10-QPeriod: Q2 FY2000

EXPEDITORS INTERNATIONAL OF WASHINGTON INC Quarterly Report for Q2 Ended Jun 30, 2000

Filed August 14, 2000For Securities:EXPD

Summary

Expeditors International of Washington, Inc. (EXPD) reported strong performance in its second quarter and first half of 2000, demonstrating significant revenue and net earnings growth compared to the prior year. Total revenues for the six months ended June 30, 2000, reached $753.5 million, an increase of over 22% from $615.7 million in the same period of 1999. Net earnings for the first half of 2000 were $31.5 million, up 38% from $22.8 million in the first half of 1999. This growth was driven by robust performance across all key segments: airfreight, ocean freight, and customs brokerage. The company also experienced a substantial increase in cash generated from operations, reflecting improved working capital management. The company's balance sheet shows healthy growth in cash and cash equivalents, which increased significantly from $71.2 million at December 31, 1999, to $128.6 million at June 30, 2000. While accounts receivable saw a slight decrease, overall current assets grew, indicating a strong liquidity position. EXPD maintains no long-term debt, relying on operating cash flow and short-term credit lines for liquidity. Management expresses confidence in the company's ability to meet its capital and liquidity requirements, projecting continued growth driven by organic expansion and strategic office openings in key global markets.

Key Highlights

  • 1Net earnings for the six months ended June 30, 2000, increased by 38% to $31.5 million, compared to $22.8 million in the prior year period.
  • 2Total revenues for the six months ended June 30, 2000, grew by over 22% to $753.5 million, driven by strong performance in airfreight, ocean freight, and customs brokerage.
  • 3Operating income for the six months ended June 30, 2000, rose by 37% to $48.6 million, indicating improved operational efficiency and profitability.
  • 4Cash provided by operating activities for the six months ended June 30, 2000, was $91.5 million, a significant increase from $17.7 million in the same period of 1999, highlighting strong cash generation.
  • 5Cash and cash equivalents increased substantially to $128.6 million at June 30, 2000, from $71.2 million at December 31, 1999.
  • 6The company opened five new offices in Europe, Asia, and Latin America during the second quarter of 2000, signaling strategic expansion into key growth markets.
  • 7Expeditors maintains a strong balance sheet with no long-term debt as of June 30, 2000, and a comfortable working capital position of $180 million.

Frequently Asked Questions

The significant increase in revenue and net earnings is primarily driven by strong organic growth across all of Expeditors' core services: airfreight, ocean freight, and customs brokerage. The company's expanding global network, coupled with its reputation for high-quality service and sophisticated computerized capabilities, has allowed it to gain market share and handle increased tonnage.

Expeditors' liquidity has significantly improved. Cash and cash equivalents more than doubled from $71.2 million at December 31, 1999, to $128.6 million at June 30, 2000. The company also generated substantial cash from operations ($91.5 million for the first six months of 2000) and maintains no long-term debt, indicating a strong and healthy financial position.

Expeditors focuses on a strategy of organic growth, supplemented by strategic acquisitions and the opening of new offices in key global markets. The recent opening of five new offices in Europe, Asia, and Latin America demonstrates this commitment to expanding its international reach and service offerings.

The company is exposed to foreign currency risk due to its global operations. Expeditors manages this risk primarily by accelerating international currency settlements among its offices and agents rather than relying on derivative financial instruments. While foreign currency gains and losses were immaterial in the reporting periods, the company continues to monitor these exposures.