<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 March 31, 1998
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
incorporation or organization) (IRS Employer Identification Number)
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 April 30, 1998, the number of shares outstanding of the issuer's Common
Stock was 24,583,004.
Page 1 of 14 pages.
The Exhibit Index appears on page 14.
<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>
March 31, December 31,
ASSETS 1998 1997
--------- ------------
<S> <C> <C>
(Unaudited)
Current assets:
Cash and cash equivalents $ 55,937 $ 42,094
Short-term investments 341 214
Accounts receivable, less
allowance for doubtful accounts
of $6,787 at March 31, 1998 and
$6,449 at December 31, 1997 177,861 206,501
Deferred Federal and state taxes 4,804 4,296
Other current assets 5,553 6,399
--------- ------------
Total current assets 244,496 259,504
Property and equipment, less
accumulated depreciation and
amortization of $39,615 at March 31,
1998 and $36,475 at December 31, 1997 77,150 66,550
Deferred Federal and state taxes 2,259 1,930
Other assets, net 16,139 16,122
--------- ------------
$ 340,044 $ 344,106
--------- ------------
--------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short term borrowings $ 1,091 $ 2,145
Accounts payable 127,814 143,980
Income taxes 9,280 7,181
Other current liabilities 22,068 18,946
--------- ------------
Total current liabilities 160,253 172,252
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 24,575,944 shares at
March 31, 1998, and 24,546,380 at
December 31, 1997 246 245
Additional paid-in capital 15,973 15,534
Retained earnings 167,259 159,225
Accumulated other comprehensive income (3,687) (3,150)
--------- ------------
Total shareholders' equity 179,791 171,854
--------- ------------
$ 340,044 $ 344,106
--------- ------------
--------- ------------
</TABLE>
See accompanying notes to consolidated financial statements.
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
March 31,
------------------------
1998 1997
---- ----
<S> <C> <C>
Revenues:
Airfreight $147,147 $134,928
Ocean freight 45,329 39,810
Customs brokerage and import services 30,873 21,231
---------- ----------
Total revenues 223,349 195,969
---------- ----------
Operating expenses:
Airfreight consolidation 115,642 109,304
Ocean freight consolidation 31,943 28,947
Salaries and related costs 42,456 32,730
Selling and promotion 3,418 2,880
Rent 3,479 2,411
Depreciation and amortization 3,264 2,382
Other 10,448 8,734
---------- ----------
Total operating expenses 210,650 187,388
---------- ----------
Operating income 12,699 8,581
Other income, net 325 461
---------- ----------
Earnings before income taxes 13,024 9,042
Income tax expense 4,990 3,444
---------- ----------
Net earnings $ 8,034 $ 5,598
---------- ----------
---------- ----------
Basic Earnings per share $.33 $.23
---------- ----------
---------- ----------
Diluted Earnings per share $.30 $.22
---------- ----------
---------- ----------
Weighted average Basic
common shares outstanding 24,561,119 24,253,193
---------- ----------
---------- ----------
Weighted average Diluted
common shares outstanding 26,557,418 25,996,372
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
------------------------
1998 1997
---- ----
<S> <C> <C>
Operating Activities:
Net earnings $ 8,034 $ 5,598
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Provision for losses on accounts receivable 515 773
Deferred income tax (benefit) expense (70) 111
Depreciation and amortization 3,264 2,382
Other 210 151
Changes in operating assets and liabilities:
Decrease in accounts receivable 27,400 2,665
Decrease (Increase) in other current assets 800 (239)
(Decrease) Increase in accounts payable
and other current liabilities (10,834) 6,967
---------- ----------
Net cash provided by operating activities 29,319 18,408
---------- ----------
Investing Activities:
(Increase) Decrease in short-term investments (88) 5
Purchase of property and equipment (14,208) (11,556)
Other 192 545
---------- ----------
Net cash used in investing activities (14,104) (11,006)
---------- ----------
Financing Activities:
Short-term borrowings, net (1,005) (549)
Proceeds from issuance of common stock 271 507
Repurchases of common stock (271) (6)
---------- ----------
Net cash used in financing activities (1,005) (48)
Effect of exchange rate changes on cash (367) (643)
---------- ----------
Increase in cash and cash equivalents 13,843 6,711
Cash and cash equivalents at beginning
of period 42,094 36,966
---------- ----------
Cash and cash equivalents at end of period $ 55,937 $ 43,677
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to consolidated financial statements.
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 1997 amounts have been reclassified
to conform to the 1998 presentation. These condensed consolidated financial
statements should be read in conjunction with the financial statements and
related notes included in the Company's 10-K as filed with the Securities and
Exchange Commission on or about March 31, 1998.
Deferred income taxes of $1,930, related to equity adjustments from
foreign currency translation at December 31, 1997, have been reclassified
from previously reported amounts. Certain other 1997 amounts have been
reclassified to conform with the 1998 presentation.
Note 2. Comprehensive Income
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income", which
establishes standards for the reporting of comprehensive income and its
components in financial statements. Comprehensive income consists of net
income and other gains and losses affecting shareholders' equity that, under
generally accepted accounting principles, are excluded from net income. For
the Company, these consist of foreign currency translation gains and losses,
net of related income tax effects.
The components of total comprehensive income for interim periods are
presented in the following table:
<TABLE>
<CAPTION>
Three Months Ended March 31,
(Dollars in thousands) 1998 1997
------ ------
<S> <C> <C>
Net income $8,034 $5,598
Foreign currency translation
adjustments net of tax of
$329 and $336 (537) (548)
------ ------
Total comprehensive income $7,497 $5,050
------ ------
------ ------
</TABLE>
Note 3. Earnings per Share
The following table is a reconciliation of the numerators and denominators
used in computing earnings per share for the first quarter of 1998 and 1997:
<TABLE>
<CAPTION>
Weighted
(Amounts in Thousands, except Net Average Earnings
Share and Per Share amounts) Earnings Shares Per Share
-------- ---------- ---------
<S> <C> <C> <C>
1998
- ----
Basic Earnings per share $8,034 24,561,119 $.33
Effect of dilutive stock options 1,996,299
----------
Diluted earnings per share $8,034 26,557,418 $.30
-------- ---------- ---------
-------- ---------- ---------
1997
- ----
Basic Earnings per share $5,598 24,253,193 $.23
Effect of dilutive stock options 1,473,179
----------
Diluted earnings per share $5,598 26,557,418 $.22
-------- ---------- ---------
-------- ---------- ---------
</TABLE>
Note 4. Recent Accounting Pronouncements
In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position No. 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use," (SOP 98-1). The Company
will be required to adopt SOP 98-1 effective January 1, 1999. SOP 98-1
provides, among other things, guidance for determining whether computer
software is for internal use and when the cost related to such software
should be expensed as incurred or capitalized and amortized. Management is
currently evaluating the provisions of SOP 98-1 but does not expect that the
adoption of this pronouncement will significantly impact the Company's future
results of operations.
In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," was issued. SFAS No. 131 establishes standards for
the way that public companies report selected information about operating
segments in annual financial statements and requires that such companies
report selected information about segments in interim reports to
shareholders. SFAS No. 131 is effective for financial statements issued for
periods beginning after December 15, 1997. This statement is not required to
be applied to interim financial statements in the initial year of its
application. The Company has not yet determined the effects, if any, that
SFAS No. 131 will have on the disclosures in its consolidated financial
statements.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS UNDER SECURITIES LITIGATION
REFORM ACT OF 1995; CERTAIN CAUTIONARY STATEMENTS
Certain portions of this report on Form 10-Q including the section
entitled "Currency and Other Risk Factors" and "Liquidity and Capital
Resources" 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, 1998.
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 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.
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-month periods ended March 31, 1998 and
1997, 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.
7
<PAGE>
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 March 31,
1998 1997
------------------------------------------------------
Percent Percent
of net of net
Amount revenues Amount revenues
------- -------- -------- ---------
(Amounts in thousands)
<S> <C> <C> <C> <C>
Net Revenues:
Airfreight $31,505 41% $25,624 44%
Ocean freight 13,386 18 10,863 19
Customs brokerage and
import services 30,873 41 21,231 37
------- -- -------- --
Net revenues 75,764 100 57,718 100
------- --- -------- ---
Operating expenses:
Salaries and
related costs 42,456 56 32,330 56
Other 20,609 27 16,807 29
------- -- -------- --
Total operating
expenses 63,065 83 49,137 85
------- -- -------- --
Operating income 12,699 17 8,581 15
Other income, net 325 0 461 1
------- -- -------- --
Earnings before
income taxes 13,024 17 9,042 16
Income tax expense 4,990 6 3,444 6
------- -- -------- --
Net earnings $8,034 11% $5,598 10%
------- --- -------- ---
------- --- -------- ---
</TABLE>
Airfreight net revenues increased 23% for the three-month period ended
March 31, 1998 as compared with the same period for 1997. This increase was
primarily due to increased airfreight tonnage handled by the Company's expanding
global network.
Ocean freight net revenues increased 23% for the three-month period ended
March 31, 1998 as compared with the same period for 1997. The Company
continued to aggressively market competitive ocean freight rates primarily on
freight moving eastbound from the Far East. The ocean forwarding business
and ECMS (Expeditors Cargo Management Systems), the Company's ocean freight
consolidation management and purchase order tracking service, were
instrumental in helping the Company to expand its market share.
8
<PAGE>
Customs brokerage and import services increased 45% for the three-month
period ended March 31, 1998 as compared with the same period for 1997. 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, which is
included in this category, as a separate and distinct service.
Salaries and related costs increased during the three-month period ended
March 31, 1998 compared with the same period in 1997 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 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
growth in revenues, net revenue and net income for the three-month periods
ended March 31, 1998 and 1997 are a direct result of the incentives inherent
in the Company's incentive compensation program.
Other operating expenses increased for the three-month period ended March
31, 1998 as compared with the same period in 1997 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 2% in the
three-month period ended March 31, 1998, as compared with the same period in
1997. 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.
Other income, net, decreased for the three-month period ended March 31,
1998 as compared with the same period in 1997, principally due to lower
interest income on a smaller average cash balance during the period. The
primary factor which reduced cash available for investment was the Company's
real estate commitments. Cash balances increased towards the end of the first
Quarter of 1998, after the payment of peak season trade obligations and after
the collection of accounts receivable outstanding as of December 31, 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 during
the three-month period ended March 31, 1998 remained virtually constant as
compared with the same period in 1997.
9
<PAGE>
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 office 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 a 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 first quarter of 1998 and 1997 were immaterial.
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.
10
<PAGE>
Office Openings - The Company opened one start-up office during the first
quarter of 1998.
LATIN
AMERICA
Buenos Aires
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 first quarter of 1998 (which is the
measure of any increase from the same quarter of 1997) and for the first
quarter of 1997 (which measures growth over 1996).
<TABLE>
<CAPTION>
For the three months
ended March 31,
1998 1997
---- ----
<S> <C> <C>
Net revenue 22% 30%
Operating income 39% 50%
</TABLE>
Liquidity and Capital Resources
The Company's principal source of liquidity is cash generated from
operations. At March 31, 1998, working capital was $84 million, including
cash and short-term investments of $56 million. The Company had no long-term
debt at March 31, 1998. 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 $40 million on property and equipment in 1998,
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 $31.27 million. At March 31, 1998, the Company was
directly liable for $.11 million drawn on these lines of credit and was
contingently liable for an additional $17.875 million from standby letters of
credit. In addition, the Company maintains a bank facility with its U.K.
bank for $8.38 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.
11
<PAGE>
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.
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 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-K.
Exhibit
Number Description
------- -----------
Exhibit 27.1 Financial Data Schedule, EDGAR filing only.
Exhibit 27.2 Financial Data Schedule, EDGAR filing only.
Exhibit 27.3 Financial Data Schedule, EDGAR filing only.
(b) Reports on Form 8-K
No reports on Form 8-K were filed in the quarter ended March 31, 1998.
12
<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.
May 14, 1998 /s/ PETER J. ROSE
-------------------------------------------------
Peter J. Rose, Chairman
and Chief Executive Officer
(Principal Executive Officer)
May 14, 1998 /s/ R. JORDAN GATES
-------------------------------------------------
R. Jordan Gates, Senior Vice President-Chief
Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
13
<PAGE>
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Form 10-Q Index and Exhibits
March 31, 1998
Exhibit
Number Description Page Number
- ------- ----------- -----------
27.1 Financial Data Schedule (Filed Electronically Only).
27.2 Financial Data Schedule Restatement (Filed Electronically Only).
27.3 Financial Data Schedule Restatement (Filed Electronically Only).
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT 3-31-98 AND CONSOLIDATED STATEMENT OF INCOME FOR
THE 3 MONTHS ENDED 3-31-98 AND THE RELATED NOTES TO THESE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS THAT ARE CONTAINED IN THE COMPANY'S 1998 1ST QUARTER 10-Q
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 55,937
<SECURITIES> 341
<RECEIVABLES> 184,648
<ALLOWANCES> 6,787
<INVENTORY> 0
<CURRENT-ASSETS> 244,496
<PP&E> 116,765
<DEPRECIATION> 39,615
<TOTAL-ASSETS> 337,785
<CURRENT-LIABILITIES> 160,253
<BONDS> 0
0
0
<COMMON> 246
<OTHER-SE> 177,286
<TOTAL-LIABILITY-AND-EQUITY> 337,785
<SALES> 0
<TOTAL-REVENUES> 223,349
<CGS> 0
<TOTAL-COSTS> 147,585
<OTHER-EXPENSES> 63,065
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 13,024
<INCOME-TAX> 4,990
<INCOME-CONTINUING> 8,034
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,034
<EPS-PRIMARY> $ .33
<EPS-DILUTED> $ .30
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997 DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1997 JAN-01-1997 JAN-01-1997 JAN-01-1996
<PERIOD-END> MAR-31-1997 JUN-30-1997 SEP-30-1997 DEC-31-1996
<CASH> 43,677 44,586 47,416 36,966
<SECURITIES> 348 2,437 357 357
<RECEIVABLES> 171,151 188,897 230,408 173,810
<ALLOWANCES> 5,438 6,022 6,243 5,047
<INVENTORY> 0 0 0 0
<CURRENT-ASSETS> 219,839 241,687 286,620 215,443
<PP&E> 79,032 90,415 96,173 74,614
<DEPRECIATION> 29,827 32,905 34,427 28,368
<TOTAL-ASSETS> 278,572 314,494 363,454 271,986
<CURRENT-LIABILITIES> 132,520 161,117 200,227 131,975
<BONDS> 0 0 0 0
0 0 0 0
0 0 0 0
<COMMON> 243 243 245 242
<OTHER-SE> 145,809 153,134 162,982 139,769
<TOTAL-LIABILITY-AND-EQUITY> 278,572 314,494 363,454 271,986
<SALES> 0 0 0 0
<TOTAL-REVENUES> 195,969 421,544 683,853 730,088
<CGS> 0 0 0 0
<TOTAL-COSTS> 138,251 295,657 477,786 527,753
<OTHER-EXPENSES> 49,137 104,490 165,712 164,910
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 0 0 0 0
<INCOME-PRETAX> 9,042 22,426 41,479 39,584
<INCOME-TAX> 3,444 8,654 15,930 15,321
<INCOME-CONTINUING> 0 0 0 0
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 5,598 13,772 25,549 24,263
<EPS-PRIMARY> .23 .57 1.05 1.00
<EPS-DILUTED> .22 .53 .97 .95
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996 DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1996 JAN-01-1996 JAN-01-1995
<PERIOD-END> MAR-31-1996 JUN-30-1996 SEP-30-1996 DEC-31-1995
<CASH> 42,528 35,491 41,427 36,142
<SECURITIES> 197 2,074 471 457
<RECEIVABLES> 127,894 148,435 165,781 127,600
<ALLOWANCES> 4,114 4,517 4,363 3,807
<INVENTORY> 0 0 0 0
<CURRENT-ASSETS> 175,882 192,066 213,707 168,367
<PP&E> 50,358 66,060 68,618 49,041
<DEPRECIATION> 22,472 24,075 26,072 20,799
<TOTAL-ASSETS> 211,132 244,530 266,913 204,128
<CURRENT-LIABILITIES> 89,875 118,654 133,024 86,936
<BONDS> 0 0 0 0
0 0 0 0
0 0 0 0
<COMMON> 240 242 242 240
<OTHER-SE> 121,017 125,634 133,647 116,952
<TOTAL-LIABILITY-AND-EQUITY> 211,132 244,530 266,913 204,128
<SALES> 0 0 0 0
<TOTAL-REVENUES> 137,670 303,876 508,768 584,691
<CGS> 0 0 0 0
<TOTAL-COSTS> 96,938 216,014 364,673 430,618
<OTHER-EXPENSES> 35,182 73,931 118,082 127,222
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 0 0 0 0
<INCOME-PRETAX> 6,153 15,083 27,624 28,399
<INCOME-TAX> 2,364 5,923 10,784 11,004
<INCOME-CONTINUING> 0 0 0 0
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 3,789 9,160 16,840 17,395
<EPS-PRIMARY> .15 .37 .65 .73
<EPS-DILUTED> .15 .36 .66 .69
</TABLE>
