Expeditors Reports Second Quarter 2019 EPS of $0.88

SEATTLE--()--Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced second quarter 2019 financial results including the following highlights compared to the same quarter of 2018:

  • Diluted Net Earnings Attributable to Shareholders per share (EPS1) increased 11% to $0.88
  • Net Earnings Attributable to Shareholders increased 9% to $153 million
  • Operating Income increased 5% to $192 million
  • Revenues increased 4% to $2 billion
  • Net Revenues2 increased 3% to $662 million
  • Airfreight tonnage volume decreased 5% and ocean container volume increased 2%

During the quarter and throughout the first half of the year, we have shown our ability to manage uncertainty and deliver profitable growth,” said Jeffrey S. Musser, President and Chief Executive Officer. “While our air freight business was challenged as a result of a slowdown in export volumes out of North Asia and the United States, we continued to enhance our efforts on growing these two important markets as a focus of our key strategic initiatives. Additionally, the current climate of geopolitical volatility has created uncertainty, but our organization continues to show that the strength of our global presence and customer focus has never been more important in our relentless drive to grow while maintaining our profitability.

In addition, we continued to grow our customs brokerage and import services, Transcon, and warehouse and distribution services by winning business with new customers as well as from existing accounts. For a second consecutive quarter, we increased the volume of ocean freight containers that we handled and boosted net revenue per container. Except for comparatively soft demand in certain air markets, this was a strong quarter and our people performed at their highest level.”

Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “We grew net revenues ahead of overhead expenses, even as we continue to make important investments in people and systems, such as our integrated order management, quoting, booking, visibility, security, reporting and analytics platform. While we boosted operating efficiency (operating income as a percentage of net revenue) compared to the first quarter, it remained below our target 30%, due again to lower air freight net revenues. Our effective tax rate declined from 25.8% in the second quarter of 2018 to 23.6% in 2019, largely due to the benefit from Foreign-derived intangible income deductions and a state tax refund."

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.

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.

Second Quarter 2019 Earnings Release, August 6, 2019

Financial Highlights for the three and six months ended June 30, 2019 and 2018 (Unaudited)

(in 000's of US dollars except per share data)

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

2019

 

 

2018

 

 

%

Change

 

2019

 

 

2018

 

 

%

Change

Revenues

 

$

2,035,579

 

 

$

1,957,559

 

 

4%

 

$

4,055,630

 

 

$

3,811,821

 

 

6%

Net revenues1

 

$

661,695

 

 

$

642,546

 

 

3%

 

$

1,315,809

 

 

$

1,278,384

 

 

3%

Operating income

 

$

192,201

 

 

$

183,584

 

 

5%

 

$

379,802

 

 

$

376,402

 

 

1%

Net earnings attributable to shareholders

 

$

153,149

 

 

$

140,605

 

 

9%

 

$

292,848

 

 

$

276,297

 

 

6%

Diluted earnings attributable to shareholders per share

 

$

0.88

 

 

$

0.79

 

 

11%

 

$

1.67

 

 

$

1.54

 

 

8%

Basic earnings attributable to shareholders per share

 

$

0.90

 

 

$

0.80

 

 

13%

 

$

1.71

 

 

$

1.58

 

 

8%

Diluted weighted average shares outstanding

 

 

174,466

 

 

 

178,603

 

 

 

 

 

174,953

 

 

 

179,120

 

 

 

Basic weighted average shares outstanding

 

 

171,003

 

 

 

174,754

 

 

 

 

 

171,425

 

 

 

175,324

 

 

 

___________________

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.

The three and six months ended June 30, 2019 include the effect of changing our presentation of certain import services from a net to a gross basis and our revised presentation of destination services, which increased revenues and directly related operating expenses in customs brokerage and other services but did not change net revenues.

During the three and six months ended June 30, 2019, we repurchased 2.6 million and 3.2 million shares of common stock at an average price of $73.03 and $73.47 per share, respectively. During the three and six months ended June 30, 2018, we repurchased 3.1 million and 5.8 million shares of common stock at an average price of $76.22 and $70.92 per share, respectively.

 

Employee Full-time Equivalents June 30, 2019

 

 

2019

 

 

2018

 

North America

 

6,893

 

 

 

6,414

 

Europe

 

3,439

 

 

 

3,205

 

North Asia

 

2,532

 

 

 

2,616

 

South Asia

 

1,661

 

 

 

1,604

 

Middle East, Africa and India

 

1,550

 

 

 

1,466

 

Latin America

 

873

 

 

 

801

 

Information Systems

 

922

 

 

 

892

 

Corporate

 

379

 

 

 

351

 

Total

 

18,249

 

 

 

17,349

 

 

 

Second quarter
year-over-year percentage
increase (decrease) in:

 

 

Airfreight
kilos

 

Ocean freight
FEU

2019

 

 

 

 

April

 

(4

)%

 

5

%

May

 

(2

)%

 

%

June

 

(7

)%

 

%

Quarter

 

(5

)%

 

2

%

___________________

Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on August 9, 2019 will be considered in management's 8-K “Responses to Selected Questions.”

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 our ability to extract value from investment in key systems; the impact of the 2017 Tax Act and related interpretations on our effective tax rate; and 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)

 

 

 

June 30,
2019

 

 

December 31,
2018

 

Assets:

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,082,650

 

 

$

923,735

 

Accounts receivable, less allowance for doubtful accounts of $13,391 at June 30, 2019 and $15,345 at December 31, 2018

 

 

1,382,070

 

 

 

1,581,530

 

Deferred contract costs

 

 

143,651

 

 

 

159,510

 

Other

 

 

103,089

 

 

 

70,041

 

Total current assets

 

 

2,711,460

 

 

 

2,734,816

 

Property and equipment, less accumulated depreciation and amortization of $465,983 at June 30, 2019 and $446,977 at December 31, 2018

 

 

499,233

 

 

 

504,105

 

Operating lease right-of-use assets

 

 

377,423

 

 

 

 

Goodwill

 

 

7,927

 

 

 

7,927

 

Deferred federal and state income taxes, net

 

 

33,617

 

 

 

40,465

 

Other assets, net

 

 

17,330

 

 

 

27,246

 

Total assets

 

$

3,646,990

 

 

$

3,314,559

 

Liabilities:

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

811,144

 

 

$

902,259

 

Accrued expenses, primarily salaries and related costs

 

 

217,463

 

 

 

215,813

 

Contract liabilities

 

 

169,055

 

 

 

190,343

 

Current portion of operating lease liabilities

 

 

61,267

 

 

 

 

Federal, state and foreign income taxes

 

 

19,891

 

 

 

18,424

 

Total current liabilities

 

 

1,278,820

 

 

 

1,326,839

 

Noncurrent portion of operating lease liabilities

 

 

315,776

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

 

 

Preferred stock, none issued

 

 

 

 

 

 

Common stock, par value $0.01 per share. Issued and outstanding: 170,040 shares at June 30, 2019 and 171,582 shares at December 31, 2018

 

 

1,701

 

 

 

1,716

 

Additional paid-in capital

 

 

12,433

 

 

 

1,896

 

Retained earnings

 

 

2,140,935

 

 

 

2,088,707

 

Accumulated other comprehensive loss

 

 

(104,096

)

 

 

(105,481

)

Total shareholders’ equity

 

 

2,050,973

 

 

 

1,986,838

 

Noncontrolling interest

 

 

1,421

 

 

 

882

 

Total equity

 

 

2,052,394

 

 

 

1,987,720

 

Total liabilities and equity

 

$

3,646,990

 

 

$

3,314,559

 

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

 

Condensed Consolidated Statements of Earnings

(In thousands, except per share data)

(Unaudited)

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Airfreight services

$

741,577

 

 

$

801,761

 

 

$

1,456,478

 

 

$

1,532,988

 

Ocean freight and ocean services

 

543,809

 

 

 

530,008

 

 

 

1,112,450

 

 

 

1,050,891

 

Customs brokerage and other services

 

750,193

 

 

 

625,790

 

 

 

1,486,702

 

 

 

1,227,942

 

Total revenues

 

2,035,579

 

 

 

1,957,559

 

 

 

4,055,630

 

 

 

3,811,821

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Airfreight services

 

542,639

 

 

 

593,325

 

 

 

1,051,849

 

 

 

1,106,829

 

Ocean freight and ocean services

 

390,299

 

 

 

385,156

 

 

 

810,630

 

 

 

764,574

 

Customs brokerage and other services

 

440,946

 

 

 

336,532

 

 

 

877,342

 

 

 

662,034

 

Salaries and related

 

356,351

 

 

 

350,948

 

 

 

713,261

 

 

 

690,843

 

Rent and occupancy

 

40,897

 

 

 

38,071

 

 

 

82,420

 

 

 

74,984

 

Depreciation and amortization

 

12,677

 

 

 

13,576

 

 

 

26,070

 

 

 

27,498

 

Selling and promotion

 

11,643

 

 

 

10,788

 

 

 

22,719

 

 

 

21,753

 

Other

 

47,926

 

 

 

45,579

 

 

 

91,537

 

 

 

86,904

 

Total operating expenses

 

1,843,378

 

 

 

1,773,975

 

 

 

3,675,828

 

 

 

3,435,419

 

Operating income

 

192,201

 

 

 

183,584

 

 

 

379,802

 

 

 

376,402

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

6,516

 

 

 

5,153

 

 

 

12,622

 

 

 

9,467

 

Other, net

 

2,262

 

 

 

1,167

 

 

 

3,927

 

 

 

1,791

 

Other income (expense), net

 

8,778

 

 

 

6,320

 

 

 

16,549

 

 

 

11,258

 

Earnings before income taxes

 

200,979

 

 

 

189,904

 

 

 

396,351

 

 

 

387,660

 

Income tax expense

 

47,449

 

 

 

48,958

 

 

 

102,710

 

 

 

110,514

 

Net earnings

 

153,530

 

 

 

140,946

 

 

 

293,641

 

 

 

277,146

 

Less net earnings attributable to the noncontrolling interest

 

381

 

 

 

341

 

 

 

793

 

 

 

849

 

Net earnings attributable to shareholders

$

153,149

 

 

$

140,605

 

 

$

292,848

 

 

$

276,297

 

Diluted earnings attributable to shareholders per share

$

0.88

 

 

$

0.79

 

 

$

1.67

 

 

$

1.54

 

Basic earnings attributable to shareholders per share

$

0.90

 

 

$

0.80

 

 

$

1.71

 

 

$

1.58

 

Weighted average diluted shares outstanding

 

174,466

 

 

 

178,603

 

 

 

174,953

 

 

 

179,120

 

Weighted average basic shares outstanding

 

171,003

 

 

 

174,754

 

 

 

171,425

 

 

 

175,324

 

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

 

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

153,530

 

 

$

140,946

 

 

$

293,641

 

 

$

277,146

 

Adjustments to reconcile net earnings to net cash from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provisions for losses (recoveries) on accounts receivable

 

 

1,584

 

 

 

528

 

 

 

(304

)

 

 

263

 

Deferred income tax expense

 

 

3,697

 

 

 

3,235

 

 

 

5,805

 

 

 

6,088

 

Stock compensation expense

 

 

23,824

 

 

 

18,002

 

 

 

37,206

 

 

 

29,269

 

Depreciation and amortization

 

 

12,677

 

 

 

13,576

 

 

 

26,070

 

 

 

27,498

 

Other, net

 

 

(29

)

 

 

56

 

 

 

160

 

 

 

104

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

(28,187

)

 

 

(46,876

)

 

 

202,290

 

 

 

53,771

 

Increase (decrease) in accounts payable and accrued expenses

 

 

39,900

 

 

 

58,075

 

 

 

(82,383

)

 

 

12,231

 

(Increase) decrease in deferred contract costs

 

 

(13,010

)

 

 

(20,019

)

 

 

18,249

 

 

 

(16,612

)

Increase (decrease) in contract liabilities

 

 

13,003

 

 

 

20,294

 

 

 

(23,722

)

 

 

12,893

 

(Decrease) increase in income taxes payable, net

 

 

(49,606

)

 

 

(38,059

)

 

 

(32,613

)

 

 

(18,550

)

(Decrease) increase in other, net

 

 

(1,676

)

 

 

(1,202

)

 

 

791

 

 

 

(68

)

Net cash from operating activities

 

 

155,707

 

 

 

148,556

 

 

 

445,190

 

 

 

384,033

 

Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(12,987

)

 

 

(12,113

)

 

 

(22,422

)

 

 

(25,909

)

Other, net

 

 

1,038

 

 

 

(1,564

)

 

 

1,293

 

 

 

(1,995

)

Net cash from investing activities

 

 

(11,949

)

 

 

(13,677

)

 

 

(21,129

)

 

 

(27,904

)

Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

32,287

 

 

 

95,363

 

 

 

59,477

 

 

 

121,760

 

Repurchases of common stock

 

 

(190,589

)

 

 

(235,572

)

 

 

(234,923

)

 

 

(407,932

)

Dividends Paid

 

 

(85,184

)

 

 

(79,180

)

 

 

(85,184

)

 

 

(79,180

)

Payments for taxes related to net share settlement of equity awards

 

 

(6,674

)

 

 

(3,215

)

 

 

(6,674

)

 

 

(3,215

)

Net cash from financing activities

 

 

(250,160

)

 

 

(222,604

)

 

 

(267,304

)

 

 

(368,567

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(377

)

 

 

(24,322

)

 

 

2,158

 

 

 

(17,807

)

Change in cash and cash equivalents

 

 

(106,779

)

 

 

(112,047

)

 

 

158,915

 

 

 

(30,245

)

Cash and cash equivalents at beginning of period

 

 

1,189,429

 

 

 

1,132,901

 

 

 

923,735

 

 

 

1,051,099

 

Cash and cash equivalents at end of period

 

$

1,082,650

 

 

$

1,020,854

 

 

$

1,082,650

 

 

$

1,020,854

 

Taxes Paid:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

$

97,715

 

 

$

85,612

 

 

$

134,968

 

 

$

124,131

 

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 June 30, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues2

 

$

681,076

 

 

 

85,537

 

 

 

38,757

 

 

 

621,951

 

 

 

181,380

 

 

 

319,331

 

 

 

108,311

 

 

 

(764

)

 

 

2,035,579

 

Net revenues1

 

$

294,983

 

 

 

35,201

 

 

 

16,714

 

 

 

134,397

 

 

 

48,893

 

 

 

98,655

 

 

 

33,222

 

 

 

(370

)

 

 

661,695

 

Operating income

 

$

87,923

 

 

 

8,858

 

 

 

2,346

 

 

 

64,453

 

 

 

15,513

 

 

 

9,315

 

 

 

3,799

 

 

 

(6

)

 

 

192,201

 

Identifiable assets at period end

 

$

1,819,718

 

 

 

176,151

 

 

 

73,197

 

 

 

580,311

 

 

 

193,771

 

 

 

581,518

 

 

 

229,692

 

 

 

(7,368

)

 

 

3,646,990

 

Capital expenditures

 

$

8,985

 

 

 

768

 

 

 

145

 

 

 

300

 

 

 

428

 

 

 

1,914

 

 

 

447

 

 

 

 

 

 

12,987

 

Depreciation and amortization

 

$

7,687

 

 

 

459

 

 

 

380

 

 

 

1,384

 

 

 

496

 

 

 

1,775

 

 

 

496

 

 

 

 

 

 

12,677

 

Equity

 

$

1,303,381

 

 

 

83,417

 

 

 

31,014

 

 

 

282,192

 

 

 

107,229

 

 

 

168,570

 

 

 

109,790

 

 

 

(33,199

)

 

 

2,052,394

 

For the three months ended June 30, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues2

 

$

598,076

 

 

 

84,244

 

 

 

42,618

 

 

 

680,227

 

 

 

179,528

 

 

 

330,775

 

 

 

114,005

 

 

 

(71,914

)

 

 

1,957,559

 

Net revenues1

 

$

271,880

 

 

 

34,749

 

 

 

15,923

 

 

 

140,583

 

 

 

44,886

 

 

 

102,371

 

 

 

33,125

 

 

 

(971

)

 

 

642,546

 

Operating income

 

$

63,628

 

 

 

10,077

 

 

 

2,701

 

 

 

70,359

 

 

 

13,374

 

 

 

16,958

 

 

 

6,490

 

 

 

(3

)

 

 

183,584

 

Identifiable assets at period end

 

$

1,488,060

 

 

 

153,827

 

 

 

54,186

 

 

 

540,954

 

 

 

157,479

 

 

 

526,607

 

 

 

217,716

 

 

 

(5,997

)

 

 

3,132,832

 

Capital expenditures

 

$

6,032

 

 

 

2,191

 

 

 

167

 

 

 

559

 

 

 

695

 

 

 

1,225

 

 

 

1,244

 

 

 

 

 

 

12,113

 

Depreciation and amortization

 

$

8,447

 

 

 

473

 

 

 

395

 

 

 

1,303

 

 

 

542

 

 

 

1,955

 

 

 

461

 

 

 

 

 

 

13,576

 

Equity

 

$

1,196,226

 

 

 

56,702

 

 

 

26,625

 

 

 

250,513

 

 

 

112,259

 

 

 

157,493

 

 

 

127,032

 

 

 

(34,291

)

 

 

1,892,559

 

 

 

 

UNITED

STATES

 

 

OTHER

NORTH

AMERICA

 

 

LATIN

AMERICA

 

 

NORTH

ASIA

 

 

SOUTH

ASIA

 

 

EUROPE

 

 

MIDDLE

EAST,

AFRICA

AND

INDIA

 

 

ELIMI-
NATIONS

 

 

CONSOLI-
DATED

 

For the six months ended June 30, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues2

 

$

1,340,859

 

 

 

176,947

 

 

 

72,936

 

 

 

1,254,804

 

 

 

358,559

 

 

 

632,021

 

 

 

220,986

 

 

 

(1,482

)

 

 

4,055,630

 

Net revenues1

 

$

587,412

 

 

 

70,370

 

 

 

31,777

 

 

 

268,604

 

 

 

96,262

 

 

 

195,450

 

 

 

66,394

 

 

 

(460

)

 

 

1,315,809

 

Operating income

 

$

161,936

 

 

 

19,818

 

 

 

4,982

 

 

 

130,233

 

 

 

31,420

 

 

 

23,267

 

 

 

8,160

 

 

 

(14

)

 

 

379,802

 

Identifiable assets at period end

 

$

1,819,718

 

 

 

176,151

 

 

 

73,197

 

 

 

580,311

 

 

 

193,771

 

 

 

581,518

 

 

 

229,692

 

 

 

(7,368

)

 

 

3,646,990

 

Capital expenditures

 

$

15,900

 

 

 

996

 

 

 

238

 

 

 

644

 

 

 

604

 

 

 

2,896

 

 

 

1,144

 

 

 

 

 

 

22,422

 

Depreciation and amortization

 

$

15,909

 

 

 

926

 

 

 

812

 

 

 

2,791

 

 

 

1,032

 

 

 

3,606

 

 

 

994

 

 

 

 

 

 

26,070

 

Equity

 

$

1,303,381

 

 

 

83,417

 

 

 

31,014

 

 

 

282,192

 

 

 

107,229

 

 

 

168,570

 

 

 

109,790

 

 

 

(33,199

)

 

 

2,052,394

 

For the six months ended June 30, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues2

 

$

1,161,826

 

 

 

164,331

 

 

 

78,727

 

 

 

1,316,816

 

 

 

354,678

 

 

 

650,755

 

 

 

224,542

 

 

 

(139,854

)

 

 

3,811,821

 

Net revenues1

 

$

549,065

 

 

 

65,196

 

 

 

30,668

 

 

 

277,791

 

 

 

89,292

 

 

 

201,006

 

 

 

66,326

 

 

 

(960

)

 

 

1,278,384

 

Operating income

 

$

133,276

 

 

 

19,095

 

 

 

5,071

 

 

 

140,282

 

 

 

28,506

 

 

 

36,236

 

 

 

13,928

 

 

 

8

 

 

 

376,402

 

Identifiable assets at period end

 

$

1,488,060

 

 

 

153,827

 

 

 

54,186

 

 

 

540,954

 

 

 

157,479

 

 

 

526,607

 

 

 

217,716

 

 

 

(5,997

)

 

 

3,132,832

 

Capital expenditures

 

$

9,203

 

 

 

3,719

 

 

 

672

 

 

 

1,343

 

 

 

1,024

 

 

 

8,416

 

 

 

1,532

 

 

 

 

 

 

25,909

 

Depreciation and amortization

 

$

17,212

 

 

 

871

 

 

 

763

 

 

 

2,679

 

 

 

1,125

 

 

 

3,931

 

 

 

917

 

 

 

 

 

 

27,498

 

Equity

 

$

1,196,226

 

 

 

56,702

 

 

 

26,625

 

 

 

250,513

 

 

 

112,259

 

 

 

157,493

 

 

 

127,032

 

 

 

(34,291

)

 

 

1,892,559

 

1Net revenues are a non-GAAP measure calculated as revenues less directly related operating expenses attributable to the Company's principal services. The Company's management believes that net revenues are a better measure than total revenues when evaluating the Company's operating segment performance since total revenues earned as a freight consolidator include the carriers' charges for carrying the shipment, whereas revenues earned in other capacities include primarily the commissions and fees earned by the Company. Net revenue is one of the Company's primary operational and financial measures and demonstrates the Company's ability to concentrate and leverage purchasing power through effective consolidation of shipments from customers utilizing a variety of transportation carriers and optimal routings.

 

2In 2019, the Company revised its process to record the transfer, between its geographic operating segments, of revenues and the directly related cost of transportation 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. Prior year segment revenues have not been revised. The change in presentation had no impact on consolidated or segment net revenues or operating income. The impact on reported segment revenues and expenses was immaterial.

The following table presents the calculation of net revenues:

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenues

 

$

2,035,579

 

 

$

1,957,559

 

 

$

4,055,630

 

 

$

3,811,821

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Airfreight services

 

 

542,639

 

 

 

593,325

 

 

 

1,051,849

 

 

 

1,106,829

 

Ocean freight and ocean services

 

 

390,299

 

 

 

385,156

 

 

 

810,630

 

 

 

764,574

 

Customs brokerage and other services

 

 

440,946

 

 

 

336,532

 

 

 

877,342

 

 

 

662,034

 

Net revenues

 

$

661,695

 

 

$

642,546

 

 

$

1,315,809

 

 

$

1,278,384

 

 

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

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