HOUSTON, Aug. 4 /PRNewswire-FirstCall/ -- EGL, Inc. (Nasdaq: EAGL)
announced that gross revenues increased 23% to $781 million for the quarter
ended June 30, 2005 compared to $637 million in the same quarter of 2004.
Diluted earnings per share for the second quarter of 2005 was $0.25 compared
to $0.30 in the second quarter of 2004.
Q2 Financial Highlights:
* Gross revenues increased 23% on strong activity across all product
lines and geographic areas;
* Net revenues increased 13% on a 12% increase in air freight tonnage;
* The quarter included a pre-tax charge of $1.55 million related to
previously announced work force reductions, mainly in certain European
and USA locations.
* Operating income as a percent of net revenues was 8.9%;
* Net cash flow from operating activities increased significantly to
$37 million compared to $21 million in the second quarter of 2004.
* Free cash flow (net cash flow from operating activities of
$92.7 million less $25.4 million of capital expenditures) for the six
months ended June 30, 2005 was $67.3 million, on working capital
improvements.
* EGL shares purchased during the quarter on the previously announced
share repurchase program were 4.93 million ($93.6 million).
Three Months Ended Six Months Ended
06/30/05 06/30/04 06/30/05 06/30/04
$ thousands (except EPS)
Gross revenues $781,254 $637,313 $1,481,920 $1,221,868
% change +23% +21%
Net revenues $236,496 $209,071 $449,928 $409,812
% change +13% +10%
Net revenue margin 30.3% 32.8% 30.4% 33.5%
Operating income $21,003 $15,605 $34,726 $29,208
Net income $12,702 $14,121 $19,867 $21,413
Diluted EPS $0.25 $0.30 $0.38 $0.45
EGL Chief Executive Officer Jim Crane commented, "We remain focused on
improving our net revenue and operating margins. The actions taken during the
quarter to improve our recovery of fuel costs, align our cost structure with
the volumes and increase cash flow, contributed to our improved results during
a difficult pricing environment as compared to the first quarter of 2005."
Gross revenues increased 23% from the second quarter of 2004 to
$781 million, reflecting a 23% increase in airfreight revenues, a 26% increase
in ocean revenues, and a 19% increase in customs brokerage and logistics.
Gross revenues outside North America increased 32% due to the higher volumes
from Asia and higher fuel costs that were passed on to our customers.
Net revenues of $236 million in the second quarter of 2005 increased by
13% from the same quarter last year. Net revenue margins of 30.3% declined by
250 basis points from the second quarter of 2004, reflecting the rising fuel
costs and higher rate of growth in the lower margin (but higher net revenue
per shipment) international air and ocean products. Airfreight tonnage
increased 12% compared to the second quarter of 2004.
Operating expenses of $215 million included the $1.55 million pre-tax
expense related to workforce reductions, mainly in certain European and USA
locations. Operating income increased 35% to $21 million, as compared to the
second quarter of 2004. Operating income for the second quarter of 2004
included a $5.8 million facilities charge for idle facilities, including the
subleasing of an excess facility in Miami.
Non-operating income of $2.3 million in the second quarter of 2005
decreased 67% from the same quarter last year. The decline in non-operating
income was due to a one-time gain of $6.7 million resulting from the sale of
the Company's interest in Miami Air in May of 2004.
The Company's effective tax rate in the second quarter of 2005 was 45.4%,
reflecting losses in certain European countries without any tax loss carry
forward benefit being recorded for those countries.
Stock Repurchase Program
Total cash and short-term investments increased to $114 million at
June 30, 2005 compared to $111 million at December 31, 2004. During the
second quarter the Company's Board of Directors extended and increased its
prior stock repurchase program for repurchases of common stock up to
$120 million. During the second quarter of 2005, the Company had purchased
4.93 million shares for $93.6 million. Since the end of the second quarter,
the Company had repurchased an additional 35,200 shares for a total of
$705,000.
Third and Fourth Quarter of 2005 Earnings Guidance
EGL expects diluted earnings per share in the range of $0.31 to $0.35 for
each of the third and fourth quarters of 2005, compared to $0.34 and $0.26, in
the respective quarters of last year.
Earnings Conference Call
EGL, Inc. plans to host a conference call for shareholders and the
investing community on August 4, 2005 at 11 a.m. Eastern time (8 a.m. Pacific)
to review results for the quarter ended June 30, 2005. The call can be
accessed by dialing (719) 457-2641, access code 6864657 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 Sunday,
August 14, 2005 at (719) 457-0820, access code 6864657.
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 2004
revenues exceeding $2.7 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), growth opportunities, yield
improvement, increased efficiencies, improvements in operating and financial
systems, effective tax rates for 2005, our ability to pass-through fuel costs
(including the effects thereof), expected insurance recoveries, potential
stock repurchases, 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, construction of new facilities and other
infrastructure improvements, ability to manage and continue growth,
competition, ability to renegotiate customer contracts and other factors
detailed in the Company's 2004 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.
EGL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Revenues $ 781,254 $ 637,313 $1,481,920 $1,221,868
Cost of transportation 544,758 428,242 1,031,992 812,056
Net revenues 236,496 209,071 449,928 409,812
Operating expenses:
Personnel costs 135,922 115,567 261,124 229,781
Other selling, general
and administrative
expenses 79,571 77,899 154,078 150,823
Operating income 21,003 15,605 34,726 29,208
Nonoperating income, net 2,265 6,763 1,862 5,821
Income before provision
for income taxes 23,268 22,368 36,588 35,029
Provision for income taxes 10,566 8,247 16,721 13,616
Net income $ 12,702 $ 14,121 $ 19,867 $ 21,413
Basic earnings per share $ 0.25 $ 0.32 $ 0.39 $ 0.47
Diluted earnings per share $ 0.25 $ 0.30 $ 0.38 $ 0.45
Basic weighted-average
common shares outstanding 50,614 44,744 51,328 45,819
Diluted weighted-average
common shares outstanding 50,863 50,944 51,692 51,872
EGL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
June 30, Dec. 31,
2005 2004
ASSETS
Current assets:
Cash, cash equivalents, restricted
cash and short-term investments $ 113,725 $ 110,509
Trade accounts receivable, net of allowance 550,229 611,594
Other current assets 66,345 56,034
Total current assets 730,299 778,137
Property and equipment, net 190,564 178,218
Investments in unconsolidated affiliates 576 619
Goodwill, net 110,894 108,470
Other assets, net 34,814 29,419
Total assets $1,067,147 $1,094,863
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 53,200 $ 19,426
Trade payables and accrued
transportation costs 336,298 337,137
Accrued expenses and other liabilities 140,458 134,107
Total current liabilities 529,956 490,670
Long-term debt 18,168 12,752
Other noncurrent liabilities 39,581 38,207
Minority interest 1,236 802
Stockholders' equity 478,206 552,432
Total liabilities and stockholders'
equity $1,067,147 $1,094,863
EGL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Six Months Ended
June 30,
2005 2004
Cash flows from operating activities:
Net income $ 19,867 $ 21,413
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 17,783 17,030
Bad debt expense 3,306 2,601
Transfers (to) from restricted cash 7,585 (759)
Other (553) (6,643)
Net effect of changes in working
capital, net of assets acquired 44,670 22,669
Net cash provided by operating activities 92,658 56,311
Cash flows from investing activities:
Capital expenditures (25,431) (21,936)
Purchase of short-term investments 550 (54)
Proceeds from sales of other assets 1,025 446
Acquisitions of businesses,
net of cash acquired --- (16,216)
Earnout payments (4,186) (3,200)
Cash received from disposal of affiliates --- 6,738
Collection of notes receivable 873 346
Net cash used in investing activities (27,169) (33,876)
Cash flows from financing activities:
Issuance of debt, net 32,534 6,912
Repayment of financed insurance
premiums and software, net (1,516) (2,198)
Repayment of capital leases (863) (371)
Repurchases of common stock (93,588) (59,079)
Payment of deferred financing fees (15) (300)
Issuance of common stock 535 319
Proceeds from exercise of stock options 5,497 10,150
Cash received from a minority
interest partner 535 ---
Dividends paid to minority
interest partners (82) (18)
Net cash used in financing activities (56,963) (44,585)
Effect of exchange rate changes on cash 2,839 (2,091)
Increase (decrease) in cash
and cash equivalents 11,365 (24,241)
Cash and cash equivalents,
beginning of the period 92,918 94,099
Cash and cash equivalents,
end of the period $ 104,283 $ 69,858
Second 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:
Elijio Serrano, Chief Financial Officer of
EGL, Inc., +1-281-618-3665
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