Expeditors Reports First Quarter 2021 EPS of $1.67
SEATTLE–(BUSINESS WIRE)–Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced first quarter 2021 financial results including the following highlights compared to the same quarter of 2020:
- Diluted Net Earnings Attributable to Shareholders per share (EPS1) increased 135% to $1.67
- Net Earnings Attributable to Shareholders increased 135% to $287 million
- Operating Income increased 142% to $386 million
- Revenues increased 77% to $3.4 billion
- Airfreight tonnage volume and ocean container volume both increased 29%
“Never before in our experience has capacity been so scarce in both air and ocean at the same time,” said Jeffrey S. Musser, President and Chief Executive Officer. “As a result, shippers face unprecedented challenges with their supply chains and we are doing everything we can to leverage the strength of our carrier relationships in order to secure space for our customers. During these times, the strength of our flexible, non-asset-based operating model is on display. All products performed very well and we set all-time highs in revenues, operating income and net earnings. We experienced strong growth in airfreight tonnage and ocean containers shipped during the quarter, serviced established customers and on-boarded new business when possible.
“The severity of the ongoing supply/demand imbalance has kept buy and sell rates elevated and volatile, in both the air and ocean markets. Ongoing shortages in international air capacity led to elevated pricing, port congestion, and lack of equipment, which, coupled with a rapid spike in demand, created ocean trade disruptions and significant backlogs. These conditions leave shippers with limited options for getting their products to market. This is one example of the power of our long history of support for our carrier partners during both good times and bad. Amidst persistent disruptions and supply chain realignments, we have remained highly focused and aware of marketplace shifts, while working our strong relationships and executing as efficiently as we ever have to secure precious capacity on behalf of our customers.
“We expect the operating environment to remain unsettled as long as constrained capacity and other disruptions, such as port congestion, the uneven lifting of pandemic-restrictions, and rising fuel costs continue to impact the movement of freight. History tells us that the supply/demand imbalance and rate volatility will stabilize over time. However, if the global response to COVID-19 has taught us anything, it is that conditions can change rapidly in today’s interconnected marketplace. A year ago, it was nearly impossible to imagine the impact of what then lay before us, as economies around the world were shutting down and people were going into isolation to protect themselves from a deadly new virus. As we implemented our business continuity plans around the globe, we also made the decision to invest in our people and not lay off any of our employees. A year later, we are proud of and grateful to our entire workforce for their extraordinary dedication and determined effort to stay safe while delivering the highest level of customer service.”
Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “Despite comparisons to a relatively soft first quarter a year ago, when the initial disruptions from COVID-19 led to lower volumes in all products, performance during this latest quarter was strong all across the Company, including Air, Ocean, Customs Brokerage, Order Management, Transcon and Distribution. The majority of our workforce continues to work from remote locations, even as we slowly and cautiously explore re-opening our offices for return-to-work in certain countries and locations. While staying safe remains our top priority, we have continued to enhance our productivity and generated the best operating efficiency in the Company’s history. I would continue to caution that we are unable to predict how ongoing disruptions will affect our future operations or financial results going forward, and that we do not expect the current unprecedented operating conditions to persist long-term. We will continue to make important investments in people, processes, and technology, as well as to invest in our strategic efforts to explore new areas for profitable growth.”
Expeditors is a global logistics company headquartered in Seattle, Washington. The Company employs trained professionals in 176 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.
|
Expeditors International of Washington, Inc. First Quarter 2021 Earnings Release, May 4, 2021 Financial Highlights for the three months ended March 31, 2021 and 2020 (Unaudited) (in 000’s of US dollars except per share data) |
|||||||||||||
|
|
|
Three months ended March 31, |
|
||||||||||
|
|
|
2021 |
|
|
2020 |
|
|
% Change |
|
||||
|
Revenues |
|
$ |
3,357,540 |
|
|
$ |
1,901,864 |
|
|
77 |
% |
|
|
|
Directly related cost of transportation and other expenses1 |
|
$ |
2,406,004 |
|
|
$ |
1,286,728 |
|
|
87 |
% |
|
|
|
Salaries and other operating expenses2 |
|
$ |
566,021 |
|
|
$ |
456,081 |
|
|
24 |
% |
|
|
|
Operating income |
|
$ |
385,515 |
|
|
$ |
159,055 |
|
|
142 |
% |
|
|
|
Net earnings attributable to shareholders |
|
$ |
287,220 |
|
|
$ |
122,344 |
|
|
135 |
% |
|
|
|
Diluted earnings attributable to shareholders per share |
|
$ |
1.67 |
|
|
$ |
0.71 |
|
|
135 |
% |
|
|
|
Basic earnings attributable to shareholders per share |
|
$ |
1.70 |
|
|
$ |
0.73 |
|
|
133 |
% |
|
|
|
Diluted weighted average shares outstanding |
|
|
171,551 |
|
|
|
171,450 |
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
|
|
169,214 |
|
|
|
168,735 |
|
|
|
|
|
|
1Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings.
2Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings
During the three months ended March 31, 2021, we repurchased 0.9 million shares of common stock at an average price of $92.98 per share. During the three months ended March 31, 2020, we repurchased 4.0 million shares of common stock at an average price of $70.81 per share.
|
|
|
Employee Full-time Equivalents as of March 31, |
|
|||||
|
|
|
2021 |
|
|
2020 |
|
||
|
North America |
|
|
6,819 |
|
|
|
6,848 |
|
|
Europe |
|
|
3,595 |
|
|
|
3,430 |
|
|
North Asia |
|
|
2,379 |
|
|
|
2,429 |
|
|
South Asia |
|
|
1,640 |
|
|
|
1,677 |
|
|
Middle East, Africa and India |
|
|
1,477 |
|
|
|
1,536 |
|
|
Latin America |
|
|
773 |
|
|
|
848 |
|
|
Information Systems |
|
|
973 |
|
|
|
955 |
|
|
Corporate |
|
|
399 |
|
|
|
379 |
|
|
Total |
|
|
18,055 |
|
|
|
18,102 |
|
|
|
|
First quarter year-over-year percentage increase in: |
|
|||||
|
2021 |
|
Airfreight kilos |
|
|
Ocean freight FEU |
|
||
|
January |
|
23 |
% |
|
|
15 |
% |
|
|
February |
|
32 |
% |
|
|
22 |
% |
|
|
March |
|
32 |
% |
|
|
54 |
% |
|
|
Quarter |
|
29 |
% |
|
|
29 |
% |
|
Investors may submit written questions via e-mail to: [email protected]. Questions received by the end of business on May 7, 2021 will be considered in management’s 8-K “Responses to Selected Questions.”
|
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) |
||||||||
|
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
||
|
Assets: |
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,793,393 |
|
|
$ |
1,527,791 |
|
|
Accounts receivable, less allowance for credit loss of $5,941 at March 31, 2021 and $5,579 at December 31, 2020 |
|
|
2,227,039 |
|
|
|
1,998,055 |
|
|
Deferred contract costs |
|
|
387,845 |
|
|
|
327,448 |
|
|
Other |
|
|
85,918 |
|
|
|
110,250 |
|
|
Total current assets |
|
|
4,494,195 |
|
|
|
3,963,544 |
|
|
Property and equipment, less accumulated depreciation and amortization of $523,829 at March 31, 2021 and $516,988 at December 31, 2020 |
|
|
497,376 |
|
|
|
506,425 |
|
|
Operating lease right-of-use assets |
|
|
438,667 |
|
|
|
432,723 |
|
|
Goodwill |
|
|
7,927 |
|
|
|
7,927 |
|
|
Other assets, net |
|
|
16,832 |
|
|
|
16,884 |
|
|
Total assets |
|
$ |
5,454,997 |
|
|
$ |
4,927,503 |
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,295,178 |
|
|
$ |
1,136,859 |
|
|
Accrued expenses, primarily salaries and related costs |
|
|
311,767 |
|
|
|
257,021 |
|
|
Contract liabilities |
|
|
447,779 |
|
|
|
379,722 |
|
|
Current portion of operating lease liabilities |
|
|
76,128 |
|
|
|
74,004 |
|
|
Federal, state and foreign income taxes |
|
|
64,170 |
|
|
|
45,437 |
|
|
Total current liabilities |
|
|
2,195,022 |
|
|
|
1,893,043 |
|
|
Noncurrent portion of operating lease liabilities |
|
|
369,286 |
|
|
|
364,185 |
|
|
Deferred federal and state income taxes, net |
|
|
12,039 |
|
|
|
7,048 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Shareholders’ Equity: |
|
|
|
|
|
|
|
|
|
Preferred stock, none issued |
|
|
— |
|
|
|
— |
|
|
Common stock, par value $0.01 per share. Issued and outstanding: 168,808 shares at March 31, 2021 and 169,294 shares at December 31, 2020 |
|
|
1,688 |
|
|
|
1,693 |
|
|
Additional paid-in capital |
|
|
101,269 |
|
|
|
157,496 |
|
|
Retained earnings |
|
|
2,887,323 |
|
|
|
2,600,201 |
|
|
Accumulated other comprehensive loss |
|
|
(115,486 |
) |
|
|
(99,753 |
) |
|
Total shareholders’ equity |
|
|
2,874,794 |
|
|
|
2,659,637 |
|
|
Noncontrolling interest |
|
|
3,856 |
|
|
|
3,590 |
|
|
Total equity |
|
|
2,878,650 |
|
|
|
2,663,227 |
|
|
Total liabilities and equity |
|
$ |
5,454,997 |
|
|
$ |
4,927,503 |
|
|
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited) |
||||||||
|
|
|
Three months ended March 31, |
|
|||||
|
|
|
2021 |
|
|
2020 |
|
||
|
Revenues: |
|
|
|
|
|
|
|
|
|
Airfreight services |
|
$ |
1,476,961 |
|
|
$ |
709,039 |
|
|
Ocean freight and ocean services |
|
|
958,178 |
|
|
|
493,427 |
|
|
Customs brokerage and other services |
|
|
922,401 |
|
|
|
699,398 |
|
|
Total revenues |
|
|
3,357,540 |
|
|
|
1,901,864 |
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
Airfreight services |
|
|
1,105,590 |
|
|
|
520,169 |
|
|
Ocean freight and ocean services |
|
|
746,701 |
|
|
|
366,483 |
|
|
Customs brokerage and other services |
|
|
553,713 |
|
|
|
400,076 |
|
|
Salaries and related |
|
|
452,105 |
|
|
|
342,040 |
|
|
Rent and occupancy |
|
|
45,280 |
|
|
|
42,524 |
|
|
Depreciation and amortization |
|
|
12,987 |
|
|
|
12,660 |
|
|
Selling and promotion |
|
|
3,070 |
|
|
|
8,243 |
|
|
Other |
|
|
52,579 |
|
|
|
50,614 |
|
|
Total operating expenses |
|
|
2,972,025 |
|
|
|
1,742,809 |
|
|
Operating income |
|
|
385,515 |
|
|
|
159,055 |
|
|
Other Income (Expense): |
|
|
|
|
|
|
|
|
|
Interest income |
|
|
1,946 |
|
|
|
4,807 |
|
|
Other, net |
|
|
3,000 |
|
|
|
3,384 |
|
|
Other income, net |
|
|
4,946 |
|
|
|
8,191 |
|
|
Earnings before income taxes |
|
|
390,461 |
|
|
|
167,246 |
|
|
Income tax expense |
|
|
102,511 |
|
|
|
44,464 |
|
|
Net earnings |
|
|
287,950 |
|
|
|
122,782 |
|
|
Less net earnings attributable to the noncontrolling interest |
|
|
730 |
|
|
|
438 |
|
|
Net earnings attributable to shareholders |
|
$ |
287,220 |
|
|
$ |
122,344 |
|
|
Diluted earnings attributable to shareholders per share |
|
$ |
1.67 |
|
|
$ |
0.71 |
|
|
Basic earnings attributable to shareholders per share |
|
$ |
1.70 |
|
|
$ |
0.73 |
|
|
Weighted average diluted shares outstanding |
|
|
171,551 |
|
|
|
171,450 |
|
|
Weighted average basic shares outstanding |
|
|
169,214 |
|
|
|
168,735 |
|
|
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) |
||||||||
|
|
|
|
|
|||||
|
|
|
Three months ended March 31, |
|
|||||
|
|
|
2021 |
|
|
2020 |
|
||
|
Operating Activities: |
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
287,950 |
|
|
$ |
122,782 |
|
|
Adjustments to reconcile net earnings to net cash from operating activities: |
|
|
|
|
|
|
|
|
|
Provisions for losses on accounts receivable |
|
|
1,199 |
|
|
|
1,820 |
|
|
Deferred income tax expense (benefit) |
|
|
8,151 |
|
|
|
(5,139 |
) |
|
Stock compensation expense |
|
|
11,185 |
|
|
|
11,156 |
|
|
Depreciation and amortization |
|
|
12,987 |
|
|
|
12,660 |
|
|
Other, net |
|
|
551 |
|
|
|
433 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
(Increase) decrease in accounts receivable |
|
|
(252,914 |
) |
|
|
16,680 |
|
|
Increase in accounts payable and accrued expenses |
|
|
233,153 |
|
|
|
917 |
|
|
Increase in deferred contract costs |
|
|
(71,258 |
) |
|
|
(16,068 |
) |
|
Increase in contract liabilities |
|
|
79,590 |
|
|
|
21,201 |
|
|
Increase in income taxes payable, net |
|
|
46,638 |
|
|
|
10,488 |
|
|
Increase in other, net |
|
|
(1,488 |
) |
|
|
(11,930 |
) |
|
Net cash from operating activities |
|
|
355,744 |
|
|
|
165,000 |
|
|
Investing Activities: |
|
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(8,391 |
) |
|
|
(6,127 |
) |
|
Other, net |
|
|
(34 |
) |
|
|
(143 |
) |
|
Net cash from investing activities |
|
|
(8,425 |
) |
|
|
(6,270 |
) |
|
Financing Activities: |
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock |
|
|
19,757 |
|
|
|
23,399 |
|
|
Repurchases of common stock |
|
|
(85,997 |
) |
|
|
(283,240 |
) |
|
Payments for taxes related to net share settlement of equity awards |
|
|
(1,275 |
) |
|
|
(1,396 |
) |
|
Net cash from financing activities |
|
|
(67,515 |
) |
|
|
(261,237 |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(14,202 |
) |
|
|
(16,011 |
) |
|
Change in cash and cash equivalents |
|
|
265,602 |
|
|
|
(118,518 |
) |
|
Cash and cash equivalents at beginning of period |
|
|
1,527,791 |
|
|
|
1,230,491 |
|
|
Cash and cash equivalents at end of period |
|
$ |
1,793,393 |
|
|
$ |
1,111,973 |
|
|
Taxes Paid: |
|
|
|
|
|
|
|
|
|
Income taxes |
|
$ |
46,607 |
|
|
$ |
35,304 |
|
|
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 |
|
|||||||||
|
For the three months ended March 31, 2021: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
875,392 |
|
|
|
94,858 |
|
|
|
44,864 |
|
|
|
1,325,621 |
|
|
|
363,682 |
|
|
|
493,718 |
|
|
|
160,609 |
|
|
|
(1,204 |
) |
|
|
3,357,540 |
|
|
Directly related cost of transportation and other expenses1 |
|
$ |
502,637 |
|
|
|
53,791 |
|
|
|
26,700 |
|
|
|
1,084,102 |
|
|
|
283,860 |
|
|
|
334,294 |
|
|
|
121,212 |
|
|
|
(592 |
) |
|
|
2,406,004 |
|
|
Salaries and other operating expenses2 |
|
$ |
238,698 |
|
|
|
25,737 |
|
|
|
12,377 |
|
|
|
106,920 |
|
|
|
43,165 |
|
|
|
109,455 |
|
|
|
30,275 |
|
|
|
(606 |
) |
|
|
566,021 |
|
|
Operating income |
|
$ |
134,057 |
|
|
|
15,330 |
|
|
|
5,787 |
|
|
|
134,599 |
|
|
|
36,657 |
|
|
|
49,969 |
|
|
|
9,122 |
|
|
|
(6 |
) |
|
|
385,515 |
|
|
Identifiable assets at period end |
|
$ |
2,747,984 |
|
|
|
194,050 |
|
|
|
93,072 |
|
|
|
988,954 |
|
|
|
331,271 |
|
|
|
853,944 |
|
|
|
265,495 |
|
|
|
(19,773 |
) |
|
|
5,454,997 |
|
|
Capital expenditures |
|
$ |
3,025 |
|
|
|
122 |
|
|
|
53 |
|
|
|
357 |
|
|
|
579 |
|
|
|
3,554 |
|
|
|
701 |
|
|
|
— |
|
|
|
8,391 |
|
|
Equity |
|
$ |
1,985,265 |
|
|
|
73,066 |
|
|
|
32,632 |
|
|
|
342,233 |
|
|
|
148,293 |
|
|
|
218,198 |
|
|
|
121,040 |
|
|
|
(42,077 |
) |
|
|
2,878,650 |
|
|
For the three months ended March 31, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
650,407 |
|
|
|
81,831 |
|
|
|
37,890 |
|
|
|
537,955 |
|
|
|
169,042 |
|
|
|
320,640 |
|
|
|
105,039 |
|
|
|
(940 |
) |
|
|
1,901,864 |
|
|
Directly related cost of transportation and other expenses1 |
|
$ |
373,961 |
|
|
|
45,890 |
|
|
|
23,765 |
|
|
|
425,301 |
|
|
|
121,282 |
|
|
|
221,998 |
|
|
|
74,976 |
|
|
|
(445 |
) |
|
|
1,286,728 |
|
|
Salaries and other operating expenses2 |
|
$ |
225,944 |
|
|
|
23,712 |
|
|
|
11,749 |
|
|
|
57,433 |
|
|
|
29,908 |
|
|
|
81,854 |
|
|
|
25,950 |
|
|
|
(469 |
) |
|
|
456,081 |
|
|
Operating income |
|
$ |
50,502 |
|
|
|
12,229 |
|
|
|
2,376 |
|
|
|
55,221 |
|
|
|
17,852 |
|
|
|
16,788 |
|
|
|
4,113 |
|
|
|
(26 |
) |
|
|
159,055 |
|
|
Identifiable assets at period end |
|
$ |
1,858,250 |
|
|
|
135,810 |
|
|
|
68,402 |
|
|
|
512,808 |
|
|
|
179,508 |
|
|
|
554,831 |
|
|
|
200,382 |
|
|
|
(24 |
) |
|
|
3,509,967 |
|
|
Capital expenditures |
|
$ |
4,497 |
|
|
|
61 |
|
|
|
102 |
|
|
|
325 |
|
|
|
188 |
|
|
|
645 |
|
|
|
309 |
|
|
|
— |
|
|
|
6,127 |
|
|
Equity |
|
$ |
1,369,580 |
|
|
|
63,378 |
|
|
|
28,020 |
|
|
|
237,255 |
|
|
|
102,001 |
|
|
|
159,222 |
|
|
|
113,349 |
|
|
|
(35,660 |
) |
|
|
2,037,145 |
|
1Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings.
2Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings.
The Company’s consolidated financial results in the three months ended March 31, 2021 and 2020 were each significantly impacted by the effects of the global pandemic in divergent ways. In the first quarter of 2021, the Company experienced strong volumes and high sell and buy rates as a result of imbalances between demand and carrier capacity and continuing effects of disruptions in supply chains originating in measures to combat the pandemic in 2020. This is in contrast with slower activity in North Asia in the first quarter of 2020 as the pandemic resulted in temporary closures and limited operations in the Company’s China offices. Shipments were also rerouted or delayed by customers and service providers as they were taking their own precautionary measures. These impacts are affecting all of the Company’s geographical segments and most notably the year-over-year comparability of the North Asia segment. In the first quarter of 2021, the People’s Republic of China, including Hong Kong, represented 32% and 27%, respectively, of the Company’s total revenues and total operating income, whereas in the first quarter of 2020 it represented 23% and 25%, respectively.
Contacts
Jeffrey S. Musser
President and Chief Executive Officer
(206) 674-3433
Bradley S. Powell
Senior Vice President and Chief Financial Officer
(206) 674-3412
Geoffrey Buscher
Director – Investor Relations
(206) 892-4510
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