Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced second quarter 2020 financial results including the following highlights compared to the same quarter of 2019:
- Diluted Net Earnings Attributable to Shareholders per share (EPS1) increased 24% to $1.09
- Net Earnings Attributable to Shareholders increased 20% to $184 million
- Operating Income increased 29% to $248 million
- Revenues increased 27% to $2.6 billion
- Airfreight tonnage volume decreased 10% and ocean container volume decreased 14%
“Like so many companies, the COVID-19-related impacts to our business have been significant and widespread, as the retail, auto, aviation, energy and other sectors continued to be severely disrupted by shutdowns and supply chain dislocations,” said Jeffrey S. Musser, President and Chief Executive Officer. “While volumes for all of our products were down, as we would have expected during such unprecedented conditions, our airfreight revenue was much greater than anticipated. The air market has been particularly unsettled, with the cancellation of so many passenger flights limiting access to passenger belly space and requiring the increased use of charters to meet customer needs. While air capacity has been tight, demand for shipping technology-related equipment, medical equipment and supplies and other priority goods has been intense, creating a supply and demand imbalance and a spike in buy and sell rates. Our employees’ ability to perform at an extremely high level during such turmoil attests to our strong relationships with our customers and carriers, as we were able to access capacity and execute well under such trying conditions. Airfreight buy and sell rates, which peaked in April and May and started to decline in June, remain highly volatile and continue to be unpredictable.
“Buy and sell rates were much less volatile across our other products, even as volumes were down due to COVID-19. Despite a decrease in ocean volumes throughout the marketplace, capacity remains tight as carriers have continued to take steps to manage their capacity and costs.
“Perhaps needless to say, these times have been very challenging for all of us and I appreciate how well our team has performed under such conditions. All of our offices around the world remain open and continue to serve our customers at the highest level, proving that our employees remain our most valuable assets. Our business is service-based and we believe that employee retention remains critical to our long-term success. To that end and true to our company culture, we did not lay off any employees, although headcount was down slightly due to normal employee attrition. We also increased paid sick leave to support those employees unfortunate to have either contracted COVID-19 or to have shown symptoms of the virus.
“We remain extremely appreciative to all of our dedicated employees, including those vital members who report to work each day to facilitate the essential movement of cargo around the world. We are also very thankful to the majority of our employees who have not yet been able to return to the in-person office environment and recognize the extra effort required to work under such conditions. To successfully manage our way through this pandemic, we relied on the strength of our highly connected information systems and have implemented our business continuity plans around the world in support of all of our employees to safeguard their health and safety.”
Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “Compared to a year ago, the effects of COVID-19 led to lower volumes for all products. Air tonnage out of North Asia, however, increased 14%, driven by goods needed to support remote work and to combat COVID-19. We are unable to remember a time when the operating environment has been so uncertain. Given that unpredictability, we will keep costs in check and focus on increasing operational efficiencies and gaining profitable market share. We will also use our strong financial position to continue to make investments in our strategic initiatives. Not knowing how or when the global economy will recover, we remain a strong, healthy, and unified organization that has demonstrated resiliency under the most trying conditions and believe we are well-prepared for the post-COVID economy, no matter what that looks like.”
Expeditors is a global logistics company headquartered in Seattle, Washington. The Company employs trained professionals in 176 district offices and numerous branch locations located on six continents linked into a seamless worldwide network through an integrated information management system. Services include the consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, time-definite transportation, order management, warehousing and distribution and customized logistics solutions.
_______________________ |
1Diluted earnings attributable to shareholders per share. |
NOTE: See Disclaimer on Forward-Looking Statements on the following page of this release. |
Expeditors International of Washington, Inc. | |||||||||||||||||||||||
Second Quarter 2020 Earnings Release, August 4, 2020 | |||||||||||||||||||||||
Financial Highlights for the three and six months ended June 30, 2020 and 2019 (Unaudited) | |||||||||||||||||||||||
(in 000's of US dollars except per share data) | |||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||||
Revenues | $ | 2,580,632 | $ | 2,035,579 | 27% | $ | 4,482,496 | $ | 4,055,630 | 11% | |||||||||||||
Directly related cost of transportation and other expenses1 | $ | 1,831,041 | $ | 1,373,884 | 33% | $ | 3,117,769 | $ | 2,739,821 | 14% | |||||||||||||
Salaries and other operating expenses2 | $ | 501,965 | $ | 469,494 | 7% | $ | 958,046 | $ | 936,007 | 2% | |||||||||||||
Operating income | $ | 247,626 | $ | 192,201 | 29% | $ | 406,681 | $ | 379,802 | 7% | |||||||||||||
Net earnings attributable to shareholders | $ | 183,869 | $ | 153,149 | 20% | $ | 306,213 | $ | 292,848 | 5% | |||||||||||||
Diluted earnings attributable to shareholders per share | $ | 1.09 | $ | 0.88 | 24% | $ | 1.80 | $ | 1.67 | 8% | |||||||||||||
Basic earnings attributable to shareholders per share | $ | 1.10 | $ | 0.90 | 22% | $ | 1.83 | $ | 1.71 | 7% | |||||||||||||
Diluted weighted average shares outstanding | 169,290 | 174,466 | 170,382 | 174,953 | |||||||||||||||||||
Basic weighted average shares outstanding | 166,767 | 171,003 | 167,751 | 171,425 | |||||||||||||||||||
_______________________ |
1Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings. |
2Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings |
During the three and six months ended June 30, 2020, we repurchased 0.4 million and 4.4 million shares of common stock at an average price of $77.46 and $71.41 per share, respectively. During the three and six months ended June 30, 2019, we repurchased 2.6 million and 3.2 million shares of common stock at an average price of $73.03 and $73.47 per share, respectively.
Employee Full-time Equivalents
| ||||||||
2020 | 2019 | |||||||
North America | 6,749 | 6,893 | ||||||
Europe | 3,419 | 3,439 | ||||||
North Asia | 2,413 | 2,532 | ||||||
South Asia | 1,654 | 1,661 | ||||||
Middle East, Africa and India | 1,528 | 1,550 | ||||||
Latin America | 823 | 873 | ||||||
Information Systems | 971 | 922 | ||||||
Corporate | 380 | 379 | ||||||
Total | 17,937 | 18,249 | ||||||
Second quarter year-over-year
| ||||||||
Airfreight
| Ocean freight
| |||||||
2020 | ||||||||
April | (7)% | (10)% | ||||||
May | (13)% | (17)% | ||||||
June | (12)% | (15)% | ||||||
Quarter | (10)% | (14)% | ||||||
Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on August 7, 2020 will be considered in management's 8-K “Responses to Selected Questions.”
Disclaimer on Forward-Looking Statements:
Certain portions of this release contain forward-looking statements, which are based on certain assumptions and expectations of future events that are subject to risks and uncertainties, including the impacts to our business as a result of the Novel Coronavirus (COVID-19); our employees’ ability to continue to perform at a high level; airfreight buy and sell rates; our access to carrier capacity; our ability to keep our global offices open and operating; employee retention; employee health and safety; our ability to execute our business continuity plans; the strength of our financial position and our ability to continue to make investments in our strategic initiatives; our ability to remain a strong, healthy, unified and resilient organization; the impact of the 2017 Tax Act and related interpretations on our effective tax rate. The COVID-19 pandemic could have the effect of heightening many of the other risks described in Item 1A of our Annual Report on Form 10-K, including, without limitation, those related to the success of our strategy and desire to maintain historical unitary profitability, our ability to attract and retain customers, our ability to manage costs, interruptions to our information technology systems, the ability of third-party providers to perform and potential litigation as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission.
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. | ||||||||
AND SUBSIDIARIES | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(In thousands, except per share data) | ||||||||
(Unaudited) | ||||||||
June 30, 2020 | December 31, 2019 | |||||||
Assets: | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 1,180,455 | $ | 1,230,491 | ||||
Accounts receivable, less allowance for credit loss of $5,347 at June 30, 2020 and $11,143 at December 31, 2019 | 1,460,324 | 1,315,091 | ||||||
Deferred contract costs | 147,932 | 131,783 | ||||||
Other | 69,560 | 92,558 | ||||||
Total current assets | 2,858,271 | 2,769,923 | ||||||
Property and equipment, less accumulated depreciation and amortization of $494,773 at June 30, 2020 and $478,906 at December 31, 2019 | 497,762 | 499,344 | ||||||
Operating lease right-of-use assets | 424,516 | 390,035 | ||||||
Goodwill | 7,927 | 7,927 | ||||||
Deferred federal and state income taxes, net | 5,300 | 8,034 | ||||||
Other assets, net | 16,401 | 16,621 | ||||||
Total assets | $ | 3,810,177 | $ | 3,691,884 | ||||
Liabilities: | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 755,971 | $ | 735,695 | ||||
Accrued expenses, primarily salaries and related costs | 257,923 | 189,446 | ||||||
Contract liabilities | 172,148 | 154,183 | ||||||
Current portion of operating lease liabilities | 69,740 | 65,367 | ||||||
Federal, state and foreign income taxes | 32,287 | 23,627 | ||||||
Total current liabilities | 1,288,069 | 1,168,318 | ||||||
Noncurrent portion of operating lease liabilities | 360,510 | 326,347 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ Equity: | ||||||||
Preferred stock, none issued | — | — | ||||||
Common stock, par value $0.01 per share. Issued and outstanding: 166,816 shares at June 30, 2020 and 169,622 shares at December 31, 2019 | 1,668 | 1,696 | ||||||
Additional paid-in capital | 12,221 | 3,203 | ||||||
Retained earnings | 2,298,387 | 2,321,316 | ||||||
Accumulated other comprehensive loss | (153,158 | ) | (131,187 | ) | ||||
Total shareholders’ equity | 2,159,118 | 2,195,028 | ||||||
Noncontrolling interest | 2,480 | 2,191 | ||||||
Total equity | 2,161,598 | 2,197,219 | ||||||
Total liabilities and equity | $ | 3,810,177 | $ | 3,691,884 | ||||
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. | ||||||||||||||||
AND SUBSIDIARIES | ||||||||||||||||
Condensed Consolidated Statements of Earnings | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Revenues: | ||||||||||||||||
Airfreight services | $ | 1,434,590 | $ | 741,577 | $ | 2,143,629 | $ | 1,456,478 | ||||||||
Ocean freight and ocean services | 491,712 | 543,809 | 985,139 | 1,112,450 | ||||||||||||
Customs brokerage and other services | 654,330 | 750,193 | 1,353,728 | 1,486,702 | ||||||||||||
Total revenues | 2,580,632 | 2,035,579 | 4,482,496 | 4,055,630 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Airfreight services | 1,097,073 | 542,639 | 1,617,242 | 1,051,849 | ||||||||||||
Ocean freight and ocean services | 363,599 | 390,299 | 730,082 | 810,630 | ||||||||||||
Customs brokerage and other services | 370,369 | 440,946 | 770,445 | 877,342 | ||||||||||||
Salaries and related | 395,107 | 356,351 | 737,147 | 713,261 | ||||||||||||
Rent and occupancy | 41,375 | 40,897 | 83,899 | 82,420 | ||||||||||||
Depreciation and amortization | 14,109 | 12,677 | 26,769 | 26,070 | ||||||||||||
Selling and promotion | 3,113 | 11,643 | 11,356 | 22,719 | ||||||||||||
Other | 48,261 | 47,926 | 98,875 | 91,537 | ||||||||||||
Total operating expenses | 2,333,006 | 1,843,378 | 4,075,815 | 3,675,828 | ||||||||||||
Operating income | 247,626 | 192,201 | 406,681 | 379,802 | ||||||||||||
Other Income (Expense): | ||||||||||||||||
Interest income | 2,559 | 6,516 | 7,366 | 12,622 | ||||||||||||
Other, net | 797 | 2,262 | 4,181 | 3,927 | ||||||||||||
Other income, net | 3,356 | 8,778 | 11,547 | 16,549 | ||||||||||||
Earnings before income taxes | 250,982 | 200,979 | 418,228 | 396,351 | ||||||||||||
Income tax expense | 66,794 | 47,449 | 111,258 | 102,710 | ||||||||||||
Net earnings | 184,188 | 153,530 | 306,970 | 293,641 | ||||||||||||
Less net earnings attributable to the noncontrolling interest | 319 | 381 | 757 | 793 | ||||||||||||
Net earnings attributable to shareholders | $ | 183,869 | $ | 153,149 | $ | 306,213 | $ | 292,848 | ||||||||
Diluted earnings attributable to shareholders per share | $ | 1.09 | $ | 0.88 | $ | 1.80 | $ | 1.67 | ||||||||
Basic earnings attributable to shareholders per share | $ | 1.10 | $ | 0.90 | $ | 1.83 | $ | 1.71 | ||||||||
Weighted average diluted shares outstanding | 169,290 | 174,466 | 170,382 | 174,953 | ||||||||||||
Weighted average basic shares outstanding | 166,767 | 171,003 | 167,751 | 171,425 | ||||||||||||
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. | ||||||||||||||||
AND SUBSIDIARIES | ||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Operating Activities: | ||||||||||||||||
Net earnings | $ | 184,188 | $ | 153,530 | $ | 306,970 | $ | 293,641 | ||||||||
Adjustments to reconcile net earnings to net cash from operating activities: | ||||||||||||||||
Provisions for losses (recoveries) on accounts receivable | 2,389 | 1,584 | 4,209 | (304 | ) | |||||||||||
Deferred income tax expense | 9,287 | 3,697 | 4,148 | 5,805 | ||||||||||||
Stock compensation expense | 21,638 | 23,824 | 32,794 | 37,206 | ||||||||||||
Depreciation and amortization | 14,109 | 12,677 | 26,769 | 26,070 | ||||||||||||
Other, net | 118 | (29 | ) | 551 | 160 | |||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
(Increase) decrease in accounts receivable | (185,055 | ) | (28,187 | ) | (168,375 | ) | 202,290 | |||||||||
Increase (decrease) in accounts payable and accrued expenses | 106,760 | 39,900 | 107,677 | (82,383 | ) | |||||||||||
(Increase) decrease in deferred contract costs | (2,333 | ) | (13,010 | ) | (18,401 | ) | 18,249 | |||||||||
(Decrease) increase in contract liabilities | (595 | ) | 13,003 | 20,606 | (23,722 | ) | ||||||||||
Increase (decrease) in income taxes payable, net | 20,154 | (49,606 | ) | 30,642 | (32,613 | ) | ||||||||||
Decrease (increase) in other, net | 16,061 | (1,676 | ) | 4,131 | 791 | |||||||||||
Net cash from operating activities | 186,721 | 155,707 | 351,721 | 445,190 | ||||||||||||
Investing Activities: | ||||||||||||||||
Purchase of property and equipment | (22,114 | ) | (12,987 | ) | (28,241 | ) | (22,422 | ) | ||||||||
Other, net | (68 | ) | 1,038 | (211 | ) | 1,293 | ||||||||||
Net cash from investing activities | (22,182 | ) | (11,949 | ) | (28,452 | ) | (21,129 | ) | ||||||||
Financing Activities: | ||||||||||||||||
Proceeds from issuance of common stock | 29,187 | 32,287 | 52,586 | 59,477 | ||||||||||||
Repurchases of common stock | (30,985 | ) | (190,589 | ) | (314,225 | ) | (234,923 | ) | ||||||||
Dividends Paid | (86,815 | ) | (85,184 | ) | (86,815 | ) | (85,184 | ) | ||||||||
Payments for taxes related to net share settlement of equity awards | (9,170 | ) | (6,674 | ) | (10,566 | ) | (6,674 | ) | ||||||||
Net cash from financing activities | (97,783 | ) | (250,160 | ) | (359,020 | ) | (267,304 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 1,726 | (377 | ) | (14,285 | ) | 2,158 | ||||||||||
Change in cash and cash equivalents | 68,482 | (106,779 | ) | (50,036 | ) | 158,915 | ||||||||||
Cash and cash equivalents at beginning of period | 1,111,973 | 1,189,429 | 1,230,491 | 923,735 | ||||||||||||
Cash and cash equivalents at end of period | $ | 1,180,455 | $ | 1,082,650 | $ | 1,180,455 | $ | 1,082,650 | ||||||||
Taxes Paid: | ||||||||||||||||
Income taxes | $ | 38,504 | $ | 97,715 | $ | 73,808 | $ | 134,968 | ||||||||
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. | ||||||||||||||||||||||||||||||||||||
AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||||
Business Segment Information | ||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
UNITED STATES | OTHER NORTH AMERICA | LATIN AMERICA | NORTH ASIA | SOUTH ASIA | EUROPE | MIDDLE EAST, AFRICA AND INDIA | ELIMI- NATIONS | CONSOLI- DATED | ||||||||||||||||||||||||||||
For the three months ended June 30, 2020: | ||||||||||||||||||||||||||||||||||||
Revenues1 | $ | 639,231 | 74,314 | 37,553 | 1,117,058 | 224,313 | 387,430 | 101,611 | (878 | ) | 2,580,632 | |||||||||||||||||||||||||
Directly related cost of transportation and other expenses2 | $ | 354,624 | 41,449 | 22,701 | 907,915 | 160,355 | 271,540 | 72,908 | (451 | ) | 1,831,041 | |||||||||||||||||||||||||
Salaries and other operating expenses3 | $ | 207,703 | 25,283 | 12,112 | 97,171 | 39,184 | 95,757 | 25,188 | (433 | ) | 501,965 | |||||||||||||||||||||||||
Operating income | $ | 76,904 | 7,582 | 2,740 | 111,972 | 24,774 | 20,133 | 3,515 | 6 | 247,626 | ||||||||||||||||||||||||||
Identifiable assets at period end | $ | 1,886,463 | 170,873 | 72,912 | 669,335 | 213,007 | 581,988 | 221,381 | (5,782 | ) | 3,810,177 | |||||||||||||||||||||||||
Capital expenditures | $ | 19,076 | 1,148 | 216 | 385 | 182 | 993 | 114 | — | 22,114 | ||||||||||||||||||||||||||
Equity | $ | 1,399,124 | 71,165 | 29,758 | 306,022 | 108,777 | 168,060 | 116,279 | (37,587 | ) | 2,161,598 | |||||||||||||||||||||||||
For the three months ended June 30, 2019: | ||||||||||||||||||||||||||||||||||||
Revenues1 | $ | 681,076 | 85,537 | 38,757 | 621,951 | 181,380 | 319,331 | 108,311 | (764 | ) | 2,035,579 | |||||||||||||||||||||||||
Directly related cost of transportation and other expenses2 | $ | 386,093 | 50,336 | 22,043 | 487,554 | 132,487 | 220,676 | 75,089 | (394 | ) | 1,373,884 | |||||||||||||||||||||||||
Salaries and other operating expenses3 | $ | 207,060 | 26,343 | 14,368 | 69,944 | 33,380 | 89,340 | 29,423 | (364 | ) | 469,494 | |||||||||||||||||||||||||
Operating income | $ | 87,923 | 8,858 | 2,346 | 64,453 | 15,513 | 9,315 | 3,799 | (6 | ) | 192,201 | |||||||||||||||||||||||||
Identifiable assets at period end | $ | 1,819,718 | 176,151 | 73,197 | 580,311 | 193,771 | 581,518 | 229,692 | (7,368 | ) | 3,646,990 | |||||||||||||||||||||||||
Capital expenditures | $ | 8,985 | 768 | 145 | 300 | 428 | 1,914 | 447 | — | 12,987 | ||||||||||||||||||||||||||
Equity | $ | 1,303,381 | 83,417 | 31,014 | 282,192 | 107,229 | 168,570 | 109,790 | (33,199 | ) | 2,052,394 | |||||||||||||||||||||||||
UNITED STATES | OTHER NORTH AMERICA | LATIN AMERICA | NORTH ASIA | SOUTH ASIA | EUROPE | MIDDLE EAST, AFRICA AND INDIA | ELIMI- NATIONS | CONSOLI- DATED | ||||||||||||||||||||||||||||
For the six months ended June 30, 2020: | ||||||||||||||||||||||||||||||||||||
Revenues1 | $ | 1,289,638 | 156,145 | 75,443 | 1,655,013 | 393,355 | 708,070 | 206,650 | (1,818 | ) | 4,482,496 | |||||||||||||||||||||||||
Directly related cost of transportation and other expenses2 | $ | 728,585 | 87,339 | 46,466 | 1,333,216 | 281,637 | 493,538 | 147,884 | (896 | ) | 3,117,769 | |||||||||||||||||||||||||
Salaries and other operating expenses3 | $ | 433,647 | 48,995 | 23,861 | 154,604 | 69,092 | 177,611 | 51,138 | (902 | ) | 958,046 | |||||||||||||||||||||||||
Operating income | $ | 127,406 | 19,811 | 5,116 | 167,193 | 42,626 | 36,921 | 7,628 | (20 | ) | 406,681 | |||||||||||||||||||||||||
Identifiable assets at period end | $ | 1,886,463 | 170,873 | 72,912 | 669,335 | 213,007 | 581,988 | 221,381 | (5,782 | ) | 3,810,177 | |||||||||||||||||||||||||
Capital expenditures | $ | 23,573 | 1,209 | 318 | 710 | 370 | 1,638 | 423 | — | 28,241 | ||||||||||||||||||||||||||
Equity | $ | 1,399,124 | 71,165 | 29,758 | 306,022 | 108,777 | 168,060 | 116,279 | (37,587 | ) | 2,161,598 | |||||||||||||||||||||||||
For the six months ended June 30, 2019: | ||||||||||||||||||||||||||||||||||||
Revenues1 | $ | 1,340,859 | 176,947 | 72,936 | 1,254,804 | 358,559 | 632,021 | 220,986 | (1,482 | ) | 4,055,630 | |||||||||||||||||||||||||
Directly related cost of transportation and other expenses2 | $ | 753,448 | 106,576 | 41,158 | 986,200 | 262,298 | 436,571 | 154,592 | (1,022 | ) | 2,739,821 | |||||||||||||||||||||||||
Salaries and other operating expenses3 | $ | 425,475 | 50,553 | 26,796 | 138,371 | 64,841 | 172,183 | 58,234 | (446 | ) | 936,007 | |||||||||||||||||||||||||
Operating income | $ | 161,936 | 19,818 | 4,982 | 130,233 | 31,420 | 23,267 | 8,160 | (14 | ) | 379,802 | |||||||||||||||||||||||||
Identifiable assets at period end | $ | 1,819,718 | 176,151 | 73,197 | 580,311 | 193,771 | 581,518 | 229,692 | (7,368 | ) | 3,646,990 | |||||||||||||||||||||||||
Capital expenditures | $ | 15,900 | 996 | 238 | 644 | 604 | 2,896 | 1,144 | — | 22,422 | ||||||||||||||||||||||||||
Equity | $ | 1,303,381 | 83,417 | 31,014 | 282,192 | 107,229 | 168,570 | 109,790 | (33,199 | ) | 2,052,394 | |||||||||||||||||||||||||
1Beginning in the second quarter of 2019, the Company revised its process to record the transfer, between its geographic operating segments, of revenues and the directly related cost of transportation and other expenses for freight service transactions between Company origin and destination locations. This change better aligns revenue reporting with the location where the services are performed, as well as the transactional reporting being developed as part of the Company’s new accounting systems and processes. The change in presentation had no impact on consolidated or segment operating income. The impact of these changes on reported segment revenues was immaterial and in the six months ended June 30, 2019, segment revenues have not been revised. |
2Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings. |
3Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings. |
The Company’s consolidated financial results in the first and second quarter 2020 were significantly impacted by the effects of the global pandemic and are expected to be further impacted in the remainder of 2020. The impact is affecting the Company’s geographical segments unevenly.
In the second quarter of 2020, North Asia experienced significant increases in airfreight services revenues and related expenses as a result of demand for time-sensitive delivery of technology equipment and medical equipment and supplies from China, which combined with reductions in airfreight supply resulted in significantly higher rates. In the second quarter 2020 and 2019, the People's Republic of China, including Hong Kong, represented 37% and 26%, respectively, of the Company’s total revenues and 38% and 28%, respectively, of the Company’s total operating income.
This is in contrast with slower activity in North Asia in the first quarter of 2020 as the global pandemic resulted in temporary closures and limited operations from the Company’s China offices and shipments that were rerouted or delayed by customers and service providers taking their own precautionary measures. In the first half of 2020 and 2019, the People's Republic of China, including Hong Kong, represented 31% and 26%, respectively, of the Company’s total revenues and 33% and 28%, respectively, of the Company’s total operating income.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200804005305/en/
Contacts:
President and Chief Executive Officer
(206) 674-3433
