69,457     6,200     3,328     59,682     14,045     7,018     7,534     (1 )   167,263  
Identifiable assets $ 1,410,287     95,390     56,192     480,587     117,333     388,543     237,104     8,788     2,794,224  
Capital expenditures $ 8,319     720     139     739     319     2,127     296         12,659  
Depreciation and amortization $ 7,566     369     328     1,404     594     1,116     505         11,882  
Equity $ 1,145,293     41,542     37,765     293,383     87,926     129,989     150,395     (32,360 )   1,853,933  
                                                       

                                   
(in thousands) UNITED STATES   OTHER NORTH AMERICA   LATIN AMERICA   NORTH ASIA   SOUTH ASIA   EUROPE   MIDDLE EAST,  AFRICA AND INDIA   ELIMI- NATIONS   CONSOLI- DATED
Nine months ended September 30, 2017:                                  
Revenues from unaffiliated customers $ 1,354,811     187,997     69,747     1,873,393     475,163     764,596     293,870         5,019,577  
Transfers between geographic areas 79,356     8,246     11,073     15,139     16,520     29,288     15,316     (174,938 )    
Total revenues $ 1,434,167     196,243     80,820     1,888,532     491,683     793,884     309,186     (174,938 )   5,019,577  
Net revenues $ 737,842     84,630     43,634     371,459     117,634     242,244     89,973     2,964     1,690,380  
Operating income $ 191,256     26,583     8,349     183,515     37,434     36,189     17,928     (5 )   501,249  
Identifiable assets at period end $ 1,636,293     100,651     52,238     446,826     143,893     473,509     212,210     3,261     3,068,881  
Capital expenditures $ 19,492     1,066     3,648     2,492     1,172     38,717     1,016         67,603  
Depreciation and amortization $ 23,389     1,163     930     3,995     1,656     3,707     1,401         36,241  
Equity $ 1,345,266     52,212     25,709     231,831     102,477     139,688     119,649     (35,751 )   1,981,081  
Nine months ended September 30, 2016:                                  
Revenues from unaffiliated customers $ 1,248,923     165,527     62,825     1,605,343     442,464     680,035     250,913         4,456,030  
Transfers between geographic areas 79,617     8,141     11,512     15,849     18,338     30,396     16,452     (180,305 )    
Total revenues $ 1,328,540     173,668     74,337     1,621,192     460,802     710,431     267,365     (180,305 )   4,456,030  
Net revenues $ 683,331     88,404     42,264     357,159     128,486     227,068     88,745     (12 )   1,615,445  
Operating income $ 184,876     23,091     11,016     176,621     48,090     31,109     23,162     (12 )   497,953  
Identifiable assets at period end $ 1,410,287     95,390     56,192     480,587     117,333     388,543     237,104     8,788     2,794,224  
Capital expenditures $ 25,234     1,476     941     2,502     1,325     6,386     2,109         39,973  
Depreciation and amortization $ 22,264     1,113     869     4,111     1,649     3,402     1,445         34,853  
Equity $ 1,145,293     41,542     37,765     293,383     87,926     129,989     150,395     (32,360 )   1,853,933  
                                                       

Net Revenues (Non-GAAP measure)

We commonly refer to the term "net revenues" when commenting about our Company and the results of its operations. Net revenues are a Non-GAAP measure calculated as revenues less directly related operations expenses attributable to the Company's principal services. We believe that net revenues are a better measure than are total revenues when analyzing and discussing our effectiveness in managing our principal services since total revenues earned as a freight consolidator must consider the carriers' charges to us for carrying the shipment, whereas revenues earned in other capacities include primarily the commissions and fees earned by us. Net revenue is one of our primary operational and financial measures and demonstrates our ability to concentrate and leverage purchasing power through effective consolidation of shipments from customers utilizing a variety of transportation carriers and optimal routings. Using net revenues also provides a commonality for comparison among various services. The following table presents the calculation of net revenues.
       
  Three months ended   Nine months ended
  September 30,   September 30,
(in thousands) 2017   2016   2017   2016
Total revenues $ 1,802,166     $ 1,562,394     $ 5,019,577     $ 4,456,030  
Expenses:              
Airfreight services 547,595     444,359     1,490,417     1,236,555  
Ocean freight and ocean services 411,061     359,991     1,163,051     1,006,710  
Customs brokerage and other services 244,368     212,785     675,729     597,320  
Net revenues $ 599,142     $ 545,259     $ 1,690,380     $ 1,615,445  
                               

CONTACTS:          

Jeffrey S. Musser Bradley S. Powell Geoffrey Buscher
President and Chief Executive Officer Senior Vice President and Chief Financial Officer Director - Investor Relations
(206) 674-3433 (206) 674-3412 (206) 892-4510