10-KPeriod: FY2002

EXPEDITORS INTERNATIONAL OF WASHINGTON INC Annual Report, Year Ended Dec 31, 2002

Filed March 28, 2003For Securities:EXPD

Summary

Expeditors International of Washington, Inc. (EXPD) presents a robust financial profile in its 2003 10-K filing, highlighting its established global logistics services. The company focuses on airfreight, ocean freight, and customs brokerage, deriving significant net revenue from these core operations. EXPD emphasizes organic growth supplemented by strategic acquisitions, maintaining a strong competitive position through its extensive network, experienced personnel, and sophisticated IT capabilities. The filing indicates consistent revenue and net earnings growth over the past three years, demonstrating operational efficiency and effective cost management. Investors can note the company's healthy liquidity, with substantial working capital and cash generated from operations, and a lack of long-term debt, indicating a strong financial foundation.

Key Highlights

  • 1Expeditors International offers a comprehensive suite of global logistics services, including air and ocean freight forwarding and consolidation, and customs brokerage.
  • 2The company has demonstrated consistent year-over-year growth in revenues, net revenues, and net earnings from 2000 to 2002.
  • 3Airfreight services accounted for approximately 41-42% of net revenues, while customs brokerage and ocean freight services contributed 34-38% and 21-24%, respectively.
  • 4Expeditors prioritizes organic growth, supported by strategic acquisitions, and maintains a competitive edge through its global network and technological investments.
  • 5The company reported strong financial health with significant working capital ($249.4 million in 2002) and substantial cash generated from operating activities ($116 million in 2002).
  • 6Expeditors has no long-term debt, indicating a low-risk financial structure.
  • 7The company's operations are subject to seasonality, with the first quarter typically being the weakest and the third and fourth quarters being the strongest.

Frequently Asked Questions

Expeditors International of Washington, Inc. primarily operates in three segments: airfreight services, ocean freight and ocean services, and customs brokerage and import services. They also provide additional logistics solutions such as distribution management, vendor consolidation, and customized logistics information.

In airfreight and ocean freight services, Expeditors often acts as a consolidator. They purchase cargo space in bulk from airlines or ocean carriers at lower rates and resell it to customers. The net revenue, or 'yield,' is the difference between the rate charged to the customer and the cost paid to the carrier, along with fees for ancillary services. When they act as an agent, revenue is primarily from commissions and fees.

Expeditors primarily pursues organic growth by expanding its office network and service offerings. While open to strategic acquisitions and joint ventures, the company historically favors organic expansion due to challenges and goodwill associated with aggressive acquisitions seen in competitors. They also focus on developing innovative IT solutions to meet evolving customer needs.

Key risks include fluctuations in international trade influenced by economic and political conditions, currency exchange rates, and customs regulations. The company also relies on third-party vendors (airlines, steamship lines) and faces risks associated with personnel, technology advancements, and potential disruptions to international trade routes or operations.