10-QPeriod: Q3 FY2002

EXPEDITORS INTERNATIONAL OF WASHINGTON INC Quarterly Report for Q3 Ended Sep 30, 2002

Filed November 14, 2002For Securities:EXPD

Summary

Expeditors International of Washington, Inc. (EXPD) reported solid financial results for the nine months ended September 30, 2002, demonstrating robust growth and effective operational management. Total revenues increased by 15.3% to $1.6 billion, driven by strong performance across all key service areas: airfreight, ocean freight, and customs brokerage. Net earnings saw a healthy increase of 9.1% year-over-year, reaching $76.5 million, reflecting the company's ability to manage operating expenses effectively, with salaries and related costs as a percentage of net revenues remaining stable or decreasing slightly. The company's balance sheet remains strong, with total assets growing to $831.2 million and total shareholders' equity increasing to $492.7 million. Cash and cash equivalents significantly increased to $287.3 million, providing ample liquidity. Expeditors continues to focus on organic growth, with 'same store' net revenue growth at 6% and operating income growth at 9% for the nine-month period, underscoring the effectiveness of its business model and incentive-driven compensation structure. The company navigated the complexities of international trade and currency fluctuations, maintaining a competitive edge through quality service and sophisticated logistics solutions.

Key Highlights

  • 1Total revenues grew by 15.3% to $1.6 billion for the nine months ended September 30, 2002, compared to the prior year period.
  • 2Net earnings increased by 9.1% to $76.5 million for the nine months ended September 30, 2002.
  • 3Significant increase in cash and cash equivalents, reaching $287.3 million as of September 30, 2002, up from $218.7 million at the end of 2001.
  • 4Strong growth in Ocean freight and ocean services net revenues, up 16% for both the three and nine-month periods, driven by competitive rates and strategic market share expansion.
  • 5Customs brokerage and import services net revenues increased by 17% for the three-month period and 7% for the nine-month period, indicating a focus on profitable business.
  • 6"Same store" net revenue growth of 6% and operating income growth of 9% for the nine months ended September 30, 2002, highlights consistent internal growth.
  • 7Company maintains a strong liquidity position with $312.7 million in working capital and no long-term debt as of September 30, 2002.

Frequently Asked Questions

Revenue growth was primarily driven by strong performance across all key service segments: airfreight, ocean freight and ocean services, and customs brokerage and import services. The company saw a 15.3% increase in total revenues to $1.6 billion for the first nine months of 2002. Ocean freight and customs brokerage, in particular, showed robust net revenue increases.

Expeditors demonstrated improved profitability, with net earnings increasing by 9.1% to $76.5 million for the nine months ended September 30, 2002. This growth was achieved while managing operating expenses effectively, as evidenced by salaries and related costs as a percentage of net revenues remaining stable.

The company's financial health is strong. As of September 30, 2002, Expeditors had $287.3 million in cash and cash equivalents, a significant increase from the prior year. Working capital stood at $312.7 million, and the company has no long-term debt, indicating robust liquidity and financial stability.

The company adopted several new accounting pronouncements starting in 2002, including SFAS No. 142 (Goodwill and Other Intangible Assets), SFAS No. 144 (Impairment or Disposal of Long-Lived Assets), and EITF D-103 (Income Statement Characterization of Reimbursements). The adoption of these standards did not have a material effect on the company's financial statements, except for EITF D-103 which required reclassification for presentation consistency and had no impact on net revenue, operating income, or net earnings.