HOUSTON, Nov. 11 /PRNewswire-FirstCall/ -- EGL, Inc. (Nasdaq: EAGL)
announced that it earned $5.6 million of net income, or $0.12 per share, for
the third quarter ended September 30, 2003, as compared to $5.7 million, or
$0.12 per share in the third quarter of last year. Current quarter results
include a charge of $0.04 per share related to the previously announced
settlement of a dispute with a transportation provider. Reported earnings per
share were $0.31 for the first nine months of this year, as compared to $0.06
in the same period last year.
Financial Highlights
-- Gross revenues improved 15% as compared to the same quarter last year
on strong ocean and logistics activity.
-- Net revenue margins declined 240 basis points from the third quarter
of 2002 on higher transportation costs from Asia.
-- Earnings per share were unfavorably impacted by $0.04 on a legal
settlement and related fees.
-- Cash and short-term investments increased by $39 million from the
second quarter of this year to $133 million (including $13 million of
restricted cash).
$ thousands Three Months Ended Nine Months Ended
(except EPS) 9/30/03 9/30/02 9/30/03 9/30/02
Gross revenues $539,275 $469,425 $1,549,788 $1,341,453
% change + 15% + 16%
Net revenues $183,764 $171,320 $536,860 $488,595
% change +7% +10%
Net revenue margin 34.1% 36.5% 34.6% 36.4%
Operating Income $11,333 $11,757 $28,182 $18,018
Net income $5,556 5,747 $14,818 $2,768
Diluted EPS $0.12 $0.12 $0.31 $0.06
EGL Chief Executive Officer Jim Crane commented, "We continue to see
growth in all our product lines and geographic areas. Our third quarter
performance, however, was impacted by airline price increases out of Asia that
were not matched with corresponding price increases to our customers due to
weak air freight demand. This impacted earnings per share by approximately
$0.04. The slow start to the traditionally strong August-September period of
US imports offset continued growth of North America deferred ground volumes
and improvements from the logistics projects in Europe. Additionally, a
settlement with Kitty Hawk, Inc., a wholesale transportation provider,
stemming from a 2001 dispute was resolved and unfavorably impacted earnings."
"As our customers work down inventories and 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," continued Crane.
Gross revenues increased 15% from the third quarter of 2002 to
$539 million reflecting a 32% increase in ocean revenues and a 31% improvement
in logistics and other revenues. North America ground volumes continued to
reflect the shift from priority to deferred shipments as the priority volumes
declined 9% while the deferred volumes increased 9%. Gross revenues outside
North America increased 20%.
Net revenues of $184 million in the third quarter of 2003 increased 7%
from last year, or 9% without the $2.3 million unfavorable impact of the Kitty
Hawk settlement. Net revenue margins of 34.1% declined 240 basis points from
the third quarter of 2002 reflecting the airline and ocean rate increases,
primarily out of Asia.
Net income in the third quarter of this year was $0.12 per diluted share,
or $5.6 million. Net income for the third quarter of 2002 was $0.12 per
diluted share, or $5.7 million, and included an after tax benefit of $5.4
million, or $0.11 per diluted share, from a previously disclosed grant and an
after tax charge of $3.3 million, or $0.07 per diluted share, to cover the
cost of idle facilities.
Cash and short-term investments increased during the quarter by
$39 million to $133 million (including $13 million of restricted cash).
Nine Months Ended September 2003
Gross revenues of $1.5 billion for the nine months ended September 30,
2003 increased 16% over the same period of 2002. Net revenues of $537 million
increased 10% while net income of $14.8 million improved by $12.1 million from
the same period of 2002. Fully diluted earnings per share of $0.31 have
improved from $0.06 for the same period of last year.
Fourth Quarter and Total Year 2003 and 2004
EGL expects fourth quarter 2003 diluted earnings per share to be between
$0.18-$0.20, compared to $0.14 in the same quarter of last year. For the full
year 2003, EGL expects diluted earnings per share between $0.49 - $0.51,
compared to $0.20 per diluted share in 2002.
For 2004, EGL projects gross revenue to improve 15% over 2003 and fully
diluted earnings per share of between $0.85 - $0.95.
Earnings Conference Call
EGL, Inc. plans to host a conference call for shareholders and the
investing community on November 11, 2003 at 11 a.m. Eastern time (8 a.m.
Pacific) to review results for the quarter ended September 30, 2003. The call
can be accessed by dialing (719) 457-2662, access code 692215 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 Tuesday, November 25,
2003 at (719) 457-0820, access code 692215.
Third quarter 2003 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 2002
revenues exceeding $1.86 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 profitability, adding to growth,
improved margins, increased efficiencies, and initiatives in Asia, Europe and
the Middle East, third quarter and total year results and diluted earnings per
share, projected results 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, construction of new facilities and other infrastructure
improvements, ability to manage and continue growth, competition and other
factors detailed in the Company's 2002 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 Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
Revenues $539,275 $469,425 $1,549,788 $1,341,453
Cost of transportation 355,511 298,105 1,012,928 852,858
Net revenues 183,764 171,320 536,860 488,595
Operating expenses:
Personnel costs 104,463 94,846 306,036 270,383
Other selling, general and
administrative expenses 67,968 68,164 202,642 203,641
Merger related
restructuring and
integration costs -- 5,476 -- 5,476
Air Transportation Safety
Stabilization grant -- (8,923) -- (8,923)
Operating income 11,333 11,757 28,182 18,018
Nonoperating expense, net (2,397) (2,335) (4,348) (13,829)
Income before provision for
income taxes 8,936 9,422 23,834 4,189
Provision for income taxes 3,380 3,675 9,016 1,634
Income before cumulative
effect of change in
accounting for negative
goodwill 5,556 5,747 14,818 2,555
Cumulative effect of change
in accounting for negative
goodwill -- -- -- 213
Net income $5,556 $5,747 $14,818 $2,768
Basic earnings per share $0.12 $0.12 $0.31 $0.06
Diluted earnings per share $0.12 $0.12 $0.31 $0.06
Basic weighted-average
common shares outstanding 47,230 47,658 47,151 47,804
Diluted weighted-average
common shares outstanding 47,536 47,792 47,419 47,998
EGL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
September 30, December 31,
2003 2002
ASSETS
Current assets:
Cash, cash equivalents, restricted
cash and short-term investments $132,591 $119,295
Trade accounts receivable, net of
allowance 401,030 371,024
Other current assets 53,618 53,412
Total current assets 587,239 543,731
Property and equipment, net 159,085 158,214
Assets held for sale - 644
Investments in unconsolidated
affiliates 39,116 40,042
Goodwill, net 94,127 81,881
Other assets, net 32,380 18,414
Total assets $911,947 $842,926
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term notes
payable $8,993 $5,639
Trade payables and accrued
transportation costs 251,154 224,132
Accrued expenses 46,524 40,256
Other liabilities 64,263 73,004
Total current liabilities 370,934 343,031
Long-term notes payable 109,415 103,993
Deferred income taxes 14,563 3,720
Other noncurrent liabilities 8,821 6,789
Minority interest 6,243 8,852
Stockholders' equity 401,971 376,541
Total liabilities and stockholders'
equity $911,947 $842,926
EGL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Nine Months Ended
September 30,
Cash flows from operating activities: 2003 2002
Net income $14,818 $2,768
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 23,059 22,520
Bad debt expense 6,174 5,678
Amortization of unearned
compensation -- 476
Deferred income tax expense
(benefit) 3,862 (6,544)
Tax benefit of stock options
exercised 317 134
Equity in (earnings) loss of
affiliates 926 (663)
Minority interests 986 599
Transfer to restricted cash (5,383) (1,902)
Cumulative effect of change in
accounting for negative goodwill -- (213)
Impairment of investment in an
unconsolidated affiliate -- 6,653
Other (1,202) 1,613
Net effect of changes in working
capital, net of assets acquired 106 41,195
Net cash provided by operating
activities 43,663 72,314
Cash flows from investing activities:
Capital expenditures (19,507) (25,255)
Proceeds from sales of other
assets 2,623 7,567
Proceeds from sale-lease back
transactions 1,158 2,462
Cash received from a minority
interest partner -- 301
Dividend paid to a minority
interest partner (185) --
Acquisitions of businesses, net of
cash acquired (21,084) --
Net cash used in investing activities (36,995) (14,925)
Cash flows from financing activities:
Repayment of notes payable, net (1,913) (3,808)
Repurchase of common stock -- (9,357)
Issuance of common stock for
employee stock purchase plan 272 779
Proceeds from exercise of stock
options 3,033 330
Net cash provided by (used in)
financing activities 1,392 (12,056)
Effect of exchange rate changes on
cash (201) (1,056)
Increase in cash and cash equivalents 7,859 44,277
Cash and cash equivalents, beginning
of the period 111,477 77,440
Cash and cash equivalents, end of the
period $119,336 $121,717
Third quarter 2003 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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