HOUSTON, Feb. 18 /PRNewswire-FirstCall/ --
Financial Highlights
-- Gross revenues improved 14%, led by 40% growth in Asia
-- Operating income improves to $11.7 million in Q4-2002 from
$3.5 million in Q4-2001
-- Net income improves to $6.7 million in Q4-2002 from $821,000
in Q4-2001
-- DSO (days sales outstanding) improves to 70 days -- the best level
in Company history
Quarter Ended Year Ended
$ thousands 12/31/02 12/31/01 12/31/02 12/31/01
Gross revenues $485,791 $425,482 $1,680,283 $1,671,994
Net revenues $183,537 $167,517 $672,132 $644,183
Net revenue margin 37.8% 39.4% 40.0% 38.5%
Operating expenses $171,883 $164,041 $642,460 $701,752
Operating income/(loss) $11,654 $3,476 $29,672 $(57,569)
Net income/(loss) $6,666 $821 $9,434 $(40,177)
Diluted EPS $0.14 $0.02 $0.20 $(0.84)
EGL, Inc. (Nasdaq: EAGL) announced that it earned $6.7 million of net
income for the three months ended December 31, 2002, compared to $821,000 in
the fourth quarter of 2001. Diluted earnings per share for the quarter were
$0.14 compared to $0.02 in Q4-2001.
Gross revenues improved 14% from the fourth quarter of 2001 to
$485.8 million on stronger activity levels from all product lines. As a
result of the U. S. West Coast port strike, EGL chartered 42 dedicated planes
to move product from Asia to North America. Net revenues of $183.5 million
were up 10% over the comparable quarter in 2001. Stronger air export,
brokerage and logistics activity was partially offset by tighter ocean export
margins. Net revenue margins were 37.8%, or 39.2% excluding the impact of the
42 dedicated charters, compared to 39.4% during Q4-2001.
EGL Chief Executive Officer, Jim Crane commented, "We are pleased with our
progress and have demonstrated that we can add quality revenues even during a
very difficult environment by developing creative solutions for our customers
that leverage our global infrastructure. While the global economies remain
lackluster and fourth quarter GDP in the United States grew less than 1%, we
were able to improve gross revenues by 14% to levels surpassed only by the
third and fourth quarters of 2000. Net revenues improved 10% to the second
highest level in the Company's history. Our Asia operations gained
recognition by responding with creative solutions to help new and existing
customers meet the challenges presented by the U.S. West Coast port strike.
These solutions are expected to lead to additional opportunities this year.
Our net revenue margins and continued improvements in days sales outstanding
are an indication that we continue to add quality revenues."
Airfreight gross revenues were up 12% for the fourth quarter to
$376.7 million on stronger Asia and North America activity. Airfreight net
revenues increased 10% to $112.9 million while net revenue margins were 30.0%
compared to 30.7% last year. Brokerage and logistics revenues were up 16%
from the fourth quarter of last year. Ocean gross revenues for the fourth
quarter were up 30% from a year ago while net revenues were down 9% due to
capacity constraints resulting from the U. S. West Coast port strike and a
shift in activity from direct to consolidations which carry lower margins.
Operating income for the quarter increased $8.2 million, to $11.7 million,
on the $16.0 million improvement in net revenues. EGL Chief Financial
Officer, Elijio Serrano commented, "We have set cost management goals to gain
leverage for improved profitability from our global infrastructure. We are
benchmarking our goals against Q1-2002 when we reduced our cost structure to
$155 million (excluding a $2.5 million benefit from temporary salary
reductions). Compared to our benchmark, gross revenues were up 30.6%, net
revenues were up 19.1% and operating expenses were up 10.9%. This is within
the range of our cost to revenue goals. We continue to work on further
streamlining our operations by focusing on operating efficiencies. The
operating efficiencies and leverage that we are gaining from the
infrastructure should allow us to continue to improve our profitability
without sacrificing our service capabilities."
Total Year 2002 Results
Gross revenues for the twelve months ended December 31, 2002 were
$1.7 billion, up $8.3 million from 2001. Net revenues were $672 million, an
increase of $27.9 million, or 4.3%, over 2001 as EGL was able to restructure
its domestic air network to make it a more flexible cost model. Net revenue
margins for 2002 were 40.0% compared to 38.5% in the prior year.
Net income was $9.4 million in 2002 compared to a loss of $40.2 million
last year. Diluted earnings per share for 2002 were $0.20 compared to a loss
in 2001 of $0.84 per share. Full year 2002 results include after tax charges
of $4.5 million to write-off EGL's investment in Miami Air and $3.5 million of
restructuring related charges on abandoned facilities. These were partially
offset by $5.4 million after tax proceeds from the Department of
Transportation under the Air Transportation Safety and System Stabilization
Act. Full year 2001 results include after tax charges of $8.5 million of
restructuring related charges and $6.1 million for settlement of an EEOC
claim.
Cash and equivalents increased $42 million in the year after outlays of
$10 million for the repurchase of Company shares. The cash was generated by
improved operating results, including a further reduction in working capital
from 2001. DSO at year-end 2002 was reduced by eight days from December 2001
and is at the best level in the Company's history.
Expectations for 2003
Based on expectations of a stable economy and environment, EGL expects
first quarter gross revenues to range from $435 to $445 million -- a
projected growth of 17-20% over Q1-2002. Diluted earnings per share are
anticipated to be $0.04-$0.06, compared to a loss in the quarter last year of
$0.08 per diluted share (which includes a $0.09 per share charge on its
investment in Miami Air).
For full year 2003, EGL expects diluted earnings per share of $0.65 to
$0.75 with gross revenues for the year between $1.83 billion and
$1.87 billion, a growth rate of 9-11%.
Earnings Conference Call
EGL, Inc. plans to host a conference call for shareholders and the
investing community on February 18, 2003 at 11 a.m. Eastern time
(8 a.m. Pacific) to review results for the quarter ended December 31, 2002.
The call can be accessed by dialing (913) 981-5507, access code 453892 and is
expected to last approximately 60 minutes. Callers are requested to dial in at
least 5 minutes before the start of the call. The call will also be available
through live webcast on the company's website, http://www.eaglegl.com , on the
Investor Relations page. An audio replay will be available until Monday,
March 3, 2003 at (719) 457-0820, access code 453892.
Fourth quarter 2002 product and geographic data and air freight statistics
are available on EGL's website, http://www.eaglegl.com on the Investor Relations
page. Certain out-of-pocket and ancillary expenses have been netted in the
Company's presentation of gross revenues. Such amounts will be grossed up in
the Company's Form 10-K.
Houston-based EGL, Inc. operates under the name EGL Eagle Global
Logistics. EGL is a leading global transportation, supply chain management
and information services company dedicated to providing superior flexibility
and fewer shipping restrictions on a price competitive basis. With 2002
revenues exceeding $1.6 billion, EGL's services include air and ocean freight
forwarding, customs brokerage, local pickup and delivery service, materials
management, warehousing, trade facilitation and procurement, and integrated
logistics and supply chain management services. The Company's shares are
traded on the Nasdaq National Market under the symbol "EAGL".
CAUTIONARY STATEMENTS
The statements in this press release (and statements in the conference
call referred to above) regarding projected first quarter and total year
results, additional efficiencies and leverage (including effect thereof)
opportunities, goals and results and future results of operations, and any
other statements, which are not historical facts, are forward looking
statements. Such statements involve risks and uncertainties, including, but
not limited to, general economic conditions, effect of cost-reductions and
infrastructure improvements, and results of litigation, the timing and effects
of any improvements in the regions and industry sectors in which the Company's
customers operate, competition, ability to manage and continue growth, and
other factors detailed in the Company's 2001 Form 10-K, proxy
statement/prospectus and other filings with the Securities and Exchange
Commission. Should one or more of these risks or uncertainties materialize
(or the consequences of such a development worsen), or should underlying
assumptions prove incorrect, actual outcomes may vary materially from those
forecasted or expected. The Company disclaims any intention or obligation to
update publicly or revise such statements, whether as a result of new
information, future events or otherwise. The financial information included
in this press release is subject to audit and is not complete until filing of
the Company's 2002 Form 10-K.
EGL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2002 2001 2002 2001
Revenues $485,791 $425,482 $1,680,283 $1,671,994
Cost of transportation 302,254 257,965 1,008,151 1,027,811
Net revenues 183,537 167,517 672,132 644,183
Operating expenses:
Personnel costs 100,434 93,661 370,817 383,211
Other selling, general
and admin costs 71,237 71,389 274,878 294,488
Air transportation
safety stabilization
grant -- -- (8,923) --
EEOC legal settlement -- -- -- 10,089
Restructuring and
integration costs 212 (1,009) 5,688 13,964
Operating income (loss) 11,654 3,476 29,672 (57,569)
Nonoperating expense, net (727) (2,824) (14,556) (8,442)
Income (loss) before
provision (benefit)
for income taxes 10,927 652 15,116 (66,011)
Provision (benefit)
for income taxes 4,261 (169) 5,895 (25,834)
Income (loss) before
cumulative effect of
change in accounting
for negative goodwill 6,666 821 9,221 (40,177)
Cumulative effect of
change in accounting
for negative goodwill -- -- 213 --
Net income (loss) $6,666 $821 $9,434 $(40,177)
Basic earnings (loss)
per share $0.14 $0.02 $0.20 $(0.84)
Diluted earnings (loss)
per share $0.14 $0.02 $0.20 $(0.84)
Basic weighted-average
common shares outstanding 47,034 47,798 47,610 47,558
Diluted weighted-average
common shares outstanding 52,989 49,314 47,811 47,558
EGL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
December 31, December 31,
2002 2001
ASSETS
Current assets:
Cash, cash equivalents, restricted cash
and short-term investments $127,487 $86,295
Trade accounts receivable, net of allowance 371,024 365,505
Other current assets 50,758 67,035
Total current assets 549,269 518,835
Property and equipment, net 157,403 152,922
Assets held for sale 644 --
Investments in unconsolidated affiliates 40,042 46,018
Goodwill, net 81,881 78,901
Other assets, net 33,830 20,503
Total assets $863,069 $817,179
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $5,639 $7,950
Accounts payable and accrued
transportation costs 232,324 216,073
Accrued salaries and related costs 31,218 27,982
Other liabilities 78,636 62,927
Total current liabilities 347,817 314,932
Notes payable 103,993 103,774
Other noncurrent liabilities 25,866 25,349
Minority interest 8,852 7,033
Stockholders' equity 376,541 366,091
Total liabilities and
stockholders' equity $863,069 $817,179
EGL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Twelve Months Ended
December 31,
2002 2001
Cash flows from operating activities:
Net income (loss) $9,434 $(40,177)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 30,527 33,033
Provision for doubtful accounts,
net of write offs 7,669 13,629
Amortization of unearned compensation 635 803
Impairment of assets 635 (497)
Deferred income tax expense (benefit) 5,237 (12,453)
Tax effect of stock options exercised 196 2,956
Equity in (earnings) losses of
affiliates, net of dividends received (429) 3,100
Minority interests in earnings (losses),
net of dividends paid 1,006 313
Transfer to restricted cash (2,393) (5,413)
Cumulative effect of change in
accounting for negative goodwill (213) --
Impairment of investment in an
unconsolidated affiliate 6,653 --
Other 1,223 (2,167)
Net effect of changes in working capital 12,157 30,419
Net cash provided by operating activities 72,337 23,546
Cash flows from investing activities:
Capital expenditures (41,429) (64,866)
Purchase of assets held for sale (11,570) --
Proceeds from sales of other assets 7,974 27,394
Proceeds from sale-lease back
transactions 21,487 16,667
Cash received from minority
interest partner 301 --
Acquisitions of businesses,
net of cash acquired (216) (4,637)
Cash received from disposal of an
unconsolidated affiliate -- 3,062
Disposal of consolidated subsidiary -- (819)
Net cash used in investing activities (23,453) (23,199)
Cash flows from financing activities:
Repayment of / borrowings on
notes payable, net (1,407) (82,383)
Net proceeds from convertible debt offering -- 96,875
Issuance of common stock,
net of related costs 1,033 1,236
Proceeds from exercise of stock options 687 3,319
Repurchase of common stock (10,014) --
Net cash provided by (used in)
financing activities (9,701) 19,047
Effect of exchange rate changes on cash 3,046 (1,955)
Increase in cash and cash equivalents 42,229 17,439
Cash and cash equivalents,
beginning of the year 77,440 60,001
Cash and cash equivalents, end of the year $119,669 $77,440
Fourth quarter 2002 product and geographic data and air freight
statistics are available on EGL's website, http://www.eaglegl.com
on the Investor Relations page.
SOURCE EGL, Inc.
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Related links:
http://www.eaglegl.com
CONTACT:
Elijio Serrano, Chief Financial Officer of
EGL, Inc., +1-281-618-3665
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