10-KPeriod: FY2021

EXPEDITORS INTERNATIONAL OF WASHINGTON INC Annual Report, Year Ended Dec 31, 2021

Filed March 15, 2022For Securities:EXPD

Summary

Expeditors International of Washington, Inc. (EXPD) reported a strong financial performance in 2021, driven by unprecedented imbalances in global supply chains. Despite significant disruptions from the COVID-19 pandemic, including reduced capacity and port congestion, the company saw a substantial increase in revenues and net earnings. This growth was fueled by historically high average buy and sell rates across air and ocean freight services, as well as increased volumes. The company also highlighted its robust financial position with significant operating cash flows and a strong liquidity position. A major concern for investors is the reported cyber-attack on February 20, 2022, which led to a shutdown of operating systems and is expected to have a material adverse impact on the business. While the company has partially resumed operations, the full extent of the financial and reputational damage is still under evaluation. Despite this, Expeditors' management remains focused on its long-term strategy of organic growth, customer service, and technological innovation, with plans for continued investment in these areas.

Financial Highlights

44 data points
Beta

Revenue

$16.52B

Net Income

$1.42B

8.6% Net Margin

EPS (Diluted)

$8.27

Total Assets

$7.61B

Cash & Equivalents

$1.73B

Free Cash Flow

$868.49M

Financial Statements
Beta
Revenue$16.52B
Operating Expenses$14.61B
Operating Income$1.91B
Interest Expense$411K
Net Income$1.42B
EPS (Basic)$8.37
EPS (Diluted)$8.27
Shares Outstanding (Basic)169.15M
Shares Outstanding (Diluted)171.25M

Key Highlights

  • 1Revenue and expenses surged by 72% and 81% respectively in 2021 due to high average rates and increased volumes, driven by global supply chain disruptions.
  • 2Net earnings attributable to shareholders more than doubled in 2021, increasing by 103% to $1.415 billion.
  • 3The company returned $710 million to shareholders through stock repurchases and dividends in 2021.
  • 4A significant cyber-attack occurred on February 20, 2022, leading to operational disruptions and an expected material adverse impact on the company's financial results and reputation.
  • 5Expeditors maintained a strong liquidity position with $1.729 billion in cash and cash equivalents and no long-term debt as of December 31, 2021.
  • 6The company continues to invest in technology and organic growth, with planned capital expenditures of $100 million in 2022.

Frequently Asked Questions

The primary driver was the unprecedented imbalance between carrier capacity and customer demand in global supply chains, exacerbated by the COVID-19 pandemic. This led to historically high average buy and sell rates for air and ocean freight, significantly boosting revenues and earnings.

Expeditors has stated that the cyber-attack is expected to have a material adverse impact on its business, revenues, expenses, results of operations, cash flows, and reputation. The company shut down most of its operating systems globally, and while operations have partially resumed, the full extent of the impact is still being assessed.

Expeditors operates as a non-asset-based provider, relying on relationships with airlines, ocean carriers, and ground transportation providers. They focus on maintaining strong partnerships and use their purchasing power to negotiate favorable rates. The company competes on price and quality of service and invests in technology to provide value-added services and maintain a competitive edge, distinguishing itself from competitors who often grow through acquisitions by focusing on organic growth and integrated systems.

Expeditors returns capital to shareholders through a combination of dividends and share repurchases. In 2021, the company repurchased 4.4 million shares of common stock and paid cash dividends, demonstrating a commitment to enhancing shareholder value.