<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended September 30, 1998
Commission file number: 1-8306
AIR EXPRESS INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-2074327
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
120 Tokeneke Road, Darien, Connecticut 06820
(203) 655-7900
(Address of, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
NONE
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 3 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date (applicable only to corporate
registrants).
The number of shares of common stock outstanding as of November 9, 1998
was 33,777,724 (Net of 1,217,586 Treasury Shares).
<PAGE>
AIR EXPRESS INTERNATIONAL CORPORATION
September 1998 Form 10-Q Quarterly Report
Table of Contents
Part I - Financial Information
Page
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as at
September 30, 1998 and December 31, 1997..................... 2
Condensed Consolidated Statements of Operations -
Three Months and Nine Months Ended September 30, 1998
and 1997..................................................... 3
Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1998
and 1997..................................................... 4
Notes to Condensed Consolidated Financial
Statements................................................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................................ 8
Part II - Other Information
Item 1. Legal Proceedings..................................................12
Item 6. Exhibits and Reports on Form 8-K...................................12
<PAGE>
Page 2
<TABLE>
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Sept 30, 1998 Dec 31,1997
(Unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents ......................... $ 55,870 $ 67,576
Accounts receivable, (less allowance for
doubtful accounts of $4,353 and $4,224) .......... 367,506 366,159
Other current assets .............................. 7,027 8,344
Total current assets ........................ 430,403 442,079
Investment in unconsolidated affiliates .............. 27,845 19,174
Restricted funds ..................................... 5,036 15,957
Property, plant and equipment (less accumulated
depreciation and amortization of $66,392
and $57,235) ........................................ 73,691 60,441
Deposits and other assets ............................ 18,349 17,386
Goodwill (less accumulated amortization
of $14,645 and $12,424) ............................. 97,439 83,104
Total assets ................................ $ 652,763 $ 638,141
Liabilities and stockholders' investment
Current Liabilities:
Current portion of long-term debt ................. $ 3,037 $ 2,654
Bank overdrafts payable ........................... 1,735 315
Transportation payables ........................... 155,109 174,125
Accounts payable .................................. 72,585 58,373
Accrued liabilities ............................... 64,793 61,263
Income taxes payable .............................. 8,197 10,168
Total current liabilities ................... 305,456 306,898
Long-term debt .................................... 35,910 31,008
Other liabilities ................................. 11,611 8,673
Total liabilities ........................... 352,977 346,579
Stockholders' Investment:
Capital stock-
Preferred (authorized 1,000,000 shares,
none outstanding) ................................ -- --
Common, $.01 par value (authorized 100,000,000
shares, issued 34,979,155 and 34,676,626 shares).. 350 347
Additional paid-in capital ........................ 146,971 142,674
Accumulated other comprehensive income ............ (33,378) (28,961)
Retained earnings ................................. 211,437 180,887
325,380 294,947
Less: 1,217,586 and 132,388 shares of treasury stock,
at cost ....................................... (25,594) (3,385)
Total stockholders' investment .................... 299,786 291,562
Total liabilities and stockholders' investment .... $ 652,763 $ 638,141
</TABLE>
The accompanying notes are an integral part
of these financial statements.
<PAGE>
Page 3
<TABLE>
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except
per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenues ................... $ 372,961 $ 395,405 $1,123,831 $1,133,151
Operating expenses:
Transportation ............ 249,068 270,401 759,050 773,450
Terminal .................. 67,027 68,008 200,959 196,521
Selling, general and
administrative ........... 38,236 37,258 112,399 111,744
Operating profit ........... 18,630 19,738 51,423 51,436
Other income:
Interest, net ............. 566 375 1,556 853
Other, net ................ 1,208 1,179 4,849 3,531
1,774 1,554 6,405 4,384
Income before provision
for income taxes .......... 20,404 21,292 57,828 55,820
Provision for income taxes . 7,394 7,929 21,427 20,876
Net income ................. $ 13,010 $ 13,363 $ 36,401 $ 34,944
Income per common share:
Basic ................. $ .38 $ .39 $ 1.05 $ 1.02
Diluted ............... $ .38 $ .38 $ 1.04 $ 1.00
Weighted average number
of common shares:
Basic ................. 34,314 34,428 34,530 34,302
Diluted ............... 34,633 35,446 35,006 35,034
</TABLE>
<PAGE>
Page 4
<TABLE>
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Dollars in thousands)
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net income ......................................... $ 36,401 $ 34,944
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ................... 10,256 9,868
Amortization of goodwill ........................ 2,001 1,935
Deferred income taxes ........................... 3,158 (85)
Equity in earnings of unconsolidated affiliates . (2,059) (1,834)
(Gains) losses on sales of assets ................ (15) 12
Changes in assets and liabilities, net of
business acquisitions:
Decrease (increase) in accounts receivable, net . 4,109 (31,143)
Decrease (increase) in other current assets ..... 2,048 (557)
(Increase) in other assets ....................... (945) (1,456)
(Decrease) increase in transportation payables ... (22,554) 28,357
Increase in accounts payable .................... 8,374 2,620
Increase in accrued liabilities ................. 2,051 816
(Decrease) in income taxes payable ............... (1,119) (5,229)
Increase (decrease) in other liabilities ........ 157 (75)
Total adjustments ........................... 5,462 3,229
Net cash provided by operating activities ...... 41,863 38,173
Cash flows from investing activities:
Acquisitions, net of cash acquired ............... (10,568) --
Restricted funds ................................. 10,921 (18,692)
Other investing activities ....................... 1,370 700
Proceeds from sales of assets .................... 968 624
Capital expenditures ............................. (24,442) (12,038)
Investment in unconsolidated affiliates .......... (7,101) (3,776)
Net cash used in investing activities .......... (28,852) (33,182)
Cash flows from financing activities:
Net borrowings (repayments) in bank overdrafts
payable ........................................... 1,490 (418)
Additions to long-term debt ........................ 271 19,055
Payment of long-term debt .......................... (1,455) (1,564)
Issuance of common stock ........................... 3,402 4,932
Payment of cash dividends .......................... (5,553) (4,466)
Purchase of treasury stock ......................... (22,209) (2,679)
Net cash (used) provided by financing
activities .................................... (24,054) 14,860
Effect of foreign currency exchange rates on cash ...... (663) (2,021)
Net (decrease) increase in cash and cash equivalents ... (11,706) 17,830
Cash and cash equivalents at beginning of period ....... 67,576 46,516
Cash and cash equivalents at end of period ............. $ 55,870 $ 64,346
</TABLE>
The accompanying notes are an integral part
of these financial statements.
<PAGE>
Page 5
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. The consolidated balance sheet at September 30, 1998, the consolidated
statements of operations for the three-month and nine-month periods
ended September 30, 1998 and 1997, and the consolidated statements of
cash flows for the nine-month periods ended September 30, 1998 and 1997
were prepared by the Company without audit. In the opinion of
management, all adjustments necessary to present fairly the financial
position, results of operations, and cash flows for the interim periods
were made. Certain items in the September 30, 1997 financial statements
were reclassified to conform to the classification of September 30, 1998
financial statements.
Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with generally accepted
accounting principles, were condensed or omitted. Accordingly, these
condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's annual report to stockholders for the year
ended December 31, 1997.
Statements included herein which are not historical facts are
forward-looking statements. These statements are based upon information
available to the Company on the date hereof. Inherent in these
statements are a variety of risks and other factors, both known and
unknown, which may cause the Company's actual results to differ
materially from those in forward-looking statements. Accordingly, the
realization of forward-looking statements is not certain, and all such
statements should be evaluated based upon the applicable risks and
uncertainties affecting the Company. Consequently, the results of
operations for the three-month and nine-month periods ended September
30, 1998 are not necessarily indicative of the results of operations
expected for the full year ending December 31, 1998.
B. Interest, net was as follows:
<TABLE>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Interest expense ........... $ (380) $ (310) $(1,046) $(1,089)
Interest income ............ 946 685 2,602 1,942
$ 566 $ 375 $ 1,556 $ 853
</TABLE>
C. Other, net was as follows:
<TABLE>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Equity in earnings of
unconsolidated affiliates.. $ 1,132 $ 986 $ 3,902 $2,603
Foreign exchange gains...... 92 171 932 940
Other....................... (16) 22 15 (12)
$ 1,208 $ 1,179 $ 4,849 $3,531
</TABLE>
<PAGE>
Page 6
D. Supplemental disclosures of cash flow information:
<TABLE>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Interest and income
taxes paid:
Interest ............... $ 197 $ 101 $ 714 $ 652
Income taxes ........... 5,960 5,014 18,462 19,458
$ 6,157 $ 5,115 $19,176 $20,110
</TABLE>
Non-cash investing and financing activities:
During the second quarter of 1998, as part of an acquisition, the Company
issued a $6.0 million note. See Note F.
E. Comprehensive income:
<TABLE>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net income .................... $13,010 $13,363 $36,401 $34,944
Other comprehensive income:
Translation of foreign
currency financial
statements................... 3,472 (2,937) (3,885) (7,824)
Income tax (expense) benefit .. (394) -- (532) 681
3,078 (2,937) (4,417) (7,143)
Comprehensive income .......... $16,088 $10,426 $31,984 $27,801
</TABLE>
<PAGE>
Page 7
F. Acquisitions:
During the first nine months of 1998, the Company made three acquisitions
- Aero Expreso Internacional ("Aero Expreso"), Gulf Coast Drawback
Services, Inc. ("Gulf Coast") and Associated Customhouse Brokers, Inc.
("ACB"). Aero Expreso, based in Buenos Aires, is a long-time agent of the
Company and the largest inbound forwarder and customs broker in Argentina.
Gulf Coast is the largest provider of specialized duty drawback services
in the United States. ACB, headquartered in Rochester, New York, provides
customs brokerage and freight forwarding services primarily in the upstate
New York region. The total paid for these acquisitions was approximately
$18.8 million, which was comprised of $12.8 million of cash and a $6.0
million note. The acquisitions were accounted for as purchases.
Accordingly, the purchase price was allocated on the basis of the
estimated fair market value of the assets acquired and the liabilities
assumed. The total cost in excess of the net assets acquired was
approximately $16.2 million, which is being amortized over 40 years. The
results of operations for these acquisitions were included in the
Consolidated Statement of Operations from the dates of acquisition and had
no material pro forma impact on the Company's results of operations or
financial position.
<PAGE>
Page 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
The Company considers its total business to represent a single segment
comprised of three major services: airfreight forwarding, ocean freight
forwarding, and customs brokerage and other services, all of which are fully
integrated. The following table sets forth the gross revenues and net revenues
(gross revenues minus transportation expenses) for each of these three service
categories, as well as the Company's internal operating expenses (terminal,
selling, general and administrative expenses) and operating profit:
<TABLE>
Three Months Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Gross Revenues:
Airfreight .................... $ 282.2 $ 305.9 $ 865.2 $ 875.2
Ocean freight ................. 52.5 54.3 147.4 152.0
Customs brokerage and other ... 38.3 35.2 111.2 106.0
Total Gross Revenues ........ $ 373.0 $ 395.4 $ 1,123.8 $ 1,133.2
Net Revenues:
Airfreight .................... $ 77.5 $ 79.7 $ 230.1 $ 226.2
Ocean freight ................. 16.1 15.4 45.1 43.9
Customs brokerage and other ... 30.3 29.9 89.6 89.6
Total Net Revenues .......... 123.9 125.0 364.8 359.7
Internal Operating Expenses:
Terminal ...................... 67.0 68.0 201.0 196.5
Selling, general and
administrative ............... 38.3 37.3 112.4 111.8
Total Internal Operating
Expenses ................... 105.3 105.3 313.4 308.3
Operating Profit ................ $ 18.6 $ 19.7 $ 51.4 $ 51.4
</TABLE>
Consolidated gross revenues for the third quarter and first nine months of
1998, decreased 5.7% to $373.0 million and .8% to $1,123.8 million,
respectively, over the comparable periods in 1997. Gross revenues for the
quarter and nine months were negatively impacted by approximately $14.5 million
and $55.5 million, respectively, due to the effect of a stronger U.S. dollar
when converting foreign currency revenues into U.S. dollars for financial
reporting purposes. Consolidated net revenues for the third quarter and first
nine months of 1998 decreased .9% to $123.9 million and increased 1.4% to $364.8
million, respectively, over the comparable 1997 periods.
Gross airfreight revenues for the third quarter and first nine months of
1998 decreased 7.7% to $282.2 million and 1.1% to $865.2 million, respectively,
over the comparable 1997 periods. The decreases in gross airfreight revenues for
the third quarter and first nine months of 1998 were mainly attributable to
economic difficulties in Southeast Asian economies and declines in shipping
volumes from the Company's computer-related customers. The airfreight gross
<PAGE>
Page 9
margin (net revenues as a percentage of gross revenues) for the third quarter
and first nine months of 1998 increased 1.4% to 27.5% and .8% to 26.6%,
respectively, over the comparable 1997 periods. The increases were mainly due to
improved product mix allowing for better utilization of airfreight
containers/pallets and lower transportation costs.
Ocean freight gross revenues for the third quarter and first nine months of
1998 decreased $1.8 million (3.3%) and $4.6 million (3.0%), respectively, over
the comparable 1997 periods. Ocean freight net revenues for the third quarter
and first nine months of 1998 increased $.7 million (4.5%) and $1.2 million
(2.7%), respectively, over the comparable 1997 periods. Excluding the effects
from the sale of the Company's 60% - owned foreign subsidiary, which was sold
during the fourth quarter of 1997, ocean freight gross revenues for the third
quarter and first nine months of 1998 increased $3.3 million (6.7%) and $10.1
million (7.4%), respectively, over the comparable 1997 periods. Additionally,
ocean freight net revenues for the same periods increased $1.6 million (11.0%)
and $3.9 million (9.5%). The increases in both gross and net ocean freight
revenues were due to increased shipping volumes from existing customers and the
Company's continuing expansion into the ocean freight market.
Customs brokerage and other gross revenues for the third quarter and first
nine months of 1998 increased 8.8% to $38.3 million and 4.9% to $111.2 million,
respectively, over the comparable 1997 periods. Customs brokerage and other net
revenues for the third quarter increased 1.3% to $30.3 million while the first
nine months of 1998 was unchanged compared to the first nine months of 1997. The
increases in customs brokerage and other gross revenues for the third quarter
and first nine months of 1998 were mainly due to the increase in brokerage
activity in the United States.
Internal operating expenses for the third quarter of 1998 were unchanged
compared to the third quarter of 1997. For the first nine months of 1998,
internal operating expenses increased $5.1 million or 1.7% over the comparable
1997 period.
Operating profit for the third quarter of 1998 decreased $1.1 million or
5.6% over the third quarter of 1997. For the first nine months of 1998,
operating profit was marginally lower than the comparable 1997 period.
Other, net increased marginally for the third quarter and $1.3 million for
the first nine months of 1998 over the comparable 1997 periods. The increases
were mainly attributable to the results from the Company's equity in the
earnings of its unconsolidated affiliates.
The effective income tax rate for the third quarter of 1998 decreased 1.0%
to 36.2% as compared with the third quarter of 1997. For the first nine months
of 1998 the effective tax rate declined .3% to 37.1% when compared with the
first nine months of 1997. The decreases were largely the result of a shift in
the mix of worldwide earnings to countries with lower effective tax rates.
<PAGE>
Page 10
Liquidity and Capital Resources
At September 30, 1998, cash and cash equivalents decreased approximately
$11.7 million to $55.9 million from $67.6 million at December 31, 1997. For the
first nine months of 1998, the Company's primary sources of cash were $41.9
million from operating activities and $10.9 million from restricted funds, while
its primary uses were for: capital expenditures of $24.4 million, purchase of
treasury stock of $22.2 million, acquisitions of $10.6 million and investment in
unconsolidated affiliates of $7.1 million. Cash flow provided by operating
activities increased approximately $3.7 million when compared with the first
nine months of 1997. The increase resulted mainly from the decline in the
Company's trade receivables resulting from improved collections. Working capital
decreased approximately $10.2 million for the first nine months of 1998 to
$124.9 million. The decrease resulted primarily from the Company's purchase of
treasury stock.
Capital expenditures increased approximately $12.4 million from $12.0
million for the first nine months of 1997 to $24.4 million for the first nine
months of 1998. Approximately $10.9 million of the capital expenditures relates
to the construction of a freight terminal at New York's John F. Kennedy
International Airport, with the remaining balance primarily for improvement and
expansion of facilities and management information services. Capital
expenditures for 1998 are estimated to be approximately $33.0 million.
At September 30, 1998, the Company had available for future borrowings
approximately $71.8 million of its $75.0 million revolving credit facility. The
Company utilized approximately $3.2 million under this facility for letters of
credit issued in connection with its insurance programs. Additionally, various
of the Company's foreign subsidiaries maintained overdraft facilities with
foreign banks, aggregating approximately $22.3 million, of which approximately
$1.7 million was outstanding.
During the third quarter of 1998, the Company's Board of Directors
authorized the purchase from time to time in the open market of up to one
million shares of the Company's common stock. This authorization, combined with
a similar one granted in November 1997, allows the Company to purchase up to two
million shares of its common stock in the open market. As of September 30, 1998,
the Company has purchased 1,077,500 of its common shares at a cost of
approximately $22.0 million.
During the first nine months of 1998, the Company made three acquisitions
for approximately $18.8 million comprised of $12.8 million of cash and $6.0
million of debt. See Note F.
In June 1998, the Company's Board of Directors authorized an increase in
the quarterly cash dividend from five cents ($.05) to six cents ($.06) per
share.
<PAGE>
Page 11
Management believes that the Company's available cash and sources of
credit, together with expected future sources of credit and cash generated from
operations, will be sufficient to satisfy its anticipated needs for working
capital, capital expenditures and dividends.
Year 2000
In 1997, the Company undertook an assessment to determine the impact of
Year 2000 compliance on its computer systems. This assessment resulted in
preliminary plans to prepare the Company for Year 2000 readiness. These plans
include remediation, upgrading or replacement of the Company's various systems
including those utilizing embedded technology. In accordance with Issue 96-14 of
the Emerging Issues Task Force of the Financial Accounting Standards Board,
which requires the costs associated with modifying computer software for the
Year 2000 to be expensed as incurred, the Company will expense the costs
incurred to remediate the applicable systems. These costs are estimated to be in
the range of $5.0 to $7.0 million over 1998 and 1999. The estimated costs will
be refined as the remediation and testing of the Company's systems progresses.
For the first nine months of 1998, the Company incurred approximately $2.4
million of expense. Additionally, the Company incurred approximately $1.0
million of expense in 1997. The Company believes that the remediation, upgrade
and replacement of its systems will be ready for Year 2000 prior to any impact
on its operations. If, however, the remediation, upgrade or replacement of the
Company's systems is not completed timely, and negatively impacts the Company's
Year 2000 readiness, the Company's operations may be materially adversely
affected.
Additionally, in connection with this effort, the Company has initiated a
program to communicate with its many customers and suppliers to determine the
level of Year 2000 readiness of these entities and the potential impact on the
Company's operations if these entities' computer systems are not ready. This
program encompasses contacting the Company's major customers and its major
suppliers - airlines, steamship lines, trucking companies, handling agents,
customs authorities and other governmental agencies and financial institutions.
During the third quarter and early fourth quarter of 1998, questionnaires have
been sent to the airlines, steamship lines and customs authorities. Responses
will be received and evaluated by the Company during the fourth quarter.
Additional communications will be made with suppliers deemed to be "at risk" for
non-compliance by the Company and contingency plans developed wherever
necessary. Communications with significant customers will be initiated during
the first quarter of 1999.
Contingency plans will include: redeployment of existing personnel and
employing additional personnel to processes that were automated and will require
manual intervention due to Year 2000 non-compliance, selection of alternative
air carriers, steamship lines, trucking companies etc., customer notification of
possible service disruptions in markets where carriers, aviation and/or customs
authorities may not be Year 2000 compliant.
The Company's Year 2000 compliance evaluation of customers and suppliers is
ongoing and the potential impact of non-compliance by the Company's customers
and suppliers has not been determined. However, the Company does not warrant as
true and accurate the assurance it receives from customers and suppliers
<PAGE>
Page 12
regarding the compliance of its systems. In the event that customers and
suppliers systems are non-compliant, disruptions in the Company's business may
occur which may have a material adverse effect on the Company's operations.
New Accounting Standard
In June 1998, the Financial Accounting Standards Board issued Statement No.
133, "Accounting for Derivative Instruments and Hedging Activities," which is
required to be adopted in years beginning after June 15, 1999. The Statement
establishes accounting and financial reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. The Company does not anticipate that the
adoption of this Statement will have a material impact on either its results of
operations or financial position.
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
The Company is involved in various legal proceedings generally incidental to its
business. While the result of any litigation contains an element of uncertainty,
the Company presently believes that the outcome of any known pending or
threatened legal proceeding or claim, or all of them combined, will not have a
material adverse effect on its results of operations or consolidated financial
position.
Item 6. - Exhibits and Reports on Form 8-K
a) Exhibits:
Exhibit 11 - Computation of Earnings Per Common Share.
Exhibit 27 - Financial Data Schedule.
b) Reports on Form 8-K:
None.
<PAGE>
Page 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Air Express International Corporation
(Registrant)
Date: November 13, 1998 /s/ Dennis M. Dolan
Dennis M. Dolan
Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: November 13, 1998 /s/ Martin J. McDonnell
Martin J. McDonnell
Vice President - Controller
(Principal Accounting Officer)
<PAGE>
<TABLE>
<CAPTION>
Exhibit 11
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(Unaudited)
(In thousands, except
per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net income applicable to
common shares .................... $13,010 $13,363 $36,401 $34,944
Earnings per share:
Basic ........................... $ .38 $ .39 $ 1.05 $ 1.02
Diluted ......................... $ .38 $ .38 $ 1.04 $ 1.00
Common share and common
share equivalents:
Weighted average of common
shares outstanding ............. 34,314 34,428 34,530 34,302
Basic shares .................... 34,314 34,428 34,530 34,302
Common share equivalents
(stock options) .................. 319 1,018 476 732
Diluted equivalent shares ....... 34,633 35,446 35,006 35,034
<FN>
Basic earnings per share is computed by dividing net income by the weighted
average common shares outstanding during the period. Diluted earnings per
share is computed by dividing net income by the weighted average of both the
common shares and common share equivalents (stock options) outstanding during
the period.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C> <C> <C>
<PERIOD-TYPE> 9-MOS RESTATED RESTATED
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997 DEC-31-1996
<PERIOD-END> SEP-30-1998 SEP-30-1997 SEP-30-1996
<CASH> 55,870 64,346 41,461
<SECURITIES> 0 0 0
<RECEIVABLES> 371,859 376,657 308,638
<ALLOWANCES> 4,353 4,302 4,580
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 430,403 444,161 350,952
<PP&E> 140,083 115,156 109,845
<DEPRECIATION> 66,392 55,703 49,253
<TOTAL-ASSETS> 652,763 643,569 519,553
<CURRENT-LIABILITIES> 305,456 319,888 259,552
<BONDS> 35,910 32,914 8,790
<COMMON> 350 346 341
0 0 0
0 0 0
<OTHER-SE> 358,408 310,094 263,264
<TOTAL-LIABILITY-AND-EQUITY> 652,763 643,569 519,553
<SALES> 0 0 0
<TOTAL-REVENUES> 1,123,831 1,133,151 956,375
<CGS> 0 0 0
<TOTAL-COSTS> 759,050 773,450 645,385
<OTHER-EXPENSES> 200,959 196,521 169,458
<LOSS-PROVISION> 1,011 805 912
<INTEREST-EXPENSE> 1,046 1,089 3,367
<INCOME-PRETAX> 57,828 55,820 42,851
<INCOME-TAX> 21,427 20,876 16,369
<INCOME-CONTINUING> 36,401 34,944 26,482
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 36,401 34,944 26,482
<EPS-PRIMARY> 1.05 1.02 .87
<EPS-DILUTED> 1.04 1.00 .81
</TABLE>
