8-KOther Events

EXPEDITORS INTERNATIONAL OF WASHINGTON INC 8-K Report (May 10, 2001)

Filed May 10, 2001For Securities:EXPD

Summary

Expeditors International of Washington, Inc. (EXPD) filed an 8-K on May 10, 2001, primarily addressing the cessation of their U.S. customs brokerage services for Ford Motor Company, effective May 1, 2001. While acknowledging the significance of this client, the company reiterated its long-standing strategy of maintaining a diversified customer base, with no single customer representing more than 5% of net revenue. Despite the loss of Ford's business, Expeditors reaffirmed its previously issued full-year 2001 earnings per share consensus estimate of $1.82, citing positive first-quarter results and expecting the financial impact of the Ford business loss to be between $0.03 and $0.04 per share for the remainder of the year, with a $0.06 per share after-tax impact in the second quarter due to shutdown and lost profit costs.

Key Highlights

  • 1Expeditors ceased functioning as Ford's U.S. customs broker as of May 1, 2001.
  • 2The company expects an after-tax impact of approximately $0.06 per share in Q2 2001 due to the loss of Ford business (staff, shutdown, and lost profits).
  • 3The impact on earnings per share for the balance of 2001 is expected to be between $0.03 and $0.04 per share.
  • 4Expeditors maintains its full-year 2001 consensus earnings per share estimate of $1.82.
  • 5Approximately 150 employees were impacted by the loss of Ford's business, with about 120 positions in Detroit.
  • 6The company is offering internal transfers and expects around 80 employees to decline alternative positions.
  • 7No impact has been observed on Expeditors' relationships with other customers or prospective customers due to the Ford situation.

Frequently Asked Questions

Expeditors estimates an after-tax impact of approximately $0.06 per share in the second quarter of 2001. For the balance of the year, the impact on earnings per share is expected to be between $0.03 and $0.04 per share.

No, Expeditors maintains its full-year 2001 consensus earnings per share estimate of $1.82. This decision is based on positive first-quarter results and the company's assessment of the impact from losing the Ford business.

Approximately 150 employees had their jobs impacted. Of these, about 120 positions were located in Detroit. Expeditors is offering internal transfers, but anticipates around 80 employees will decline these offers and leave the company.

Expeditors has stated that, to date, there have been no negative impacts on their relationships with other customers or prospective customers as a result of the changes with Ford.