HOUSTON, May 8 /PRNewswire-FirstCall/ -- EGL, Inc. (Nasdaq: EAGL) today
reported net income for the first quarter of 2006 of $11.1 million, a 55%
increase, compared with net income of $7.2 million in the same quarter of
2005. Diluted earnings per share for the first quarter of 2006 were $0.27,
a 93% increase, compared with $0.14 in the first quarter of 2005.
The first quarter of 2006 diluted earnings per share of $0.27 included
a net gain of $0.04 per share ($1.5 million after tax) related to the
resolution of a business interruption and related claims filed last year
resulting from a fire at the Company's Thurrock facility in the United
Kingdom. The first quarter of 2005 diluted earnings per share of $0.14
included a net gain of $0.06 per share ($3.2 million after tax) related to
the settlement of the EEOC matter.
Q1 Financial Highlights:
* Gross revenues increased 7% to $752 million, compared with
$701 million in the first quarter of 2005 on increased air, ocean and
logistics activity;
* Net revenues increased 11% to $237 million, compared with $213 million
in the first quarter of 2005;
* Operating income increased 59% to $21.9 million, compared with
$13.7 million in the first quarter of 2005:
* Net revenue margin improved to 31.5% compared with 30.5% in the first
quarter of 2005;
* Cash flow from operations increased 35% to $65 million compared with
$48 million in the first quarter of 2005;
* Free cash flow, defined as net cash flow from operating activities
less capital expenditures, was $57 million, compared with $29 million
for the first quarter of 2005;
* Days sales outstanding improved to 61 days compared with 71 days in
the first quarter of 2005.
Three Months Ended
$ millions (except EPS) 3/31/06 3/31/05
Gross revenues $752.4 $700.7
% change +7%
Net revenues $237.2 $213.4
% change +11%
Net revenue margin 31.5% 30.5%
Operating expenses $215.3 $199.7
Operating income $21.9 $13.7
Net income $11.1 $7.2
Diluted EPS $0.27 $0.14
EGL Chief Executive Officer Jim Crane commented, "Our solid first
quarter results reflect increased gross and net revenues, strong management
of operating expenses and solid cash flow from operations. We continue to
focus the organization on increasing net revenues across all product lines
and increasing operating income in all geographic locations. Our first
quarter results represent a very good start for 2006 in what traditionally
has been our seasonally weakest quarter from both a revenue and earnings
perspective. "
Net revenues of $237 million in the first quarter of 2006 increased 11%
from the same quarter last year driven by a 22% increase in ocean freight
forwarding net revenues, an 11% increase in airfreight forwarding net
revenues and an 8% increase in customs brokerage and other net revenue.
Operating income increased 59% to $21.9 million, as compared with the
first quarter of 2005 due to an 11% increase in net revenues while
operating expenses increased at a rate of 8%. Operating expenses included
$2.2 million pre-tax of personnel costs ($1.3 million after-tax or $0.03
per share) related to stock compensation expense in the first quarter of
2006. Operating income as a percent of net revenues improved to 9.2% from
6.4% in the same quarter last year.
Non-operating expense in the first quarter of 2006 increased to $3.5
million from $0.4 million in the same quarter last year primarily due to an
increase in interest expense of $2.4 million resulting from increased
borrowings used to finance the modified "Dutch Auction" self-tender in
October 2005.
Cash Flow and Balance Sheet
Cash flow from operations was $65 million for the first quarter. EGL
ended the first quarter of 2006 with $144 million in cash, restricted cash
and short-term investments and total debt of $185 million.
2006 Earnings Outlook
For 2006, EGL expects full year diluted earnings per share in the range
of $1.50 to $1.60, including an estimated $0.14 of stock compensation
expense as a result of the Company's adoption of SFAS 123(R) "Share-Based
Payment" effective January 1, 2006.
Earnings Conference Call
EGL, Inc. plans to host a conference call for shareholders and the
investing community on May 9, 2006 at 11 a.m. Eastern time (8 a.m. Pacific)
to review results for the quarter ended March 31, 2006. The call can be
accessed by dialing (719) 457-2630, access code 2975486 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 web cast on the Company's website, http://www.eaglegl.com , on
the Investor Relations page. An audio replay will be available until
Tuesday, May 23, 2006 at (719) 457-0820, access code 2975486.
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, the results of government investigations 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, control by and 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, laws and regulations that decrease our ability to change our
charter and bylaws, the impact of goodwill impairments, the successful
deployment of our global IT infrastructure 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
March 31,
2006 2005
Revenues $752,363 $700,666
Cost of transportation 515,162 487,234
Net revenues 237,201 213,432
Operating expenses:
Personnel costs 134,596 125,202
Other selling, general and
administrative expenses 80,724 80,482
EEOC legal settlement --- (5,975)
Operating income 21,881 13,723
Nonoperating income (expense), net (3,482) (403)
Income before provision for income taxes 18,399 13,320
Provision for income taxes 7,295 6,155
Net income $11,104 $7,165
Basic earnings per share $0.28 $0.14
Diluted earnings per share $0.27 $0.14
Basic weighted-average common
shares outstanding 40,096 52,051
Diluted weighted-average common
shares outstanding 40,649 52,595
EGL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
March 31, March 31,
2006 2005
ASSETS
Current assets:
Cash, cash equivalents, restricted
cash and short-term investments $144,244 $144,441
Trade accounts receivable, net of
allowance 506,262 541,993
Other current assets 72,351 66,325
Total current assets 722,857 752,759
Property and equipment, net 183,836 190,601
Investments in unconsolidated affiliates 401 540
Goodwill, net 113,580 107,953
Other assets, net 41,408 29,855
Total assets $1,062,082 $1,081,708
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $14,771 $20,964
Trade payables and accrued
transportation costs 325,016 319,103
Accrued expenses and other
liabilities 155,826 122,707
Total current liabilities 495,613 462,774
Long-term debt 170,236 16,843
Other noncurrent liabilities 42,039 38,291
Minority interest 1,921 1,157
Stockholders' equity 352,273 562,643
Total liabilities and stockholders'
equity $1,062,082 $1,081,708
EGL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Three Months Ended
March 31,
2006 2005
Cash flows from operating activities:
Net income $11,104 $7,165
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 8,911 8,634
Bad debt expense 716 2,661
Other 2,338 3,200
Net effect of changes in working
capital, net of assets acquired 41,806 26,319
Net cash provided by operating
activities 64,875 47,979
Cash flows from investing activities:
Capital expenditures (7,469) (18,694)
(Increase) decrease in restricted cash (618) 7,482
Proceeds from sales of other
assets 203 782
Proceeds from property insurance 517 ---
Acquisitions of businesses, net of
cash acquired (1,444) ---
Cash received from disposal of
affiliates 1,254 ---
Other 271 (8)
Net cash used in investing activities (7,286) (10,438)
Cash flows from financing activities:
Proceeds from issuance of debt 88,025 592
Repayment of debt (134,055) (1,307)
Issuance (repayment) of short-term
debt with maturities of less than
three months, net (1,844) (2,043)
Repayment of financed insurance
premiums and software, net (1,306) (643)
Repayment of capital leases (662) (243)
Payment of deferred financing fees (68) (13)
Issuance of common stock for
employee stock purchase plan --- ---
Proceeds from exercise of stock
options 9,336 5,377
Excess tax benefit of employee
stock plans 2,889 ---
Other (128) 142
Net cash used in financing activities (37,813) 1,862
Effect of exchange rate changes on cash 580 1,988
Increase (decrease) in cash and cash
equivalents 20,356 41,391
Cash and cash equivalents, beginning
of the period 111,507 92,918
Cash and cash equivalents, end of the
period $131,863 $134,309
First quarter 2006 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 of
EGL, Inc., +1-281-618-3428
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