<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 March 31, 1999
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 May 10, 1999 was
33,403,494 (Net of 1,807,502 Treasury Shares).
<PAGE>
AIR EXPRESS INTERNATIONAL CORPORATION
March 1999 Form 10-Q Quarterly Report
Table of Contents
Part I - Financial Information
Page
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as at
March 31, 1999 and December 31, 1998................. 2
Condensed Consolidated Statements of Operations -
Three Months ended March 31, 1999 and 1998........... 3
Consolidated Statements of Cash Flows -
Three Months ended March 31, 1999 and 1998........... 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)
March 31,1999 Dec 31,1998
(Unaudited)
Assets
<S> <C> <C>
Current Assets:
Cash and cash equivalents .......................... $ 63,312 $ 60,246
Accounts receivable (less allowance for
doubtful accounts of $5,218 and $5,112) ........... 356,859 366,417
Marketable securities .............................. -- 7,188
Other current assets ............................... 4,961 7,096
Total current assets ......................... 425,132 440,947
Investment in unconsolidated affiliates ............... 31,145 29,507
Restricted funds ...................................... 1,188 2,126
Property, plant and equipment (less accumulated
depreciation of $70,914 and $70,515) ................. 82,713 81,178
Deposits and other assets ............................. 15,753 13,937
Goodwill (less accumulated amortization of
$15,694 and $15,331) ................................. 104,593 107,783
Total assets ................................. $ 660,524 $ 675,478
Liabilities and stockholders' investment
Current Liabilities:
Current portion of long-term debt .................. $ 4,044 $ 4,337
Bank overdrafts payable ............................ 2,561 4,432
Transportation payables ............................ 166,056 157,763
Accounts payable ................................... 62,353 66,023
Accrued liabilities ................................ 62,202 72,780
Income taxes payable ............................... 10,851 6,644
Total current liabilities .................... 308,067 311,979
Long-term debt ..................................... 41,672 42,578
Other liabilities .................................. 6,906 10,050
Total liabilities ............................ 356,645 364,607
Stockholders' Investment:
Capital stock-
Preferred (authorized 1,000,000 shares, none
outstanding) ..................................... -- --
Common, $.01 par value (authorized 100,000,000
shares, issued 35,195,996 and 35,028,154 shares) . 352 350
Additional paid-in capital ......................... 149,577 147,544
Accumulative other comprehensive income ............ (38,537) (28,192)
Retained earnings .................................. 228,384 216,763
339,776 336,465
Less: 1,807,502 and 1,217,586 shares of treasury
stock, at cost................................... (35,897) (25,594)
Total stockholders' investment ..................... 303,879 310,871
Total liabilities and stockholders' investment ..... $ 660,524 $ 675,478
The accompanying notes are an integral part of these financial statements.
</TABLE>
<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
March 31,
1999 1998
<S> <C> <C>
Revenues ......................................... $354,684 $372,376
Operating expenses:
Transportation .................................. 234,306 254,523
Terminal ........................................ 69,520 67,126
Selling, general and administrative ............. 38,954 37,571
Operating profit ................................. 11,904 13,156
Other income:
Interest, net ................................... 76 357
Other, net ...................................... 9,645 2,055
9,721 2,412
Income before provision for income taxes ......... 21,625 15,568
Provision for income taxes ....................... 8,001 5,838
Net income ....................................... $ 13,624 $ 9,730
Income per common share:
Basic ....................................... $ .40 $ .28
Diluted ..................................... $ .40 $ .28
Weighted average number
of common shares:
Basic ....................................... 33,690 34,639
Diluted ..................................... 33,892 35,381
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Page 4
<TABLE>
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Dollars in thousands)
1999 1998
Cash flows from operating activities:
<S> <C> <C>
Net Income .......................................... $ 13,624 $ 9,730
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense ............................ 4,118 3,436
Amortization of goodwill ........................ 766 622
Deferred income taxes ........................... (948) (1,493)
Equity in earnings of unconsolidated affiliates . (536) (1,069)
(Gains) on sales of assets, net .................. (50) (8)
(Gain) on sale of marketable securities .......... (7,852) --
Changes in assets and liabilities:
(Increase) decrease in accounts receivable, net .. (708) 2,117
Decrease in other current assets ................ 1,906 862
(Increase) in other assets ....................... (681) (619)
Increase (decrease) in transportation payables .. 11,764 (536)
(Decrease) increase in accounts payable .......... (533) 1,939
(Decrease) in accrued liabilities ................ (9,072) (2,429)
Increase (decrease) in income taxes payable ..... 4,932 (1,498)
Increase in other liabilities ................... 68 78
Total adjustments ............................. 3,174 1,402
Net cash provided by operating activities ....... 16,798 11,132
Cash flows from investing activities:
Restricted funds ................................... 938 3,808
Proceeds from sales of assets ...................... 84 283
Proceeds from sale of marketable securities ........ 7,877 --
Capital expenditures ............................... (6,903) (6,787)
Investment in unconsolidated affiliates ............ (1,676) (7,040)
Net cash provided (used) by investing activities 320 (9,736)
Cash flows from financing activities:
Net repayments in bank overdrafts payable .......... (1,679) (366)
Additions to long-term debt ........................ 992 --
Payment of long-term debt .......................... (787) (39)
Issuance of common stock ........................... 905 1,847
Payment of cash dividends .......................... (2,029) (1,728)
Purchase of treasury stock ......................... (9,692) (96)
Net cash used by financing activities ........... (12,290) (382)
Effect of foreign currency exchange rates on cash ...... (1,762) (223)
Net increase in cash and cash equivalents .............. 3,066 791
Cash and cash equivalents at beginning of period ....... 60,246 67,576
Cash and cash equivalents at end of period ............. $ 63,312 $ 68,367
</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 March 31, 1999, the consolidated
statements of operations for the three-month periods ended March 31, 1999
and 1998, and the consolidated statements of cash flows for the three-month
periods ended March 31, 1999 and 1998 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 March 31, 1998
financial statements were reclassified to conform to the classification of
March 31, 1999 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,
1998.
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 period ended
March 31, 1999 are not necessarily indicative of the results of operations
expected for the full year ending December 31, 1999.
B. Marketable securities:
During the first quarter of 1999, the Company sold 30% of its investment in
the equity securities of Equant, N.V., an international data network
service provider, for a pre-tax gain of approximately $7.9 million (See
Note D) and an after-tax gain of approximately $4.9 million or $.14 per
diluted share. The remaining shares are not currently marketable and are
carried at a cost of approximately $.1 million in the accompanying balance
sheet.
C. Interest, net was as follows:
<TABLE>
Three Months Ended
March 31,
1999 1998
<S> <C> <C>
Interest expense ................ $(610) $(323)
Interest income ................. 686 680
$ 76 $ 357
</TABLE>
<PAGE>
Page 6
D. Other, net was as follows:
<TABLE>
Three Months Ended
March 31,
1999 1998
<S> <C> <C>
Gain on the sale of marketable
securities ............................... $7,852 $ --
Equity in earnings of unconsolidated
affiliates .............................. 1,143 1,574
Foreign exchange gains .................... 600 473
Other ..................................... 50 8
$9,645 $2,055
</TABLE>
E. Comprehensive income:
<TABLE>
Three Months Ended
March 31,
1999 1998
<S> <C> <C>
Net income ................................. $ 13,624 $ 9,730
Other comprehensive income, net of tax:
Translation of foreign currency
financial statements (income tax
benefit of $387 and $138) ................ (6,218) (1,723)
Reclassification adjustment for gain
on sale of marketable securities
included in net income(income tax
expense of $3,061) ....................... (4,127) --
Comprehensive income ....................... $ 3,279 $ 8,007
</TABLE>
F. Supplemental disclosures of cash flow information:
<TABLE>
Three Months Ended
March 31,
1999 1998
<S> <C> <C>
Interest and income taxes paid:
Interest.................................... $ 329 $ 222
Income taxes................................ 4,410 4,465
$ 4,739 $ 4,687
</TABLE>
<PAGE>
Page 7
G. Regional Operations:
The Company operates its integrated logistics business as 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.
<TABLE>
Three Months Ended
March 31,
1999 1998
<S> <C> <C>
Revenues by service:
Airfreight ................................... $268,276 $291,530
Ocean freight ................................ 49,252 43,155
Customs brokerage & other .................... 37,156 37,691
Total revenues ............................... $354,684 $372,376
Revenues by geographic area:
U.S.A ........................................ $141,395 $159,481
United Kingdom .............................. 34,956 39,279
Other ....................................... 74,129 75,727
Europe ....................................... 109,085 115,006
Asia and Others .............................. 104,204 97,889
Total foreign .............................. 213,289 212,895
Total revenues ............................... $354,684 $372,376
Operating profit by
geographic area:
U.S.A ........................................ $ 4,819 $ 2,814
Europe ....................................... 1,656 5,660
Asia and Others .............................. 5,429 4,682
Total foreign .............................. 7,085 10,342
Total operating profit ....................... $ 11,904 $ 13,156
</TABLE>
<PAGE>
Page 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
The Company operates its integrated logistics business as 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 Ended
March 31,
1999 1998
<S> <C> <C>
Gross Revenues:
Airfreight ....................................... $ 268.3 $ 291.5
Ocean freight .................................... 49.3 43.2
Customs brokerage and other ...................... 37.1 37.7
Total Gross Revenues ........................... $ 354.7 $ 372.4
Net Revenues:
Airfreight ....................................... $ 76.0 $ 74.6
Ocean freight .................................... 15.4 12.5
Customs brokerage and other ...................... 29.0 30.8
Total Net Revenues ............................. 120.4 117.9
Internal Operating Expenses:
Terminal ......................................... 69.5 67.1
Selling, general and administrative .............. 39.0 37.6
Total Internal Operating Expenses .............. 108.5 104.7
Operating Profit ................................... $ 11.9 $ 13.2
</TABLE>
Consolidated gross revenues for the first quarter of 1999 decreased $17.7
million (4.8%) to $354.7 million compared with the first quarter of 1998.
Consolidated net revenues increased $2.5 million (2.1%) to $120.4 million
compared to the first quarter of 1998. The decrease in gross revenues was
comprised of a $23.2 million (8.0%) decline in airfreight revenues, a $.6
million (1.6%) decline in customs brokerage and other revenues, and a $6.1
million (14.1%) increase in ocean freight revenues. The increase in net revenues
was the result of increases in airfreight and ocean freight net revenues of $1.4
million (1.9%) and $2.9 million (23.2%), respectively, offset by a $1.8 million
(5.8%) decline in customs brokerage and other net revenues. The decrease in
airfreight gross revenues resulted from reduced shipping volumes and pricing
pressures in certain markets. The increase in airfreight net revenues resulted
from improvement in both the mix and routing of cargo and cost of
transportation. As a result, the airfreight gross margin (net revenues as a
percentage of gross revenues) increased 2.7% over the first quarter of 1998 to
28.3%. The increase in both gross and net ocean freight revenues was
attributable to increased shipping activity, particularly from the United States
and Far East, and lower ocean freight costs in certain markets. The decrease in
customs brokerage and other net revenues was primarily due to a decline in
warehouse and distribution activity and selling rates in several markets.
<PAGE>
Page 9
Internal operating expenses for the first quarter of 1999 increased $3.8
million (3.6%) over the first quarter of 1998. The increase was primarily the
result of expenses related to acquisitions made subsequent to the first quarter
of 1998, which contributed positively to the first quarter 1999 results,
combined with an increase in information systems expenses including Year 2000
remediation and testing.
Consolidated operating profit for the first quarter of 1999 decreased $1.3
million (9.8%) compared to the first quarter of 1998.
Interest, net decreased $.3 million in the first quarter of 1999 compared
to the first quarter of 1998. The decline resulted from higher interest expense
associated with the increase in long-term debt. Other, net increased $7.6
million in the first quarter of 1999 compared to the first quarter of 1998. The
increase resulted primarily from a $7.9 million gain on the sale of marketable
securities (See Note B).
The effective income tax rate for the first quarter of 1999 decreased to
37.0% compared to 37.5% for the first quarter of 1998. The decrease was largely
the result of a change in the geographic composition of worldwide earnings to
countries with lower effective income tax rates.
United States gross revenues decreased $18.1 million (11.3%) to $141.4
million for the first quarter of 1999 compared to the first quarter of 1998. The
decrease was comprised of a $18.6 million (14.6%) decline in airfreight
revenues, a $1.3 million (8.9%) increase in ocean freight revenues and a $.8
million (5.1%) decrease in customs brokerage and other revenues. The decrease in
airfreight revenues resulted from reduced domestic and export shipment activity.
The increase in ocean freight revenues was due to increase shipments to new and
existing customers. The decrease in customs brokerage and other revenues
resulted from declines in both brokerage and warehousing activity.
The United States gross margin in the first quarter of 1999 increased 5.7%
over the first quarter of 1998 to 39.1%. The increase was mainly the result of
improvement in the mix of cargo and lower transportation costs. The improved
margin, coupled with a marginal increase in internal operating expenses,
resulted in operating profit increasing $2.0 million over the first quarter of
1998 to $4.8 million.
Foreign gross revenues increased marginally in the first quarter of 1999 to
$213.3 million compared to the first quarter of 1998. European gross revenues
decreased $5.9 million (5.1%) to $109.1 million. The decrease was comprised of a
$7.2 million (7.9%) decline in airfreight revenues, a $1.2 million (9.2%)
increase in ocean freight revenues and a marginal increase in customs brokerage
and other revenues. The decrease in airfreight gross revenues was due to lower
shipment activity and selling rates in certain markets. The increase in ocean
freight gross revenues was attributable to greater shipping volumes from new and
existing customers. Asia and Others gross revenues increased $6.3 million (6.5%)
to $104.2 million. The increase was comprised of a $2.5 million (3.5%) increase
in airfreight revenues, a $3.5 million (24.5%) increase in ocean freight
revenues, and a $.3 million (2.9%) increase in customs brokerage and other
<PAGE>
Page 10
revenues. The increases in airfreight and ocean freight gross revenues were
attributable to greater shipping volumes from existing and new customers. The
increase in customs brokerage and other gross revenues resulted from
acquisitions made subsequent to the first quarter of 1998.
Foreign operating profit for the first quarter of 1999 decreased $3.3
million (31.5%) to $7.1 million compared with the first quarter of 1998. The
European region's operating profit decreased $4.0 million (70.7%) compared to
the first quarter of 1998. The decrease resulted primarily from weakness in both
the United Kingdom and The Netherlands which experienced declines in airfreight
shipments and selling rates. The Asia and Others region's operating profit
increased $.7 million (16.0%) over the first quarter of 1998.
Liquidity and Capital Resources
At March 31,1999, cash and cash equivalents increased approximately $3.1
million to $63.3 million from $60.2 million at December 31, 1998. For the first
quarter of 1999, the Company's primary sources of cash consisted of $16.8
million from operating activities and $7.9 million from the sale of marketable
securities, while the primary uses of cash consisted of $9.7 million for the
purchase of treasury stock and $6.9 million for capital expenditures. Cash flow
from operating activities increased approximately $5.7 million over the first
quarter of 1998. The increase was primarily from the increase in transportation
payables and income taxes payable. Working capital decreased approximately $11.9
million in the quarter to $117.1 million. The decrease resulted primarily from
the purchase of treasury stock.
Capital expenditures for the quarter increased marginally over the first
quarter of 1998 to $6.9 million. The $6.9 million of capital expenditures was
primarily for improvement and expansion of facilities and management information
services.
At March 31, 1999, 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 mainly 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 $23.3 million, of which
approximately $2.6 million was outstanding.
The Company's Board of Directors has authorized the purchase from time to
time in the open market of up to two million shares of the Company's common
stock. During the first quarter of 1999, the Company purchased 557,500 of its
common shares at a cost of approximately $9.7 million. As of March 31, 1999, the
Company has purchased 1,635,000 of the two million shares authorized at a cost
of approximately $31.7 million.
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.
<PAGE>
Page 11
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. For 1998, the Company incurred
approximately $3.6 million of expense and approximately $1.0 million of expense
in 1997. Year 2000 expense for 1999 is anticipated to be approximately $2.5
million with approximately $1.1 million expended in the first quarter of 1999.
The remediation of the Company's systems was approximately 99% completed by
the end of the first quarter of 1999. Systems testing is scheduled to be
completed by the end of June 1999. The systems testing will verify existing
functionality and system operation before, during and after January 1, 2000. The
testing will place particular emphasis on the high risk dates of December 31,
1999, January 1, 2000, February 29, 2000, March 1, 2000, and March 1, 2001. 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.
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 were sent to
the Company's significant suppliers. As of April 23, 1999, the Company surveyed
approximately 1,400 of its significant suppliers - approximately 77% of those
suppliers surveyed have advised the Company that they are currently Year 2000
compliant or expect compliance by September 30, 1999.
Those suppliers who advised the Company of compliance after April 23, 1999
or who have not responded to the Company, will receive additional communication
from the Company. Based upon responses, these suppliers will be evaluated for
their level of compliance. For those suppliers deemed "at risk" for
non-compliance, the Company will develop contingency plans wherever necessary.
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.
<PAGE>
Page 12
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 any assurance it receives from customers and suppliers
regarding the compliance of its systems. The Company relies entirely on its
transportation suppliers' airlines, steamship lines and independent trucking
firms to transport its customers' cargo throughout its network. To the degree
that the operations of any number of transportation providers are adversely
effected by Year 2000, 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: May 14, 1999 /s/ Dennis M. Dolan
Dennis M. Dolan
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: May 14, 1999 /s/ Martin J. McDonnell
Martin J. McDonnell
Vice President - Controller
(Principal Accounting Officer)
<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
March 31,
1999 1998
<S> <C> <C>
Net income applicable to common shares ............. $13,624 $ 9,730
Earnings per share:
Basic ............................................ $ .40 $ .28
Diluted .......................................... $ .40 $ .28
Common share and common
share equivalents:
Weighted average of common
shares outstanding .............................. 33,690 34,639
Basic shares ..................................... 33,690 34,639
Common share equivalents (stock options) ......... 202 742
Diluted equivalent shares ........................ 33,892 35,381
<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 common
shares and common share equivalents outstanding during the period.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 63,312
<SECURITIES> 0
<RECEIVABLES> 362,077
<ALLOWANCES> 5,218
<INVENTORY> 0
<CURRENT-ASSETS> 425,132
<PP&E> 153,627
<DEPRECIATION> 70,914
<TOTAL-ASSETS> 660,524
<CURRENT-LIABILITIES> 308,067
<BONDS> 41,672
<COMMON> 352
0
0
<OTHER-SE> 377,961
<TOTAL-LIABILITY-AND-EQUITY> 660,524
<SALES> 0
<TOTAL-REVENUES> 354,684
<CGS> 0
<TOTAL-COSTS> 234,306
<OTHER-EXPENSES> 69,520
<LOSS-PROVISION> 306
<INTEREST-EXPENSE> 610
<INCOME-PRETAX> 21,625
<INCOME-TAX> 8,001
<INCOME-CONTINUING> 13,624
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,624
<EPS-PRIMARY> .40
<EPS-DILUTED> .40
</TABLE>
