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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: This email address is being protected from spambots. You need JavaScript enabled to view it.. 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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Corporate Offices

Technology Systems Corporation
8502 SW Kansas Ave
Stuart, FL 34997

Phone: +1 772.221.7720

 

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