Expeditors International of Washington, Inc. (NASDAQ:EXPD) today
announced fourth quarter 2020 financial results including the
following highlights compared to the same quarter of 2019:
- Diluted Net Earnings Attributable to Shareholders per share
(EPS1) increased 47% to $1.16
- Net Earnings Attributable to Shareholders increased 45% to $199
million
- Operating Income increased 56% to $282 million
- Revenues increased 55% to $3.2 billion
- Airfreight tonnage volume increased 10% and ocean container
volume increased 19%
“We moved more freight in the fourth quarter of 2020 than in any
other quarter in our history,” said Jeffrey S. Musser, President
and Chief Executive Officer. “We set Company bests in airfreight
tonnage and ocean containers shipped, as well as in revenue,
operating income and net earnings. All 17,500 people in our
international network performed at levels we have never experienced
before and in one of the most challenging operating environments in
our 40-year history. I cannot thank our people enough and am
tremendously proud to be part of an organization capable of
performing at these levels while facing so many disruptions due to
the COVID-19 pandemic. I credit our strong knowledge-based culture
and our ability to collectively work as one team as primary factors
in our success.
“Air buy and sell rates were elevated and volatile during the
quarter, and supply and demand remained severely out of alignment,
as demand for certain goods, particularly from North Asia, drove
record high air tonnage. Air capacity remained extremely tight, as
passenger flights have not returned to anywhere near their
pre-COVID-19 pandemic levels. We anticipate that air supply/demand
and pricing conditions are likely to remain unsettled well into
2021.
“Our ocean services business also experienced significant
marketplace imbalance during the quarter, as demand soared and
volumes increased, particularly on exports from North and South
Asia, which drove higher average buy and sell rates. In addition,
port congestion from labor and equipment shortages have
significantly disrupted sailing schedules. We expect the pressure
on buy rates to remain elevated until those conditions subside.
“In addition to our diverse workforce and our inclusive culture,
our solid performance was largely based on the strength of our
carrier relationships – both in air and ocean. Here, too, I applaud
the extra focus and dedication of our people to keep those
relationships strong and to secure available space for our
customers in such unpredictable conditions. The marketplace remains
very fluid. Despite some signs of improved COVID-19 conditions in
certain parts of the world, supply chains continue to be disrupted.
We remain focused on keeping our people safe, first and foremost,
while continuing to serve our customers at the very highest
level.”
Bradley S. Powell, Senior Vice President and Chief Financial
Officer, added, “We also experienced strong growth in Customs
Brokerage, Order Management, Transcon and Distribution, as our
customers’ businesses improved and we on-boarded new customers.
These latest results are particularly striking in comparison to the
fourth quarter of 2019, when average sell rates had declined faster
than our average buy rates, and both air and ocean volumes fell as
slowing trade to and from China impacted overall freight movement
around the globe just as the earliest effects of COVID-19 were
being felt. While we are unable to predict how ongoing disruptions
related to COVID-19 will affect our future operations or financial
results going forward, we do not expect these 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.”
Mr. Powell noted that the Company’s effective tax rate for the
full year of 2020 was 27.0%, compared to 25.6% in 2019. Earnings of
our international subsidiaries, which on average have higher
effective tax rates when compared to U.S. Federal and State tax
rates, were proportionally higher in 2020 than in the U.S.
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.
_______________________
1Diluted earnings attributable to
shareholders per share.
NOTE: See Disclaimer on Forward-Looking
Statements on the following page of this release.
Expeditors International of
Washington, Inc. Fourth Quarter 2020 Earnings Release, February 16,
2021 Financial Highlights for the Three and Twelve months ended
December 31, 2020 (Unaudited) (in 000's of US dollars except per
share data)
Three months ended December
31,
Twelve months ended December
31,
2020
2019
% Change
2020
2019
% Change
Revenues
$
3,169,188
$
2,044,941
55
%
$
10,116,481
$
8,175,426
24
%
Directly related cost of transportation
and other expenses1
$
2,340,603
$
1,398,638
67
%
$
7,188,790
$
5,538,958
30
%
Salaries and other operating
expenses2
$
546,774
$
465,963
17
%
$
1,987,254
$
1,869,776
6
%
Operating income
$
281,811
$
180,340
56
%
$
940,437
$
766,692
23
%
Net earnings attributable to
shareholders
$
198,620
$
137,326
45
%
$
696,140
$
590,395
18
%
Diluted earnings attributable to
shareholders per share
$
1.16
$
0.79
47
%
$
4.07
$
3.39
20
%
Basic earnings attributable to
shareholders per share
$
1.17
$
0.81
44
%
$
4.14
$
3.45
20
%
Diluted weighted average shares
outstanding
171,692
173,401
170,896
174,209
Basic weighted average shares
outstanding
169,473
170,339
168,333
170,899
1
Directly 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 Consolidated Statements of
Earnings.
2
Salaries and other operating expenses
totals Salaries and related, Rent and occupancy, Depreciation and
amortization, Selling and promotion and Other as shown in the
Consolidated Statements of Earnings.
The twelve months ended December 31, 2019 includes the effect of
changing our presentation of certain import services from a net to
a gross basis and our revised presentation of destination services
that started in the second quarter of 2019, which increased
revenues and directly related operating expenses in customs
brokerage and other services but did not change operating
income.
During the three and twelve months ended December 31, 2020, we
repurchased 0.2 million and 4.6 million shares of common stock at
an average price of $90.81 and $72.26 per share, respectively.
During the three and twelve months ended December 31, 2019, we
repurchased 1.2 million and 5.3 million shares of common stock at
an average price of $73.89 and $72.91 per share, respectively.
Employee Full-time Equivalents
as of December 31,
2020
2019
North America
6,724
6,905
Europe
3,492
3,459
North Asia
2,398
2,488
South Asia
1,631
1,697
Middle East, Africa and India
1,497
1,548
Latin America
784
855
Information Systems
983
961
Corporate
399
384
Total
17,908
18,297
Fourth quarter year-over-year
percentage increase in:
Airfreight kilos
Ocean freight FEU
2020
October
5
%
15
%
November
12
%
20
%
December
13
%
21
%
Quarter
10
%
19
%
Investors may submit written questions via e-mail to:
investor@expeditors.com. Questions received by the end of business
on February 19, 2021 will be considered in management's 8-K
“Responses to Selected Questions.”
Disclaimer on Forward-Looking Statements
Certain statements contained in this news release are
“forward-looking statements,” such as statements relating to
management’s views with respect to future events and underlying
assumptions that involve risks and uncertainties, including
statements such as our expectations of continued volatility in air
pricing, ongoing pressure for elevated buy rates in the ocean
services business, that the COVID-19-related operating conditions
will not continue long-term, and that the Company expects to
continue making investments in people, processes and technology.
Future financial performance could differ materially because of
factors such as: our ability to perform at these levels while
facing several disruptions due to the COVID-19 pandemic, including
employee retention and their health and safety; our ability to
execute during port congestion due to labor and equipment shortages
and disrupted sailing schedules; the timing of passenger flights
returning close to their pre-COVID-19 levels; the impact on our
ocean volumes; continued volatility in airfreight and ocean buy and
sell rates; our access to carrier capacity; our ability to keep our
global offices open and operating; our ability to execute our
business continuity plans; the strength of our financial position
and our ability to continue to make investments in our strategic
initiatives; our ability to remain a strong, healthy, unified and
resilient organization; and the future impact of changes in the mix
of domestic and foreign income on our effective tax rate. The
COVID-19 pandemic could have the effect of heightening many of the
other risks described in Item 1A of our Annual Report on Form 10-K,
including, without limitation, those related to the success of our
strategy and desire to maintain historical unitary profitability,
our ability to attract and retain customers, our ability to manage
costs, interruptions to our information technology systems, the
ability of third-party providers to perform and potential
litigation as updated by our reports on Form 10-Q, filed with the
Securities and Exchange Commission. These and other factors are
discussed in the Company’s regulatory filings with the Securities
and Exchange Commission, including those in “Item 1A. Risk Factors”
of the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2019 and in “Item 1A. Risk Factors” of the
Company’s most recent Quarterly Report on Form 10-Q. Additional
information will also be set forth in our Annual Report on Form
10-K for the year ended December 31, 2020. The forward-looking
statements contained in this news release speak only as of this
date, and the Company does not assume any obligation to update them
except as required by law.
EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In
thousands, except per share data) (Unaudited)
December 31, 2020
December 31, 2019
Assets:
Current Assets:
Cash and cash equivalents
$
1,527,791
$
1,230,491
Accounts receivable, net
1,998,055
1,315,091
Deferred contract costs
327,448
131,783
Other
110,250
92,558
Total current assets
3,963,544
2,769,923
Property and equipment, net
506,425
499,344
Operating lease right-of-use assets
432,723
390,035
Goodwill
7,927
7,927
Deferred federal and state income taxes,
net
—
8,034
Other assets, net
16,884
16,621
Total assets
$
4,927,503
$
3,691,884
Liabilities:
Current Liabilities:
Accounts payable
$
1,136,859
$
735,695
Accrued expenses, primarily salaries and
related costs
257,021
189,446
Contract liabilities
379,722
154,183
Current portion of operating lease
liabilities
74,004
65,367
Federal, state and foreign income
taxes
45,437
23,627
Total current liabilities
1,893,043
1,168,318
Noncurrent portion of operating lease
liabilities
364,185
326,347
Deferred federal and state income taxes,
net
7,048
—
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, none issued
—
—
Common stock, par value $0.01 per share,
authorized 640,000. Issued and outstanding: 169,294 shares at
December 31, 2020 and 169,622 shares at December 31, 2019
1,693
1,696
Additional paid-in capital
157,496
3,203
Retained earnings
2,600,201
2,321,316
Accumulated other comprehensive loss
(99,753
)
(131,187
)
Total shareholders’ equity
2,659,637
2,195,028
Noncontrolling interest
3,590
2,191
Total equity
2,663,227
2,197,219
Total liabilities and equity
$
4,927,503
$
3,691,884
EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC. AND SUBSIDIARIES Consolidated Statements of
Earnings (In thousands, except per share data) (Unaudited)
Three months ended December
31,
Twelve months ended December
31,
2020
2019
2020
2019
Revenues:
Airfreight services
$
1,547,223
$
757,954
$
4,784,402
$
2,929,882
Ocean freight and ocean services
755,250
519,730
2,353,247
2,217,554
Customs brokerage and other services
866,715
767,257
2,978,832
3,027,990
Total revenues
3,169,188
2,044,941
10,116,481
8,175,426
Operating Expenses:
Airfreight services
1,228,254
569,282
3,679,185
2,143,999
Ocean freight and ocean services
577,600
378,801
1,762,754
1,613,646
Customs brokerage and other services
534,749
450,555
1,746,851
1,781,313
Salaries and related
427,344
352,723
1,538,104
1,422,315
Rent and occupancy
43,480
41,775
169,863
166,182
Depreciation and amortization
14,339
12,494
56,959
50,950
Selling and promotion
4,135
11,150
18,436
44,002
Other
57,476
47,821
203,892
186,327
Total operating expenses
2,887,377
1,864,601
9,176,044
7,408,734
Operating income
281,811
180,340
940,437
766,692
Other Income (Expense):
Interest income
1,545
4,680
10,415
22,803
Other, net
551
477
5,712
6,299
Other income, net
2,096
5,157
16,127
29,102
Earnings before income taxes
283,907
185,497
956,564
795,794
Income tax expense
84,382
47,749
258,350
203,778
Net earnings
199,525
137,748
698,214
592,016
Less net earnings attributable to the
noncontrolling
interest
905
422
2,074
1,621
Net earnings attributable to
shareholders
$
198,620
$
137,326
$
696,140
$
590,395
Diluted earnings attributable to
shareholders per share
$
1.16
$
0.79
$
4.07
$
3.39
Basic earnings attributable to
shareholders per share
$
1.17
$
0.81
$
4.14
$
3.45
Weighted average diluted shares
outstanding
171,692
173,401
170,896
174,209
Weighted average basic shares
outstanding
169,473
170,339
168,333
170,899
EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC. AND SUBSIDIARIES Consolidated Statements of Cash
Flows (In thousands) (Unaudited)
Three months ended December
31,
Twelve months ended December
31,
2020
2019
2020
2019
Operating Activities:
Net earnings
$
199,525
$
137,748
$
698,214
$
592,016
Adjustments to reconcile net earnings to
net cash from operating activities:
Provisions for losses (recoveries) on
accounts receivable
977
(454
)
5,584
(1
)
Deferred income tax expense
5,499
4,499
8,371
4,482
Stock compensation expense
17,407
12,182
62,498
61,543
Depreciation and amortization
14,339
12,494
56,959
50,950
Other, net
490
129
3,960
941
Changes in operating assets and
liabilities:
(Increase) decrease in accounts
receivable
(372,753
)
19,744
(647,193
)
265,919
Increase (decrease) in accounts payable
and accrued expenses
228,555
(40,788
)
430,495
(181,987
)
(Increase) decrease in deferred contract
costs
(89,560
)
261
(189,447
)
28,811
Increase (decrease) in contract
liabilities
105,455
(164
)
217,699
(37,097
)
Increase (decrease) in income taxes
payable, net
19,146
14,812
8,502
(18,472
)
Decrease (increase) in other, net
12,612
4,783
(630
)
4,830
Net cash from operating activities
141,692
165,246
655,012
771,935
Investing Activities:
Purchase of property and equipment
(10,124
)
(9,079
)
(47,543
)
(47,022
)
Other, net
553
(518
)
1,516
1,007
Net cash from investing activities
(9,571
)
(9,597
)
(46,027
)
(46,015
)
Financing Activities:
Proceeds from issuance of common stock
12,329
28,055
186,345
148,245
Repurchases of common stock
(18,162
)
(92,138
)
(332,387
)
(389,060
)
Dividends Paid
(88,114
)
(85,369
)
(174,929
)
(170,553
)
Payments for taxes related to net share
settlement of equity awards
—
—
(10,566
)
(6,674
)
Net cash from financing activities
(93,947
)
(149,452
)
(331,537
)
(418,042
)
Effect of exchange rate changes on cash
and cash equivalents
24,107
8,324
19,852
(1,122
)
Change in cash and cash equivalents
62,281
14,521
297,300
306,756
Cash and cash equivalents at beginning of
period
1,465,510
1,215,970
1,230,491
923,735
Cash and cash equivalents at end of
period
$
1,527,791
$
1,230,491
$
1,527,791
$
1,230,491
Taxes Paid:
Income taxes
$
59,607
$
25,914
$
239,849
$
222,083
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 December 31,
2020:
Revenues1
$
800,663
94,153
41,527
1,300,215
329,050
458,012
146,596
(1,028
)
3,169,188
Directly related cost of transportation
and other expenses2
$
460,288
60,625
23,422
1,103,063
256,677
325,878
111,179
(529
)
2,340,603
Salaries and other operating expenses3
$
245,721
26,367
11,894
96,498
40,251
101,631
24,905
(493
)
546,774
Operating income
$
94,654
7,161
6,211
100,654
32,122
30,503
10,512
(6
)
281,811
Identifiable assets at period end
$
2,532,324
186,204
85,085
876,856
272,106
752,589
240,984
(18,645
)
4,927,503
Capital expenditures
$
3,328
194
66
417
1,229
2,976
1,914
—
10,124
Depreciation and amortization
$
9,235
498
284
1,283
493
2,091
455
—
14,339
Equity
$
1,928,945
67,243
32,273
241,155
121,411
196,637
114,369
(38,806
)
2,663,227
For the three months ended December 31,
2019:
Revenues1
$
678,979
89,370
38,925
615,401
188,278
327,879
107,104
(995
)
2,044,941
Directly related cost of transportation
and other expenses2
$
386,114
54,372
23,148
495,267
137,231
227,248
75,813
(555
)
1,398,638
Salaries and other operating expenses3
$
223,703
25,371
14,170
62,813
30,154
83,734
26,459
(441
)
465,963
Operating income
$
69,162
9,627
1,607
57,321
20,893
16,897
4,832
1
180,340
Identifiable assets at period end
$
1,978,307
153,813
72,677
538,526
178,336
551,576
219,953
(1,304
)
3,691,884
Capital expenditures
$
5,122
844
485
600
323
1,216
489
—
9,079
Depreciation and amortization
$
7,581
494
324
1,227
449
1,945
474
—
12,494
Equity
$
1,521,059
65,100
29,148
247,725
94,727
159,308
114,726
(34,574
)
2,197,219
UNITED STATES
OTHER NORTH AMERICA
LATIN AMERICA
NORTH ASIA
SOUTH ASIA
EUROPE
MIDDLE EAST, AFRICA AND
INDIA
ELIMI- NATIONS
CONSOLI- DATED
For the twelve months ended December
31, 2020:
Revenues1
$
2,776,546
328,427
156,163
3,838,332
989,633
1,544,130
487,011
(3,761
)
10,116,481
Directly related cost of transportation
and other expenses2
$
1,568,461
192,875
93,249
3,157,086
738,648
1,080,741
359,682
(1,952
)
7,188,790
Salaries and other operating expenses3
$
877,117
100,687
48,114
332,978
149,269
375,900
104,968
(1,779
)
1,987,254
Operating income
$
330,968
34,865
14,800
348,268
101,716
87,489
22,361
(30
)
940,437
Identifiable assets at period end
$
2,532,324
186,204
85,085
876,856
272,106
752,589
240,984
(18,645
)
4,927,503
Capital expenditures
$
31,604
1,886
564
2,202
2,264
6,394
2,629
—
47,543
Depreciation and amortization
$
37,081
1,946
1,194
4,961
1,876
8,029
1,872
—
56,959
Equity
$
1,928,945
67,243
32,273
241,155
121,411
196,637
114,369
(38,806
)
2,663,227
For the twelve months ended December
31, 2019:
Revenues1
$
2,712,067
354,405
150,202
2,494,556
743,406
1,280,669
443,487
(3,366
)
8,175,426
Directly related cost of transportation
and other expenses2
$
1,528,815
212,369
87,297
1,970,662
544,873
884,968
311,997
(2,023
)
5,538,958
Salaries and other operating expenses3
$
859,946
101,654
55,512
271,594
127,478
342,073
112,844
(1,325
)
1,869,776
Operating income
$
323,306
40,382
7,393
252,300
71,055
53,628
18,646
(18
)
766,692
Identifiable assets at period end
$
1,978,307
153,813
72,677
538,526
178,336
551,576
219,953
(1,304
)
3,691,884
Capital expenditures
$
28,666
2,353
1,556
1,767
1,558
9,231
1,891
—
47,022
Depreciation and amortization
$
31,049
1,881
1,489
5,263
1,912
7,398
1,958
—
50,950
Equity
$
1,521,059
65,100
29,148
247,725
94,727
159,308
114,726
(34,574
)
2,197,219
1
In 2019, the Company revised its process
to record the transfer, between its geographic operating segments,
of revenues and the directly related cost of transportation and
other expenses for freight service transactions between Company
origin and destination locations. This change better aligns revenue
reporting with the location where the services are performed, as
well as the transactional reporting being developed as part of the
Company’s new accounting systems and processes. The change in
presentation had no impact on consolidated or segment operating
income. The 2019 results also include the effect of changing the
presentation of certain import services from a net to a gross
basis, which increased segment revenues and directly related
operating expenses but did not change operating income. The impact
of these changes on reported segment revenues was immaterial and
prior year segment revenues have not been revised.
2
Directly 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 Consolidated Statements of
Earnings.
3
Salaries and other operating expenses
totals Salaries and related, Rent and occupancy, Depreciation and
amortization, Selling and promotion and Other as shown in the
Consolidated Statements of Earnings.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210216005470/en/
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
Expeditors International... (NASDAQ:EXPD)
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From Apr 2024 to May 2024
Expeditors International... (NASDAQ:EXPD)
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From May 2023 to May 2024