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CORRECTING and REPLACING Expeditors Reports First Quarter 2023 EPS of $1.45

This press release is to correct and replace the previously issued press release to reflect the following.

The following footnote should read as follows:

During the three months ended March 31, 2023, we repurchased 2.0 million shares of common stock at an average price of $108.98 per share, compared to the three months ended March 31, 2022 when we did not repurchase any shares of common stock.

The prior version had incorrectly stated the following:

During the three months ended March 31, 2023, we repurchased 1,959 million shares of common stock at an average price of $108.98 per share, compared to the three months ended March 31, 2022 when we did not repurchase any shares of common stock.

The updated release reads:

EXPEDITORS REPORTS FIRST QUARTER 2023 EPS OF $1.45

Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced first quarter 2023 financial results including the following comparisons to the same quarter of 2022:

  • Diluted Net Earnings Attributable to Shareholders per share (EPS1) decreased 29% to $1.45
  • Net Earnings Attributable to Shareholders decreased 35% to $226 million
  • Operating Income decreased 40% to $276 million
  • Revenues decreased 44% to $2.6 billion
  • Airfreight tonnage volume decreased 6% and ocean container volume decreased 26%

“Operating conditions during the first quarter of 2023 were very similar to what we experienced in the fourth quarter of 2022, when shippers swiftly adapted to increased consumer caution and slowing demand for their products, while also battling inflation and tighter financing,” said Jeffrey S. Musser, President and Chief Executive Officer. “Our business continued to be impacted by comparatively soft demand, along with significantly reduced buy and sell rates relative to what we experienced during the pandemic. We are adapting and working diligently to bring expenses in line with lower revenue by lowering headcount and payroll expenses without resorting to layoffs.

“Following the steep drop in volumes and rates in the fourth quarter, the economic challenges continued to impact all of our businesses during the first quarter. With supply chains largely normalized, average sell rates in air fell ahead of declining buy rates, and tonnage also declined. Ocean volumes were lower and sell rates also fell faster than buy rates, while carrier capacity is no longer constrained and schedules have become more regular. Revenues in Customs Brokerage and Other Services also declined and expenses were significantly lower compared to a year ago because supply-chain congestion largely cleared and there were fewer costs incurred related to the February 2022 cyber-attack.

“Throughout our long history, we have demonstrated an ability to adapt to change. Wherever we look, there is uncertainty with the global economy and our industry is now very far removed from the pandemic days when capacity was extremely constrained and the ports were gridlocked. For the time being, everyone from ocean and air carriers to shippers are highly focused on everything impacting their bottom line, including the cost of moving goods.”

Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “We are adjusting well to the current operating environment of lower tonnage and volumes and unpredictable buy and sell rates, and we are working diligently to gain efficiencies and bring expenses in line with revenue. Compared to the year-ago period, which was significantly impacted by the February 2022 cyber-attack, salaries and related costs decreased 17% on lower commissions and bonuses as a result of lower revenues and operating income. Those cost decreases demonstrate the power behind our incentive-based compensation structure, which rewards our people when financial results are strong, and naturally incentivizes them to make adjustments based on volumes and improve efficiency when financial results are less robust. We continue to carefully monitor cash flow from operations, which exceeded $546 million in the first quarter of 2023, and we returned $213 million to shareholders via repurchases of common stock.”

____________________

1Diluted earnings attributable to shareholders per share.

NOTE: See Disclaimer on Forward-Looking Statements in this release.

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.

Disclaimer on Forward-Looking Statements:

Certain statements contained in this news release are “forward-looking statements,” based on management’s views with respect to future events and underlying assumptions that involve risks and uncertainties. These forward-looking statements include statements regarding our uncertain short-term outlook; a normalized supply chain; softening demand; pressure on buy and sell rates; an increasingly fragile global economy; rising inflation and financing costs; and signs of a slowing economy and drop in demand. Future financial performance could differ materially because of factors such as: our ability to leverage the strength of our carrier relationships; the strength of our non-asset-based operating model; our expectation that pressure on rates may continue; our ability to align expenses with revenues and to enhance our productivity; our ability to maintain our existing accounts and gain new business; our ability to invest in our strategic efforts to explore new areas for profitable growth; and our ability to remain a strong, healthy, unified and resilient organization. The normalizing of the supply chain at the end of the pandemic, along with the current uncertainty in the global economy, 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, 2022 and the Company’s most recent Form 10-Q. 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.

First Quarter 2023 Earnings Release, May 2, 2023

Financial Highlights for the three months ended March 31, 2023 and 2022 (Unaudited)

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

 

 

 

Three months ended March 31,

 

 

2023

 

2022

 

% Change

Revenues

 

$

2,592,589

 

 

$

4,664,298

 

 

(44)%

Directly related cost of transportation and other expenses 1

 

$

1,719,102

 

 

$

3,516,111

 

 

(51)%

Salaries and other operating expenses 2

 

$

597,518

 

 

$

686,427

 

 

(13)%

Operating income 3

 

$

275,969

 

 

$

461,760

 

 

(40)%

Net earnings attributable to shareholders

 

$

226,011

 

 

$

346,109

 

 

(35)%

Diluted earnings attributable to shareholders per share

 

$

1.45

 

 

$

2.05

 

 

(29)%

Basic earnings attributable to shareholders per share

 

$

1.47

 

 

$

2.07

 

 

(29)%

Diluted weighted average shares outstanding

 

 

155,472

 

 

 

169,216

 

 

 

Basic weighted average shares outstanding

 

 

154,164

 

 

 

167,499

 

 

 

____________________

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.

3Operating income in the first quarter 2022 includes $62 million in expenses incurred as a result of the Company's global systems downtime and investigation, recovery and remediation efforts caused by a targeted cyber-attack that occurred in that quarter.

During the three months ended March 31, 2023, we repurchased 2.0 million shares of common stock at an average price of $108.98 per share, compared to the three months ended March 31, 2022 when we did not repurchase any shares of common stock.

 

 

Employee Full-time Equivalents as of

 

 

March 31,

2023

 

December 31,

2022

 

March 31,

2022

North America

 

 

7,455

 

 

 

7,778

 

 

 

7,718

 

Europe

 

 

4,089

 

 

 

4,228

 

 

 

4,020

 

North Asia

 

 

2,385

 

 

 

2,448

 

 

 

2,511

 

South Asia

 

 

1,790

 

 

 

1,851

 

 

 

1,790

 

Middle East, Africa and India

 

 

1,502

 

 

 

1,540

 

 

 

1,527

 

Latin America

 

 

816

 

 

 

859

 

 

 

832

 

Information Systems

 

 

1,220

 

 

 

1,173

 

 

 

1,042

 

Corporate

 

 

424

 

 

 

425

 

 

 

427

 

Total

 

 

19,681

 

 

 

20,302

 

 

 

19,867

 

 

 

First quarter year-over-year percentage increase (decrease) in 1:

2023

 

Airfreight

kilos

 

Ocean freight

FEU

January

 

(27)%

 

(23)%

February

 

(10)%

 

(25)%

March

 

33%

 

(29)%

Quarter

 

(6)%

 

(26)%

____________________
1February and March 2022 air and ocean activity was significantly reduced due to the Company’s global systems downtime experienced as result of a cyber-attack that occurred in the first quarter 2022, affecting comparability with the first quarter 2023 results.
 
Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on May 5, 2023 will be considered in management's 8-K “Responses to Selected Questions.”

____________________

NOTE: See Disclaimer on Forward-Looking Statements in this release.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

 

 

 

March 31, 2023

 

December 31, 2022

Assets:

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,350,794

 

 

$

2,034,131

 

Accounts receivable, less allowance for credit loss of $8,358 at March 31, 2023 and $9,466 at December 31, 2022

 

 

1,604,467

 

 

 

2,107,645

 

Deferred contract costs

 

 

195,670

 

 

 

257,545

 

Other

 

 

106,080

 

 

 

118,696

 

Total current assets

 

 

4,257,011

 

 

 

4,518,017

 

Property and equipment, less accumulated depreciation and amortization $577,841 at March 31, 2023 and $567,757 at December 31, 2022

 

 

500,482

 

 

 

501,916

 

Operating lease right-of-use assets

 

 

509,019

 

 

 

507,503

 

Goodwill

 

 

7,927

 

 

 

7,927

 

Deferred federal and state income taxes, net

 

 

38,093

 

 

 

37,449

 

Other assets, net

 

 

20,045

 

 

 

17,622

 

Total assets

 

$

5,332,577

 

 

$

5,590,434

 

Liabilities:

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

950,907

 

 

$

1,108,996

 

Accrued expenses, primarily salaries and related costs

 

 

432,816

 

 

 

479,262

 

Contract liabilities

 

 

244,667

 

 

 

323,101

 

Current portion of operating lease liabilities

 

 

98,469

 

 

 

95,621

 

Federal, state and foreign income taxes

 

 

33,197

 

 

 

47,075

 

Total current liabilities

 

 

1,760,056

 

 

 

2,054,055

 

Noncurrent portion of operating lease liabilities

 

 

422,153

 

 

 

422,844

 

Commitments and contingencies

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

Preferred stock, none issued

 

 

 

 

 

 

Common stock, par value $0.01 per share. Issued and outstanding: 152,712 shares at March 31, 2023 and 154,313 shares at December 31, 2022

 

 

1,527

 

 

 

1,543

 

Additional paid-in capital

 

 

 

 

 

139

 

Retained earnings

 

 

3,336,140

 

 

 

3,310,892

 

Accumulated other comprehensive loss

 

 

(190,498

)

 

 

(202,553

)

Total shareholders’ equity

 

 

3,147,169

 

 

 

3,110,021

 

Noncontrolling interest

 

 

3,199

 

 

 

3,514

 

Total equity

 

 

3,150,368

 

 

 

3,113,535

 

Total liabilities and equity

 

$

5,332,577

 

 

$

5,590,434

 

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Earnings

(In thousands, except per share data)

(Unaudited)

 

 

 

Three months ended March 31,

 

 

2023

 

2022

Revenues:

 

 

 

 

 

 

Airfreight services

 

$

904,903

 

 

$

1,598,555

 

Ocean freight and ocean services

 

 

697,307

 

 

 

1,976,246

 

Customs brokerage and other services

 

 

990,379

 

 

 

1,089,497

 

Total revenues

 

 

2,592,589

 

 

 

4,664,298

 

Operating Expenses:

 

 

 

 

 

 

Airfreight services

 

 

666,022

 

 

 

1,142,546

 

Ocean freight and ocean services

 

 

483,682

 

 

 

1,600,243

 

Customs brokerage and other services

 

 

569,398

 

 

 

773,322

 

Salaries and related

 

 

449,848

 

 

 

538,940

 

Rent and occupancy

 

 

57,632

 

 

 

50,928

 

Depreciation and amortization

 

 

15,261

 

 

 

12,975

 

Selling and promotion

 

 

6,384

 

 

 

4,048

 

Other

 

 

68,393

 

 

 

79,536

 

Total operating expenses

 

 

2,316,620

 

 

 

4,202,538

 

Operating income

 

 

275,969

 

 

 

461,760

 

Other Income (Expense):

 

 

 

 

 

 

Interest income

 

 

18,775

 

 

 

1,892

 

Interest expense

 

 

(2,645

)

 

 

(503

)

Other, net

 

 

8,479

 

 

 

8,030

 

Other income (expense), net

 

 

24,609

 

 

 

9,419

 

Earnings before income taxes

 

 

300,578

 

 

 

471,179

 

Income tax expense

 

 

74,580

 

 

 

121,699

 

Net earnings

 

 

225,998

 

 

 

349,480

 

Less net (losses) earnings attributable to the noncontrolling interest

 

 

(13

)

 

 

3,371

 

Net earnings attributable to shareholders

 

$

226,011

 

 

$

346,109

 

Diluted earnings attributable to shareholders per share

 

$

1.45

 

 

$

2.05

 

Basic earnings attributable to shareholders per share

 

$

1.47

 

 

$

2.07

 

Weighted average diluted shares outstanding

 

 

155,472

 

 

 

169,216

 

Weighted average basic shares outstanding

 

 

154,164

 

 

 

167,499

 

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

For the three months ended March 31,

 

 

2023

 

2022

Operating Activities:

 

 

 

 

 

 

Net earnings

 

$

225,998

 

 

$

349,480

 

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

 

 

 

 

 

 

Provisions for losses (recoveries) on accounts receivable

 

 

1,072

 

 

 

(416

)

Deferred income tax expense (benefit)

 

 

2,036

 

 

 

(3,236

)

Stock compensation expense

 

 

12,488

 

 

 

11,603

 

Depreciation and amortization

 

 

15,261

 

 

 

12,975

 

Other, net

 

 

1,159

 

 

 

455

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Decrease (increase) in accounts receivable

 

 

508,606

 

 

 

(132,348

)

(Decrease) increase in accounts payable and accrued liabilities

 

 

(202,923

)

 

 

140,191

 

Decrease in deferred contract costs

 

 

67,621

 

 

 

173,930

 

Decrease in contract liabilities

 

 

(84,447

)

 

 

(193,357

)

Increase in income taxes payable, net

 

 

91

 

 

 

46,259

 

(Increase) decrease in other, net

 

 

(550

)

 

 

8,410

 

Net cash from operating activities

 

 

546,412

 

 

 

413,946

 

Investing Activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(10,126

)

 

 

(14,412

)

Other, net

 

 

575

 

 

 

79

 

Net cash from investing activities

 

 

(9,551

)

 

 

(14,333

)

Financing Activities:

 

 

 

 

 

 

Payments on borrowings on lines of credit

 

 

(26,402

)

 

 

(3,102

)

Proceeds from borrowings on lines of credit

 

 

11,495

 

 

 

22,592

 

Proceeds from issuance of common stock

 

 

9,288

 

 

 

5,751

 

Repurchases of common stock

 

 

(213,502

)

 

 

 

Payments for taxes related to net share settlement of equity awards

 

 

(7,445

)

 

 

(7,482

)

Net cash from financing activities

 

 

(226,566

)

 

 

17,759

 

Effect of exchange rate changes on cash and cash equivalents

 

 

6,368

 

 

 

(6,438

)

Change in cash and cash equivalents

 

 

316,663

 

 

 

410,934

 

Cash and cash equivalents at beginning of period

 

 

2,034,131

 

 

 

1,728,692

 

Cash and cash equivalents at end of period

 

$

2,350,794

 

 

$

2,139,626

 

Taxes Paid:

 

 

 

 

 

 

Income taxes

 

$

70,786

 

 

$

77,960

 

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, 2023:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

945,494

 

 

 

109,850

 

 

 

54,695

 

 

 

582,421

 

 

 

224,127

 

 

 

534,464

 

 

 

142,703

 

 

 

(1,165

)

 

 

2,592,589

 

Directly related cost of transportation and other expenses1

 

$

539,957

 

 

 

69,205

 

 

 

32,302

 

 

 

452,342

 

 

 

157,623

 

 

 

372,260

 

 

 

95,949

 

 

 

(536

)

 

 

1,719,102

 

Salaries and other operating expenses2

 

$

267,683

 

 

 

35,824

 

 

 

19,502

 

 

 

71,140

 

 

 

46,798

 

 

 

127,372

 

 

 

29,832

 

 

 

(633

)

 

 

597,518

 

Operating income (loss)

 

$

137,854

 

 

 

4,821

 

 

 

2,891

 

 

 

58,939

 

 

 

19,706

 

 

 

34,832

 

 

 

16,922

 

 

 

4

 

 

 

275,969

 

Identifiable assets at period end

 

$

3,005,502

 

 

 

206,459

 

 

 

119,334

 

 

 

633,970

 

 

 

284,028

 

 

 

844,049

 

 

 

254,458

 

 

 

(15,223

)

 

 

5,332,577

 

Capital expenditures

 

$

5,444

 

 

 

469

 

 

 

230

 

 

 

590

 

 

 

167

 

 

 

2,983

 

 

 

243

 

 

 

 

 

 

10,126

 

Equity

 

$

2,284,489

 

 

 

35,977

 

 

 

57,026

 

 

 

317,325

 

 

 

153,321

 

 

 

191,116

 

 

 

154,143

 

 

 

(43,029

)

 

 

3,150,368

 

For the three months ended

March 31, 2022:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

1,241,224

 

 

 

104,610

 

 

 

57,707

 

 

 

1,769,016

 

 

 

646,329

 

 

 

575,791

 

 

 

270,681

 

 

 

(1,060

)

 

 

4,664,298

 

Directly related cost of transportation and other expenses1

 

$

763,423

 

 

 

64,232

 

 

 

33,857

 

 

 

1,480,093

 

 

 

538,883

 

 

 

417,620

 

 

 

218,100

 

 

 

(97

)

 

 

3,516,111

 

Salaries and other operating expenses2

 

$

333,649

 

 

 

24,869

 

 

 

13,101

 

 

 

123,113

 

 

 

45,329

 

 

 

109,269

 

 

 

38,042

 

 

 

(945

)

 

 

686,427

 

Operating income

 

$

144,152

 

 

 

15,509

 

 

 

10,749

 

 

 

165,810

 

 

 

62,117

 

 

 

48,902

 

 

 

14,539

 

 

 

(18

)

 

 

461,760

 

Identifiable assets at period end

 

$

4,199,798

 

 

 

283,674

 

 

 

147,391

 

 

 

1,329,469

 

 

 

591,672

 

 

 

1,076,451

 

 

 

358,722

 

 

 

(31,184

)

 

 

7,955,993

 

Capital expenditures

 

$

9,477

 

 

 

1,078

 

 

 

109

 

 

 

531

 

 

 

290

 

 

 

2,058

 

 

 

869

 

 

 

 

 

 

14,412

 

Equity

 

$

2,753,888

 

 

 

108,208

 

 

 

52,188

 

 

 

337,802

 

 

 

189,168

 

 

 

317,436

 

 

 

133,250

 

 

 

(42,609

)

 

 

3,849,331

 

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 Condensed 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 Condensed Consolidated Statements of Earnings.

 

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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