<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------ ------------
Commission File Number: 0-13468
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
(Exact name of registrant as specified in its charter)
Washington 91-1069248
(State of other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
999 Third Avenue, Suite 2500, Seattle, Washington 98104
(Address of principal executive offices) (Zip Code)
(206) 674-3400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 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
----- -----
At August 8, 1997, the number of shares outstanding of the issuer's
Common Stock was 24,370,709.
Page 1 of 15 pages.
The Exhibit Index appears on page 15.
1
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1997 1996
----------- ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 44,586 $ 36,966
Short term investments 2,437 357
Accounts receivable, net 182,875 168,763
Deferred Federal and state taxes 5,141 4,854
Other current assets 6,648 4,503
----------- -----------
Total current assets 241,687 215,443
Property and equipment, net 57,510 46,246
Other assets, net 15,297 10,297
----------- -----------
$ 314,494 $ 271,986
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short term borrowings $ 15,843 $ 3,452
Accounts payable 117,463 101,670
Income taxes 6,592 5,659
Other current liabilities 21,219 21,194
----------- -----------
Total current liabilities 161,117 131,975
Shareholders' equity:
Preferred stock, par value $.01 per share.
Authorized 2,000,000 shares; none issued -- --
Common stock, par value $.01 per share.
Authorized 80,000,000 shares; issued and
outstanding 24,346,007 shares at June 30,
1997, and 24,212,946 at December 31, 1996 243 242
Additional paid-in capital 14,814 13,179
Retained earnings 135,813 123,258
Equity adjustments from foreign currency
translation 2,507 3,332
----------- -----------
Total shareholders' equity 153,377 140,011
----------- -----------
$ 314,494 $ 271,986
----------- -----------
----------- -----------
</TABLE>
2
<PAGE>
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Airfreight $ 156,974 $ 115,315 291,902 208,581
Ocean freight 42,068 35,270 81,878 64,654
Customs brokerage and import
services 26,533 15,621 47,764 30,641
---------- ---------- ---------- ----------
Total revenues 225,575 166,206 421,544 303,876
---------- ---------- ---------- ----------
Operating expenses:
Airfreight consolidation 127,446 92,667 236,750 167,121
Ocean freight consolidation 29,960 26,409 58,907 48,893
Salaries and related costs 36,939 25,566 69,269 48,641
Selling and promotion 3,228 2,306 6,108 4,520
Depreciation and amortization 2,662 1,942 5,044 3,829
Rent 2,584 2,111 4,995 3,894
Other 9,940 6,824 19,074 13,047
---------- ---------- ---------- ----------
Total operating expenses 212,759 157,825 400,147 289,945
Operating income 12,816 8,381 21,397 13,931
Other income, net 568 549 1,029 1,152
---------- ---------- ---------- ----------
Earnings before income taxes 13,384 8,930 22,426 15,083
Income tax expense 5,210 3,559 8,654 5,923
---------- ---------- ---------- ----------
Net earnings $ 8,174 $ 5,371 13,772 9,160
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net earnings per share $ .31 $ .21 $ .53 $ .36
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average number of common
shares 26,179,131 25,500,720 26,087,778 25,465,980
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
3
<PAGE>
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Operating Activities:
Net earnings $ 8,174 $ 5,371 13,772 9,160
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Provision for losses on accounts
receivable 193 491 966 859
Deferred income tax benefit (773) (92) (662) (553)
Depreciation and amortization 2,662 1,942 5,044 3,829
Other 227 92 378 195
Changes in operating assets and
liabilities:
Increase in accounts receivable (14,671) (19,861) (12,006) (20,118)
Increase in other current assets (1,711) (1,344) (1,950) (2,122)
Increase in accounts payable and
other current liabilities 7,591 14,791 14,558 17,790
-------- -------- -------- --------
Net cash provided by operating
activities 1,692 1,390 20,100 9,040
-------- -------- -------- --------
Investing Activities:
Increase in short-term investments (2,077) (1,861) (2,072) (1,601)
Purchase of property and equipment (1,299) (16,285) (12,855) (17,907)
Acquisitions, net of cash acquired (7,076) -- (7,076) --
Other (253) (2,864) 292 (2,734)
-------- -------- -------- --------
Net cash used in investing activities (10,705) (21,010) (21,711) (22,242)
-------- -------- -------- --------
Financing Activities:
Short-term borrowings, net 11,206 13,522 10,657 13,468
Proceeds from issuance of common
stock 376 502 883 945
Repurchases of common stock (147) (345) (153) (851)
Dividends paid (1,217) (964) (1,217) (964)
-------- -------- -------- --------
Net cash provided by financing
activities 10,218 12,715 10,170 12,598
Effect of exchange rate changes on cash (296) (132) (939) (47)
-------- -------- -------- --------
Increase (decrease) in cash and cash
equivalents 909 (7,037) 7,620 (651)
Cash and cash equivalents at beginning
of period 43,677 42,528 36,966 36,142
-------- -------- -------- --------
Cash and cash equivalents at end of
period $ 44,586 $ 35,491 44,586 35,491
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
4
<PAGE>
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies
The attached condensed consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. As a result, certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted. The
Company believes that the disclosures made are adequate to make the
information presented not misleading. The condensed consolidated financial
statements reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim periods
presented. Certain 1996 amounts have been reclassified to conform to the
1997 presentation. These condensed consolidated financial statements should
be read in conjunction with the financial statements and related notes
included in the Company's Form 10-K as filed with the Securities and Exchange
Commission on or about March 31, 1997.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings Per Share
(Statement 128). The statement establishes standards for the computation,
presentation, and disclosure of earnings per share (EPS), replacing the
presentation of currently required Primary EPS with a presentation of Basic
EPS. It also requires dual presentation of Basic EPS and Diluted EPS on the
face of the income statement for entities with complex capital structures.
Basic EPS, unlike Primary EPS, exludes all dilution while Diluted EPS, like
the current Fully Diluted EPS, reflects the potential dilution that could
occur from the exercise or conversion of securities into common stock or from
other contracts to issue common stock. Statement 128 is effective for
financial statements for periods ending after December 15, 1997 and earlier
application is not permitted. The Company does not expect the impact of the
adoption of this statement to be material to previously reported EPS amounts.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
Expeditors International of Washington, Inc. is engaged in the
business of global logistics management, including international freight
forwarding and consolidation, for both air and ocean freight. The Company
also acts as a customs broker in all the domestic offices, and in many of its
overseas offices. The Company also provides additional services for its
customers including value added distribution, purchase order management,
vendor consolidation and other logistics solutions. The Company offers
domestic forwarding services only in conjunction with international
shipments. The Company does not compete for overnight courier or small
parcel business. The Company does not own or operate aircraft or steamships.
International trade is influenced by many factors, including
economic and political conditions in the United States and abroad, currency
exchange rates, and United States and foreign laws and policies relating to
tariffs, trade restrictions, foreign investments and taxation. Periodically,
governments consider a variety of changes to current tariffs and trade
restrictions. The Company cannot predict which, if any, of these proposals
may be adopted. Nor can the Company predict the effects adoption of any such
proposal will have on the Company's business. Doing business in foreign
locations also subjects the Company to a variety of risks and considerations
not normally encountered by domestic enterprises. In addition to being
affected by governmental policies concerning international trade, the
Company's business may also be affected by political developments and changes
in government personnel or policies in the nations in which it does business.
The Company's ability to provide services to its customers is highly
dependant on good working relationships with a variety of entities including
airlines, ocean steamship lines, and governmental agencies. The Company
considers its current working relationships with these entities to be
satisfactory. However, changes in space allotments available from carriers,
governmental deregulation efforts, "modernization" of the regulations
governing customs brokerage, and/or changes in governmental quota
restrictions could affect the Company's business in unpredictable ways.
Historically, the Company's operating results have been subject to a
seasonal trend when measured on a quarterly basis. The first quarter has
traditionally been the weakest and the third quarter has traditionally been
the strongest. This pattern is the result of, or is influenced by, numerous
factors including climate, national holidays, consumer demand, economic
conditions and a myriad of other similar and subtle forces. In addition,
this historical quarterly trend has been influenced by the growth and
diversification of the Company's international network and service offerings.
The Company cannot accurately forecast many of these factors nor can the
Company estimate accurately the relative influence of any particular factor
and, as a result, there can be no assurance that historical patterns, if any,
will continue in future periods.
6
<PAGE>
A significant portion of the Company's revenues are derived from
customers in industries whose shipping patterns are tied closely to consumer
demand, and from customers in industries whose shipping patterns are
dependent upon just-in-time production schedules. Therefore, the timing of
the Company's revenues are, to a large degree, impacted by factors out of the
Company's control, such as a sudden change in consumer demand for retail
goods and/or manufacturing production delays. Additionally, many customers
ship a significant portion of their goods at or near the end of a quarter,
and therefore, the Company may not learn of a shortfall in revenues until
late in a quarter. To the extent that a shortfall in revenues or earnings
was not expected by securities analysts, any such shortfall from levels
predicted by securities analysts could have an immediate and adverse effect
on the trading price of the Company's stock.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS UNDER SECURITIES LITIGATION
REFORM ACT OF 1995; CERTAIN CAUTIONARY STATEMENTS
Certain portions of this report of Form 10-Q contain forward-looking
statements which must be considered in connection with the discussion of the
important factors that could cause actual results to differ materially from
the forward-looking statements. In addition to risk factors identified
elsewhere in this report, attention should be given to the factors identified
and discussed in the report on Form 10-K filed on or about March 31, 1997.
7
<PAGE>
RESULTS OF OPERATIONS
The following table shows the consolidated net revenues (revenues
less consolidation expenses) attributable to the Company's principal services
and the Company's expenses for the three and six-month periods ended June 30,
1997 and 1996, expressed as percentages of net revenues. With respect to the
Company's services other than consolidation, net revenues are identical to
revenues. Management believes that net revenues are a better measure than
total revenues of the relative importance of the Company's principal services
since total revenues earned by the Company as a freight consolidator include
the carriers' charges to the Company for carrying the shipment whereas
revenues earned by the Company in its other capacities include only the
commissions and fees actually earned by the Company.
The table and the accompanying discussion and analysis should be
read in conjunction with the condensed consolidated financial statements and
related notes thereto which appear elsewhere in this Quarterly Report.
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
1997 1996 1997 1996
---- ---- ---- ----
Percent Percent Percent Percent
of Net of Net of Net of Net
Amount Revenues Amount Revenues Amount Revenues Amount Revenues
------- -------- ------- -------- -------- -------- ------- --------
(Amounts in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Revenues:
Airfreight 29,528 43 $22,648 48 55,152 44 41,460 47
Ocean freight 12,108 18 8,861 19 22,971 18 15,761 18
Customs brokerage and import
services 26,533 39 15,621 33 47,764 38 30,641 35
------- -------- ------- -------- -------- -------- ------- --------
Net revenues 68,169 100 47,130 100 125,887 100 87,862 100
------- -------- ------- -------- -------- -------- ------- --------
Operating expenses:
Salaries and related costs 36,939 54 25,566 54 69,269 55 48,641 55
Other 18,414 27 13,183 28 35,221 28 25,290 29
------- -------- ------- -------- -------- -------- ------- --------
Total operating expenses 55,353 81 38,749 82 104,490 83 73,931 84
------- -------- ------- -------- -------- -------- ------- --------
Operating income 12,816 19 8,381 18 21,397 17 13,931 16
Other income, net 568 1 549 1 1,029 1 1,152 1
------- -------- ------- -------- -------- -------- ------- --------
Earnings before income taxes 13,384 20 8,930 19 22,426 18 15,083 17
Income tax expense 5,210 8 3,559 8 8,654 7 5,923 7
------- -------- ------- -------- -------- -------- ------- --------
Net earnings $ 8,174 12% $ 5,371 11% 13,772 11% $ 9,160 10%
------- -------- ------- -------- -------- -------- ------- --------
------- -------- ------- -------- -------- -------- ------- --------
</TABLE>
8
<PAGE>
Airfreight net revenues increased 30% and 33% for the three and
six-month periods ended June 30, 1997 as compared with the same periods for
1996. This increase was primarily due to increased airfreight tonnage
handled by the Company's expanding global network.
Ocean freight net revenues increased 37% and 46% for the three and
six-month periods ended June 30, 1997 as compared with the same periods for
1996. The Company continued to aggressively market competitive ocean freight
rates primarily on freight moving eastbound from the Far East. During the
second quarter of 1997, pricing pressures continued on this lane, however,
the Company believes that pricing had stabilized late in the second quarter.
Despite the falling prices, the Company was able to maintain margins and
expand market share, a development management believes to be significant in
assessing its strength in the transpacific market. The ocean forwarding
business and ECMS (Expeditors Cargo Management Systems), the Company's ocean
freight consolidation management and purchase order tracking service, were
again instrumental in helping the Company to expand its market share.
Customs brokerage and import services increased 70% and 56% for the
three and six-month periods ended June 30, 1997 as compared with the same
periods for 1996. This increase is the result of 1) the Company's entry into
the truck and rail border brokerage business in the United States, 2) the
Company's growing reputation for providing high quality service,
3) consolidation within the customs brokerage market as customers seek out
brokers with sophisticated computerized capabilities critical to an overall
logistics management program, and 4) the growing importance of distribution
services as a separate and distinct service which is included in this
category.
Salaries and related costs increased during the three and six-month
periods ended June 30, 1997 compared with the same period in 1996 as a result
of (1) the Company's increased hiring of sales, operations, and
administrative personnel in existing and new offices to accommodate increases
in business activity, and (2) increased compensation levels. Salaries and
related costs have, however, remained virtually constant as a percentage of
net revenue--a measure that management believes is significant in assessing
the effectiveness of corporate cost containment objectives. The relatively
consistent relationship between salaries and net revenues is the result of a
compensation philosophy that has been maintained since the inception of the
Company: offer a modest base salary and the opportunity to share in a fixed
and determinable percentage of the operating profit of the business unit
controlled by each key employee. Using this compensation model, changes in
individual compensation will occur in proportion to changes in Company
profits. Management believes that the organic growth in revenues, net revenue
and net income for the three and six-month periods ended June 30, 1997 and
1996 are a direct result of the incentives inherent in the Company's
compensation program.
Other operating expenses increased for the three and six-month
periods ended June 30, 1997 as compared with the same period in 1996 as rent
expense, communications expense, quality and training expenses, and other
costs expanded to accommodate the Company's growing operations. Other
operating expenses as a percentage of net revenues decreased approximately 1%
in the three and six-month periods ended June 30, 1997 as compared with the
same period in 1996. This decrease is primarily due to economies of scale
realized as the Company's semi-variable other operating expenses were spread
over increased net revenues.
9
<PAGE>
Other income, net, increased marginally for the three month period
ended June 30, 1997 compared with the same period of 1996, due to higher
interest income. Other income, net, decreased for the six month period ended
June 30, 1997 as compared with the same period in 1996, principally due to
lower interest income on smaller average cash balances during the first
quarter of 1997.
The Company pays income taxes in the United States and other
jurisdictions. In addition, the Company pays various other taxes, which are
typically included in costs of operations. Effective income tax rates per
financial statements during the three and six-month periods ended June 30,
1997 remained virtually constant as compared with the same period in 1996.
Currency and Other Risk Factors
International air/ocean freight forwarding and customs brokerage are
intensively competitive and are expected to remain so for the foreseeable
future. There are a large number of entities competing in the international
logistics industry, however, the Company's primary competition is confined to
a relatively small number of companies within this group. While there is
currently a marked trend within the industry toward consolidation into large
firms with multinational offices and agency networks, regional and local
broker/forwarders remain a competitive force.
Historically, the primary competitive factors in the international
logistics industry have been price and quality of service, including
reliability, responsiveness, expertise, convenience, and scope of operations.
The Company emphasizes quality service and believes that its prices are
competitive with those of others in the industry. Recently, customers have
exhibited a trend toward the more sophisticated and efficient procedures for
the management of the logistics supply chain by embracing strategies such as
just-in-time inventory management. Accordingly, sophisticated computerized
customer service capabilities and a stable worldwide network have become
significant factors in attracting and retaining customers.
Developing these systems and a worldwide network has added a
considerable indirect cost to the services provided to customers. Smaller
and middle-tier competitors, in general, do not have the resources available
to develop customized systems and worldwide network. As a result, there is a
significant amount of consolidation currently taking place in the industry.
Management expects that this trend toward consolidation will continue for the
short to medium-term.
The nature of the Company's worldwide operations necessitates the
Company dealing with a multitude of currencies other than the U.S. dollar. This
results in the Company being exposed to the inherent risks of the international
currency markets and governmental interference. Many of the countries where the
Company maintains offices and/or agency relationships have strict currency
control regulations which influence the Company's ability to hedge foreign
currency exposure. The Company tries to compensate for these exposures by
accelerating international currency settlements among these offices or agents.
Foreign currency gains and losses recognized during the second quarter and for
the first six months of 1997 and 1996 were immaterial.
10
<PAGE>
The Company has traditionally generated revenues from airfreight,
ocean freight and customs brokerage and import services. In light of the
customer-driven trend to provide customer rates on a door-to-door basis,
management foresees the potential, in the medium to long-term, for fees
normally associated with customs house brokerage to be de-emphasized and
included as a component of other services offered by the Company.
Sources of Growth
Acquisitions - Historically, growth through aggressive acquisition
has proven to be a challenge for many of the Company's competitors and
typically involves the purchase of significant "goodwill", the value of which
can be realized in large measure only by retaining the customers and profit
margins of the acquired business. As a result, the Company has pursued a
strategy emphasizing organic growth supplemented by certain strategic
acquisitions, where future economic benefit significantly exceeds the
"goodwill" recorded in the transaction.
During the second quarter, the Company completed the acquisition of
SeaSky Express, Ltd. This entity had served as the Company's exclusive
agent in Ireland. The Company paid approximately $8.5 million dollars for
all of the outstanding shares of Seasky Express, Ltd. and its wholly-owned
subsidiaries. In connection with this transaction, the Company recorded
approximately $5.4 million in "Goodwill" which the Company will amortize over
40 years. The strategic motivations for this acquisition included 1)
obtaining expertise in European road freight, 2) establishing a clear
identity and presence in this key market, and 3) a reluctance to risk the
loss of customers inherent in starting a new venture which would compete with
an established and motivated "former agent."
Office Openings - The Company opened five start-up offices during
the second quarter of 1997.
<TABLE>
<CAPTION>
North Indian
America Far East Europe Africa Sub-continent
- ------- -------- ------ ------ -------------
<S> <C> <C> <C> <C>
-- -- Dublin, Ireland -- Madras, India
Cork, Ireland Bangalore, India
Shannon, Ireland
</TABLE>
Internal Growth - Management believes that a comparison of "same
store" growth is critical in the evaluation of the quality and extent of the
Company's internally generated growth. This "same store" analysis isolates
the financial contributions from offices that have been included in the
Company's operating results for at least one full year. The table below
presents same store comparisons for the second quarter of 1997 (which is the
measure of any increase from the same quarter of 1996) and for the second
quarter of 1996 (which measures growth over 1995).
<TABLE>
<CAPTION>
For the three months
ended June 30,
1997 1996
---- ----
<S> <C> <C>
Net revenue 29% 21%
Operating income 44% 23%
</TABLE>
11
<PAGE>
Liquidity and Capital Resources
The Company's principal source of liquidity is cash generated from
operations. At June 30, 1997, working capital was $80.6 million, including
cash and short-term investments of $47.0 million. The Company had no
long-term debt at June 30, 1997. While the nature of its business does not
require an extensive investment in property and equipment, the Company is
actively looking for suitable facilities and/or property to acquire at or
near airports in certain cities in North America and overseas. The Company
expects to spend approximately $30.0 million on property and equipment in
1997, which is expected to be financed with cash, short-term floating rate
and/or long-term fixed-rate borrowings.
The Company maintains foreign and domestic borrowings under
unsecured bank lines of credit totaling $30.0 million. At June 30, 1997, the
Company was directly liable for $10.3 million drawn on these lines of credit
and was contingently liable for an additional $16.1 million from standby
letters of credit. In addition, the Company maintains a bank facility with
its U.K. bank for $8.3 million. Management believes that the Company's
current cash position, bank financing arrangements, and operating cash flows
will be sufficient to meet its capital and liquidity requirements for the
foreseeable future.
In some cases, the Company's ability to repatriate funds from
foreign operations may be subject to foreign exchange controls. In addition,
certain undistributed earnings of the Company's subsidiaries accumulated
through December 31, 1992 would, under most circumstances, be subject to some
additional United States income tax if distributed to the Company. The
Company has not provided for this additional tax because the Company intends
to reinvest such earnings to fund the expansion of its foreign activities, or
to distribute them in a manner in which no significant additional taxes would
be incurred.
12
<PAGE>
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is ordinarily involved in claims and lawsuits which
arise in the normal course of business, none of which currently, in
management's opinion, will have a significant effect on the Company's
financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of the Shareholders was held on May 7, 1997.
(b) The following directors were elected to the Board of Directors to serve a
term of one year and until their successors are elected and qualified:
<TABLE>
<CAPTION>
For Withheld
--- --------
<S> <C> <C>
P.J. Rose 22,524,463 26,976
K.M. Walsh 22,524,111 27,328
J.L.K. Wang 22,524,463 26,976
J.J. Casey 22,524,059 27,380
D.P. Kourkoumelis 22,524,229 27,210
J.W. Meisenbach 22,524,008 27,431
</TABLE>
<TABLE>
<CAPTION>
For Against Abstain Non-Vote
--- ------- ------- --------
<S> <C> <C> <C> <C>
(c) 1997 Stock Option Plan 13,921,078 6,451,766 70,464 2,108,131
(d) 1997 Executive Incentive
Compensation Plan 21,549,439 406,070 97,858 498,072
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-K.
Exhibit
Number Description
------- -----------
27 Financial Data Schedule, Edgar Filing Only
(b) Reports on Form 8-K
No reports on Form 8-K were filed in the quarter ended June 30, 1997.
13
<PAGE>
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.
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
August 8, 1997 /s/ PETER J. ROSE
------------------------------------------------
Peter J. Rose, Chairman
and Chief Executive Officer
(Principal Executive Officer)
August 8, 1997 /s/ R. JORDAN GATES
------------------------------------------------
R. Jordan Gates, Chief Financial Officer
and Treasurer
(Principal Financial and Accounting Officer)
14
<PAGE>
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Form 10-Q Index and Exhibits
June 30, 1997
Exhibit
Number Description
- ------- -----------
27 Financial Data Schedule (Filed Electronically Only)
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS SET FORTH AS ITEM 1 OF FORM 10-Q FOR THE
QUARTERLY PERIOD ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 44,586
<SECURITIES> 2,437
<RECEIVABLES> 182,875
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 241,687
<PP&E> 57,510
<DEPRECIATION> 0
<TOTAL-ASSETS> 314,494
<CURRENT-LIABILITIES> 161,117
<BONDS> 0
0
0
<COMMON> 243
<OTHER-SE> 153,134
<TOTAL-LIABILITY-AND-EQUITY> 314,494
<SALES> 0
<TOTAL-REVENUES> 421,544
<CGS> 0
<TOTAL-COSTS> 295,657
<OTHER-EXPENSES> 104,490
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 22,426
<INCOME-TAX> 8,654
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,772
<EPS-PRIMARY> .53
<EPS-DILUTED> .53
</TABLE>
