HOUSTON, May 6 /PRNewswire-FirstCall/ -- EGL, Inc. (Nasdaq: EAGL)
announced that net income increased 114% to $6.0 million for the three months
ended March 31, 2004, compared to $2.8 million in the first quarter of 2003.
Diluted earnings per share for the quarter were $0.13 compared to $0.06 in Q1
2003.
Q1 Financial Highlights
-- Gross revenues increased 21% over Q1 2003 on strong international
air, ocean and logistics activity
-- Net revenue of $200.4 million is a record high for the Company
-- Net revenue margins improved 230 basis points over Q4 2003
-- Operating income improved by $6.8 million to $11.4 million
-- Cash flow from operating activities was $35.9 million
Three Months Ended
03/31/04 03/31/03
$ thousands (except EPS)
Gross revenues $585,959 $483,650
% change + 21%
Net revenues $200,373 $167,566
% change + 20%
Net revenue margin 34.2% 34.6%
Operating income $11,448 $4,638
Net income $5,981 $2,795
Diluted EPS $0.13 $0.06
EGL Chief Executive Officer Jim Crane commented, "We believe our first
quarter performance validates our business model, as we experienced 21% growth
in gross revenues and a 20% growth in net revenues despite the continued shift
to deferred shipments in the North America forwarding market. As the economy
continues to recover, our low cost domestic network is positioned to benefit
from customers expediting product from overseas suppliers directly to US
distribution and retail centers. We continue to see growth in our
international business as we leverage our North America network and customer
base. These results reflect the benefits of the merger in 2000 to expand our
global network. The improvements in volumes and profitability are coming
despite the weak North America priority market. As our domestic priority
products show improvement, we expect our profitability to accelerate. In
addition, we expect to capitalize on growth opportunities internationally,
including in the Middle East and China."
Gross revenues increased 21% from the first quarter of 2003 to
$586 million, reflecting a 17% increase in airfreight revenues -- mainly
international, a 26% increase in ocean revenues, and a 32% increase in customs
brokerage and logistics. North America ground volumes continued to reflect
the shift from priority to deferred shipments as the priority volumes declined
11%. Gross revenues outside North America increased 27%.
Q1 2004 net revenues of $200 million increased 20% over last year and
surpassed net revenues for the fourth quarter of 2003, resulting in a record
high for the Company. Net revenue margins of 34.2% declined by 40 basis
points from the first quarter of 2003 reflecting a slight decline in ocean and
import margins. However, the 230 basis point improvement in net revenue
margins from fourth quarter of 2003 reflects yield improvements across all
products and geographic regions, especially from Asia.
Operating income for the first quarter of 2004 was $11.4 million, an
increase of $6.8 million from the first quarter of 2003. Operating income as
a percent of net revenue was 5.7% in the first quarter of 2004 as compared to
2.8% in the same quarter last year.
The Company's income tax rate was 42.9% for Q1 2004 compared to 37.8% for
the same quarter last year. The higher tax rate was due to adjustments to
deferred taxes on foreign earnings. The Company expects the tax rate to
approximate 36.5% for the remainder of the year.
Cash flow from operations during the quarter was $35.9 million, reflecting
stronger earnings and better management of working capital. During the
quarter, the Company purchased 2.4 million shares of its common stock at an
average price of $16.09 per share pursuant to a publicly announced share
repurchase program approved by the Company's Board of Directors. The
repurchase program authorized up to $65 million in repurchases of the
Company's common stock.
EGL Chief Financial Officer Elijio Serrano added, "Our organization
continues to focus on operating efficiencies and the deployment of our global
freight forwarding, accounting and human resources systems. The systems, re-
branded as the EGL Vision suite of technologies have now been deployed in six
countries. 'Global Vision' is the freight forwarding system that allows a
seamless flow of data across the globe, eliminating duplicate data entry on
multiple systems. 'Financial Vision' is the Oracle-based financial system
that allows global visibility of financial results, streamlined financial
reporting and the ability to automate intercompany accounting. 'People
Vision' is the Oracle-based human resources application that allows global
visibility to employee tracking, training and development. The global
deployment of EGL Vision will continue into early next year."
Second Quarter of 2004 and Total Year 2004
EGL expects second quarter 2004 diluted earnings per share in the range of
$0.20 to $0.23, compared to $0.14 last year. For 2004, EGL maintains its
projections of gross revenues in the range of $2.3 to $2.4 billion and diluted
earnings per share in the range of $0.75 - $0.85. Capital expenditures for
2004 are estimated at $35 million.
Earnings Conference Call
EGL, Inc. plans to host a conference call for shareholders and the
investing community on May 6, 2004 at 11 a.m. Eastern time (8 a.m. Pacific) to
review results for the quarter ended March 31, 2004. The call can be accessed
by dialing (719) 457-2680, access code 544965 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, May 20, 2004 at
(719) 457-0820, access code 544965.
First quarter 2004 product and geographic data and air freight statistics
are available on EGL's website, http://www.eaglegl.com on the Investor Relations
page.
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 2003
revenues exceeding $2.1 billion, EGL's services include air and ocean freight
forwarding, customs brokerage, local pick up 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 improvements in priority product volumes,
projected profitability, adding to growth, improvement on yields, increased
efficiencies, the timing and scope of deployment of operating and financial
systems, whether or not such deployment will be completed in a timely manner,
second quarter and total year results and diluted earnings per share,
projected results for 2004, projected tax rates for 2004, our ability to
outperform the economy and 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,
risks associated with operating in international markets, the results of
litigation, the timing and effects of any improvements in the regions and
industry sectors in which the Company's customers operate, infrastructure
improvements, ability to manage and continue growth, competition and other
factors detailed in the Company's 2003 Form 10-K, proxy statement 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 OPERATIONS
(unaudited)
(in thousands, except per share amounts)
Three Months Ended
March 31,
2004 2003
Revenues $585,959 $483,650
Cost of transportation 385,586 316,084
Net revenues 200,373 167,566
Operating expenses:
Personnel costs 114,122 98,111
Other selling, general and administrative
expenses 74,803 64,817
Operating income 11,448 4,638
Nonoperating expense, net (972) (142)
Income before provision for income taxes 10,476 4,496
Provision for income taxes 4,495 1,701
Net income $5,981 $2,795
Basic earnings per share $0.13 $0.06
Diluted earnings per share $0.13 $0.06
Basic weighted-average common
shares outstanding 46,894 47,066
Diluted weighted-average common
shares outstanding 47,136 47,277
EGL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
March 31, December 31,
2004 2003
ASSETS
Current assets:
Cash, cash equivalents, restricted cash
and short-term investments $105,030 $110,026
Trade accounts receivable, net of allowance 442,364 447,353
Other current assets 59,179 56,875
Total current assets 606,573 614,254
Property and equipment, net 165,867 164,038
Investments in unconsolidated affiliates 39,677 38,957
Goodwill, net 96,496 96,209
Other assets, net 30,086 30,780
Total assets $938,699 $944,238
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term notes payable $19,755 $13,017
Trade payables and accrued transportation
costs 282,420 268,354
Accrued expenses and other liabilities 109,514 103,247
Total current liabilities 411,689 384,618
Long-term notes payable 112,975 114,407
Other noncurrent liabilities 23,630 23,817
Minority interest 6,892 6,800
Stockholders' equity 383,513 414,596
Total liabilities and stockholders' equity $938,699 $944,238
EGL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Three Months Ended
March 31,
2004 2003
Cash flows from operating activities:
Net income $5,981 $2,795
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 8,278 7,729
Bad debt expense 2,212 1,753
Transfers to restricted cash (639) (7,182)
Other 315 1,588
Net effect of changes in working capital,
net of assets acquired 19,743 (1,484)
Net cash provided by operating activities 35,890 5,199
Cash flows from investing activities:
Capital expenditures (8,489) (4,313)
Purchase of short-term investment (55) ---
Proceeds from sales of other assets 206 324
Acquisitions of businesses, net of
cash acquired --- (1,733)
Net cash used in investing activities (8,338) (5,722)
Cash flows from financing activities:
Issuance of notes payable, net 6,818 321
Repayment of financed insurance
premiums, net (1,386) (2,399)
Repayment of capital leases (123) ---
Repurchase of common stock (38,109) ---
Proceeds from exercise of stock options 202 598
Dividends paid to minority interest
partners (16) ---
Net cash provided by (used in) financing
activities (32,614) (1,480)
Effect of exchange rate changes on cash (634) (1,227)
Increase (decrease) in cash and cash
equivalents (5,696) (3,230)
Cash and cash equivalents, beginning of
the period 95,916 111,477
Cash and cash equivalents, end of the period $90,220 $108,247
First quarter 2004 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,
+1-281-618-3665, or Mike Slaughter, Investor Relations,
+1-281-618-3428, both of EGL, Inc.
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