EARNINGS RELEASE

By:     Expeditors International of Washington, Inc.
        999 Third Avenue, Suite 2500
        Seattl...
Expeditors International of Washington, Inc.
2nd Quarter 1998 Earnings Release
August 4, 1998
Page 2 of 2


([SHGLWRUV,QWH...
04-Aug-1998                Expeditors International of Washington, Inc. Additional Financial Information                  ...
04-Aug-1998              Expeditors International of Washington, Inc. Additional Financial Information                  Pa...
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Expeditors International of Washington, 2nd98qer

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Expeditors International of Washington, 2nd98qer

  1. 1. EARNINGS RELEASE By: Expeditors International of Washington, Inc. 999 Third Avenue, Suite 2500 Seattle, Washington 98104 CONTACT: R. Jordan Gates Chief Financial Officer (206) 674-3427 FOR IMMEDIATE RELEASE EXPEDITORS ANNOUNCES NET EARNINGS INCREASE OF 36% SEATTLE, WASHINGTON – August 4, 1998, Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced record quarterly net earnings of $11,080,000 for the second quarter of 1998, compared with $8,174,000 for the same quarter of 1997, an increase of 36%. Net revenues for the second quarter of 1998 increased 21% to $82,374,000 as compared with $68,169,000 reported for the second quarter of 1997. Total revenues and operating income were $241,970,000 and $16,319,000 in 1998 compared with $225,575,000 and $12,816,000 for the same quarter of 1997, increases of 7% and 27%, respectively. Diluted net earnings per share for the second quarter were $.42 as compared with $.31 for the same quarter in 1997, an increase of 35%. These results included a non-recurring gain on the sale of a building of $928,000, or $.02 per share which was reported as “other income”. The company also reported that same store net revenues and operating income increased 19% and 30%, respectively, for the second quarter of 1998 when compared with 1997. For the six months ended June 30, 1998, net earnings rose to $19,114,000 from $13,772,000 in 1997, an increase of 39%. Net revenues for the six months increased to $158,138,000 from $125,887,000 for 1997, up 26%. Total revenues and operating income for the six months were $465,319,000 and $29,018,000 in 1998 compared with $421,544,000 and $21,397,000 for the same period in 1997, increases of 10% and 36%, respectively. Diluted net earnings per share for the first two quarters of 1998 were $.72 as compared with $.53 for the same period of 1997, an increase of 36%. Same store net revenues and operating income increased 20 % and 33%, respectively, for the six months ended June 30 of 1998 when compared with same period of 1997. “We are certainly satisfied with the outcome of our second quarter.” commented Peter J. Rose, Chairman and Chief Executive Officer. “While our airfeight net revenue growth was not as strong as other recent quarters, our growth in ocean and in customs brokerage and other import services was excellent. What these results showcase is the inherent strength in our network. Our employees are incentivized to maintain profitable operations and they have proven that this can be accomplished in less than robust global business environments. We believe that success comes from understanding customer needs and committing to meet those needs profitably by sticking to core competencies. We’ve created a corporate culture and designed our systems to be compatible with these objectives. It seems to work.” Rose went on to say. “While generally pleased with the second quarter, there were tremendous obstacles to overcome, e.g., the Lewinsky testimony, the heat wave that covered most of the U.S., the automotive strike, the Asian currency crises, the change of government in Indonesia, and the Hong Kong airport start-up woes, all of which did not materially affect us but did affect our stock. We eagerly await any forthcoming world crises for the third quarter.” concluded Rose. Expeditors is a global logistics company. Headquartered in Seattle, Washington, the company employs trained professionals in 133 offices and 11 international service centers located on six continents linked into a seamless worldwide network through an integrated information management system. Services include air and ocean freight forwarding, vendor consolidation, customs clearance, marine insurance, distribution and other value added international logistics services. Additional information is available upon request or via the Internet at http://www.expd.com.
  2. 2. Expeditors International of Washington, Inc. 2nd Quarter 1998 Earnings Release August 4, 1998 Page 2 of 2 ([SHGLWRUV,QWHUQDWLRQDORI:DVKLQJWRQ,QF )LQDQFLDO+LJKOLJKWV 7KUHHPRQWKVDQG6L[PRQWKVHQGHG -XQHDQG 8QDXGLWHG LQ's except share data) Three months ended Six months ended June 30 June 30 1998 1997 % 1998 1997 % Increase Increase Revenues 241,970 225,575 7% 465,319 421,544 10% Net revenues 82,374 68,169 21% 158,138 125,887 26% Operating income 16,319 12,816 27% 29,018 21,397 36% Net earnings 11,080 8,174 36% 19,114 13,772 39% Diluted earnings per .42 .31 35% .72 .53 36% share Basic earnings per share .45 .34 32% .78 .57 37% Diluted weighted average shares outstanding 26,618,738 26,179,131 26,588,105 26,087,778 Basic weighted average shares outstanding 24,592,225 24,319,723 24,576,758 24,279,477 ADDITIONAL FINANCIAL INFORMATION AVAILABLE UPON REQUEST New Offices Opened in the 2nd Quarter of 1998 North America Europe McAllen, TX-USA Florence, Italy Prague, Czech Republic
  3. 3. 04-Aug-1998 Expeditors International of Washington, Inc. Additional Financial Information Page 3 of 4 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except share data) June 30, December 31, Assets 1998 1997 (Unaudited) Current assets: Cash and cash equivalents $ 39,651 $ 42,094 Short-term investments 433 214 Accounts receivable, net 195,937 206,501 Deferred Federal and state taxes 4,376 4,296 Other current assets 10,935 6,399 Total current assets 251,332 259,504 Property and equipment, net 89,872 66,550 Other assets 14,984 16,122 $356,188 $ 342,176 Liabilities and Shareholders' Equity Current liabilities: Short-term borrowings 1,090 2,145 Accounts payable 136,814 143,980 Income taxes 7,336 7,181 Other current liabilities 24,424 18,946 Total current liabilities 169,664 172,252 Shareholders' equity: Preferred stock, par value $.01 per share. Authorized 2,000,000 shares; none issued -- -- Common stock, par value $.01 per share. Authorized 80,000,000 shares; issued and outstanding 24,607,867 shares at June 30, 1998 and 24,546,380 at December 31, 1997 246 245 Additional paid-in capital 16,508 15,534 Retained earnings 176,617 159,225 Equity adjustments from foreign currency translation ( 6,847 ) ( 5,080 ) Total shareholders' equity 186,524 169,924 $ 356,188 $ 342,176
  4. 4. 04-Aug-1998 Expeditors International of Washington, Inc. Additional Financial Information Page 4 of 4 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, 1998 1997 1998 1997 Revenues: Airfreight $ 152,017 156,974 299,164 291,902 Ocean freight and ocean services 54,586 42,068 99,915 81,878 Customs brokerage and import services 35,367 26,533 66,240 47,764 Total revenues 241,970 225,575 465,319 421,544 Operating expenses: Airfreight consolidation 120,433 127,446 236,075 236,750 Ocean freight consolidation 39,163 29,960 71,106 58,907 Salaries and related costs 45,102 36,939 87,558 69,269 Rent 3,527 2,584 7,006 4,995 Depreciation and amortization 3,610 2,662 6,874 5,044 Selling and promotion 3,562 3,228 6,980 6,108 Other 10,254 9,940 20,702 19,074 Total operating expenses 225,651 212,759 436,301 400,147 Operating income 16,319 12,816 29,018 21,397 Interest expense 54 33 102 78 Interest income 620 617 1,059 1,099 Other, net ** 723 16 657 8 Other income, net ** 1,289 568 1,614 1,029 Earnings before income taxes 17,608 13,384 30,632 22,426 Income tax expense 6,528 5,210 11,518 8,654 Net earnings $ 11,080 $ 8,174 $ 19,114 $ 13,772 Diluted earnings per share $ .42 $ .31 $ .72 $ .53 Basic earnings per share $ .45 $ .34 $ .78 $ .57 Diluted weighted average shares outstanding 26,618,738 26,179,131 26,588,105 26,087,778 Basic weighted average shares outstanding 24,592,225 24,319,723 24,576,758 24,279,477 ** Includes $928,000 gain on sale of facility which occurred in April of 1998 Certain 1997 amounts have been reclassified to conform to the 1998 presentation

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