Diluted EPS of $0.47
HOUSTON, March 9 /PRNewswire-FirstCall/ -- EGL, Inc. (Nasdaq: EAGL)
reported record gross revenues of $835.1 million for the quarter ended
December 31, 2005 driven by growth across air, ocean and customs brokerage
product lines and diluted earnings per share of $0.47, an increase of 81%.
Gross revenue for the year were $3.1 billion, an increase of 13%. Diluted
earnings per share for the year was $1.22, an increase of 16%.
Diluted earnings per share of $0.47 included a $0.07 per share charge for
the KBR overcharge penalty offset by a $0.06 per share gain from the release
of escrow funds related to the sale of the Company's interest in TDS during
2004.
The fourth quarter diluted earnings per share also included a $0.08 per
share charge for higher expenses related to the warehouse fire in the United
Kingdom and higher insurance expenses partially offset by a $0.04 per share
benefit related to income taxes.
2005 Financial Highlights:
-- Operating income increased 17% to $95.4 million;
-- Operating income as a percent of net revenues improved to 10.1%
compared to 9.4% in 2004;
-- Repurchased approximately 25% of total common shares outstanding (13.1
million shares for $305 million);
-- Net cash flow from operating activities increased significantly to
$155 million compared to $32 million in 2004 due to a 13% improvement
in days sales outstanding;
-- Free cash flow, defined as net cash flow from operating activities
less capital expenditures, was $115 million.
Q4 Financial Highlights:
-- Net revenue margins improved by 140 basis points to 30.1% in Q4 2005
compared to 28.7% in Q4 2004;
-- Net revenues increased 10% to $251.6 million on positive activity
across all geographic areas;
-- Net income for the quarter increased 48% to $19.1 million;
-- Days sales outstanding improved to 61 days compared to 70 days in Q4
2004.
Three Months Ended Year Ended
12/31/05 12/31/04 12/31/05 12/31/04
$ thousands (except EPS)
Gross revenues $835,089 $800,107 $3,096,516 $2,741,392
% change + 4% + 13%
Net revenues $251,586 $229,629 $948,474 $865,366
% change + 10% + 10%
Net revenue margin 30.1% 28.7% 30.6% 31.6%
Operating income $27,640 $28,291 $95,410 $81,324
Net income $19,061 $12,890 $58,160 $50,878
Diluted EPS $0.47 $0.26 $1.22 $1.05
EGL Chief Executive Officer Jim Crane commented, "Our solid 2005 results
were bolstered by increasing operating margins and strong cash flow
improvements which gave us the confidence to repurchase 25% of our shares.
Moving into 2006, we remain focused on four key areas: (1) revenue growth
across all product lines and geographies (2) improving yields through pricing
and effective purchasing of capacity, (3) operational efficiencies through
streamlined processes, and (4) increasing cash flow from operations. The
efforts of all our employees are contributing nicely toward our goals of
improving profitability and enhancing shareholder value."
Net revenues of $251.6 million in the fourth quarter of 2005 increased by
10% over last year driven by a 17% increase in ocean freight forwarding net
revenues and a 13% increase in airfreight forwarding net revenues.
Net revenue margins of 30.1% improved by 140 basis points over the fourth
quarter of 2004, on improved recovery of fuel surcharges and increased
available ocean capacity. Airfreight forwarding margins improved 170 basis
points to 26.7% in the fourth quarter while ocean freight forwarding margins
improved 250 basis points to 19.6%.
Non-operating income of $2.9 million in the fourth quarter of 2005
included a $4.0 million gain from the release of escrow funds related to the
sale of the Company's interest in TDS and $2.8 million of net interest
expense.
Cash Flow and Stock Repurchases
Cash flow from operations was $155 million for the year. EGL ended the
year with $123 million in cash, restricted cash and short-term investments and
$231 million of total debt.
During 2005, the Company repurchased approximately 25% of its outstanding
common stock (13.1 million shares) in the open market for $305 million. At
December 31, 2005, 40 million common shares remained outstanding.
2006 Earnings Guidance
For 2006, EGL expects total year diluted earnings per share in the range
of $1.50 to $1.55, excluding an estimated $0.13 of stock compensation expense
as a result of the Company's adoption of SFAS 123(R) "Share-Based Payment"
effective January 1, 2006. First quarter 2006 earnings per share are
anticipated to be in the range of $0.18 to $0.20, excluding an estimated $0.04
of stock compensation expense, compared to $0.14 in the first quarter of 2005.
Earnings Conference Call
EGL, Inc. plans to host a conference call for shareholders and the
investing community on March 9, 2006 at 11 a.m. Eastern time (8 a.m. Pacific)
to review results for the quarter ended December 31, 2005. The call can be
accessed by dialing (719) 457-2637, access code 5155424 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 Thursday, March 23,
2006 at (719) 457-0820, access code 5155424.
Founded in 1984, 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
2005 revenues of $3.1 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 revenue growth, profitability and
earnings per share (including guidance), capital expenditure levels, growth
opportunities, yield improvement, increased efficiencies, improvements in
operating and financial systems, effective tax rates, our ability to pass-
through fuel costs, expected insurance recoveries, stock repurchases, and
other statements that are not historical facts, are forward looking
statements. These statements involve risks and uncertainties including, but
not limited to, our ability to manage and continue growth, risks associated
with operating in international markets, events impacting the volume of
international trade, our ability to comply with rules relating to the
performance of U.S. government contracts, fuel shortages and price volatility
of fuel, seasonal trends in our business, currency devaluations and
fluctuations in foreign markets, our effective income tax rate, our ability to
upgrade our information technology systems, protecting our intellectual
property rights, heightened global security measures, availability of cargo
space, increases in the prices charged by our suppliers, competition in the
freight industry and our ability to maintain market share, material weaknesses
within our internal controls, dependence on our founder, liability for loss or
damage to goods, the results of litigation, exposure to fines and penalties if
our owner/operators are deemed to be employees, failure to comply with
environmental, health and safety, and criminal laws and regulations and
governmental permit and licensing requirements and other factors detailed in
the Company's Annual Reports on Form 10-K 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.
EGL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
Revenues $835,089 $800,107 $3,096,516 $2,741,392
Cost of transportation 583,503 570,478 2,148,042 1,876,026
Net revenues 251,586 229,629 948,474 865,366
Operating expenses:
Personnel costs 131,542 124,984 522,015 481,320
Other selling, general and
administrative expenses 92,404 76,354 331,049 302,722
Operating income 27,640 28,291 95,410 81,324
Nonoperating income (expense),
net 2,905 (1,683) 5,147 7,259
Income before provision for
income taxes 30,545 26,608 100,557 88,583
Provision for income taxes 11,484 13,718 42,397 37,705
Net income $19,061 $12,890 $58,160 $50,878
Basic earnings per share $0.48 $0.28 $1.23 $1.11
Diluted earnings per share $0.47 $0.26 $1.22 $1.05
Basic weighted-average common
shares outstanding 39,912 46,806 47,442 45,813
Diluted weighted-average
common shares outstanding 40,427 52,338 47,832 51,914
EGL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
December 31, December 31,
2005 2004
ASSETS
Current assets:
Cash, cash equivalents, restricted
cash and short-term investments $123,254 $110,509
Trade accounts receivable, net of
allowance 560,954 611,594
Other current assets 70,473 56,034
Total current assets 754,681 778,137
Property and equipment, net 185,906 178,218
Investments in unconsolidated affiliates 534 619
Goodwill, net 113,048 108,470
Other assets, net 35,316 29,419
Total assets $1,089,485 $1,094,863
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $15,967 $19,426
Trade payables and accrued
transportation costs 342,351 337,137
Accrued expenses and other
liabilities 152,409 134,107
Total current liabilities 510,727 490,670
Long-term debt 214,555 12,752
Other noncurrent liabilities 40,859 38,207
Minority interest 1,616 802
Stockholders' equity 321,728 552,432
Total liabilities and stockholders'
equity $1,089,485 $1,094,863
EGL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Twelve Months Ended
December 31,
2005 2004
Cash flows from operating activities:
Net income $58,160 $50,878
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 35,932 35,109
Bad debt expense 8,630 6,672
Other 2,460 922
Net effect of changes in working
capital, net of assets acquired 50,220 (61,448)
Net cash provided by operating activities 155,402 32,133
Cash flows from investing activities:
Capital expenditures (40,468) (38,163)
Purchase of short-term investments - (44)
(Increase) decrease in restricted
cash 5,322 (3,426)
Proceeds from sales of marketable
securities 542 -
Proceeds from sales of other assets 4,327 1,106
Proceeds from property insurance 673 -
Acquisitions of businesses, net of
cash acquired (56) (16,216)
Earnout payments (4,404) (3,291)
Cash received from disposal of
affiliates 2,787 52,123
Collection of notes receivable 2,606 906
Net cash used in investing activities (28,671) (7,005)
Cash flows from financing activities:
Proceeds from issuance of debt 495,597 211,029
Repayment of debt (309,297) (218,778)
Issuance (repayment) of short-term
debt with maturities of less than
three months, net (2,744) 12,078
Repayment of financed insurance
premiums and software, net (3,364) (6,417)
Repayment of capital leases (2,245) (937)
Repurchases of common stock (305,317) (59,079)
Payment of deferred financing fees (3,454) (1,097)
Issuance of common stock for
employee stock purchase plan 1,135 791
Proceeds from exercise of stock
options 21,176 39,899
Other 801 (120)
Net cash used in financing activities (107,712) (22,631)
Effect of exchange rate changes on cash (430) (3,678)
Increase (decrease) in cash and cash
equivalents 18,589 (1,181)
Cash and cash equivalents, beginning
of the period 92,918 94,099
Cash and cash equivalents, end of the
period $111,507 $92,918
Fourth quarter 2005 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:
Mike Slaughter, Vice President Finance for
EGL, Inc., +1-281-618-3428
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