CORRECTING and REPLACING Expeditors Reports First Quarter 2023 EPS of $1.45

SEATTLE--(BUSINESS WIRE)-- This press release is to correct and replace the previously issued press release to reflect the following.

The following footnote should read as follows:

During the three months ended March 31, 2023, we repurchased 2.0 million shares of common stock at an average price of $108.98 per share, compared to the three months ended March 31, 2022 when we did not repurchase any shares of common stock.

The prior version had incorrectly stated the following:

During the three months ended March 31, 2023, we repurchased 1,959 million shares of common stock at an average price of $108.98 per share, compared to the three months ended March 31, 2022 when we did not repurchase any shares of common stock.

The updated release reads:

EXPEDITORS REPORTS FIRST QUARTER 2023 EPS OF $1.45

Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced first quarter 2023 financial results including the following comparisons to the same quarter of 2022:

• Diluted Net Earnings Attributable to Shareholders per share (EPS¹) decreased 29% to $1.45
• Net Earnings Attributable to Shareholders decreased 35% to $226 million
• Operating Income decreased 40% to $276 million
• Revenues decreased 44% to $2.6 billion
• Airfreight tonnage volume decreased 6% and ocean container volume decreased 26%

“Operating conditions during the first quarter of 2023 were very similar to what we experienced in the fourth quarter of 2022, when shippers swiftly adapted to increased consumer caution and slowing demand for their products, while also battling inflation and tighter financing,” said Jeffrey S. Musser, President and Chief Executive Officer. “Our business continued to be impacted by comparatively soft demand, along with significantly reduced buy and sell rates relative to what we experienced during the pandemic. We are adapting and working diligently to bring expenses in line with lower revenue by lowering headcount and payroll expenses without resorting to layoffs.

“Following the steep drop in volumes and rates in the fourth quarter, the economic challenges continued to impact all of our businesses during the first quarter. With supply chains largely normalized, average sell rates in air fell ahead of declining buy rates, and tonnage also declined. Ocean volumes were lower and sell rates also fell faster than buy rates, while carrier capacity is no longer constrained and schedules have become more regular. Revenues in Customs Brokerage and Other Services also declined and expenses were significantly lower compared to a year ago because supply-chain congestion largely cleared and there were fewer costs incurred related to the February 2022 cyber-attack.

“Throughout our long history, we have demonstrated an ability to adapt to change. Wherever we look, there is uncertainty with the global economy and our industry is now very far removed from the pandemic days when capacity was extremely constrained and the ports were gridlocked. For the time being, everyone from ocean and air carriers to shippers are highly focused on everything impacting their bottom line, including the cost of moving goods.”

Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “We are adjusting well to the current operating environment of lower tonnage and volumes and unpredictable buy and sell rates, and we are working diligently to gain efficiencies and bring expenses in line with revenue. Compared to the year-ago period, which was significantly impacted by the February 2022 cyber-attack, salaries and related costs decreased 17% on lower commissions and bonuses as a result of lower revenues and operating income. Those cost decreases demonstrate the power behind our incentive-based compensation structure, which rewards our people when financial results are strong, and naturally incentivizes them to make adjustments based on volumes and improve efficiency when financial results are less robust. We continue to carefully monitor cash flow from operations, which exceeded $546 million in the first quarter of 2023, and we returned $213 million to shareholders via repurchases of common stock.”

____________________

1Diluted earnings attributable to shareholders per share.

NOTE: See Disclaimer on Forward-Looking Statements in this release.

Expeditors is a global logistics company headquartered in Seattle, Washington. The Company employs trained professionals in 176 district offices and numerous branch locations located on six continents linked into a seamless worldwide network through an integrated information management system. Services include the consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, time-definite transportation, order management, warehousing and distribution and customized logistics solutions.

Disclaimer on Forward-Looking Statements:

Certain statements contained in this news release are “forward-looking statements,” based on management’s views with respect to future events and underlying assumptions that involve risks and uncertainties. These forward-looking statements include statements regarding our uncertain short-term outlook; a normalized supply chain; softening demand; pressure on buy and sell rates; an increasingly fragile global economy; rising inflation and financing costs; and signs of a slowing economy and drop in demand. Future financial performance could differ materially because of factors such as: our ability to leverage the strength of our carrier relationships; the strength of our non-asset-based operating model; our expectation that pressure on rates may continue; our ability to align expenses with revenues and to enhance our productivity; our ability to maintain our existing accounts and gain new business; our ability to invest in our strategic efforts to explore new areas for profitable growth; and our ability to remain a strong, healthy, unified and resilient organization. The normalizing of the supply chain at the end of the pandemic, along with the current uncertainty in the global economy, could have the effect of heightening many of the other risks described in Item 1A of our Annual Report on Form 10-K, including, without limitation, those related to the success of our strategy and desire to maintain historical unitary profitability, our ability to attract and retain customers, our ability to manage costs, interruptions to our information technology systems, the ability of third-party providers to perform and potential litigation as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission. These and other factors are discussed in the Company’s regulatory filings with the Securities and Exchange Commission, including those in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and the Company’s most recent Form 10-Q. The forward-looking statements contained in this news release speak only as of this date and the Company does not assume any obligation to update them except as required by law.

Expeditors International of Washington, Inc.
First Quarter 2023 Earnings Release, May 2, 2023
Financial Highlights for the three months ended March 31, 2023 and 2022 (Unaudited)
(in 000's of US dollars except share data)
		Three months ended March 31,
		2023				2022				% Change
Revenues		$	2,592,589			$	4,664,298			(44)%
Directly related cost of transportation and other expenses 1		$	1,719,102			$	3,516,111			(51)%
Salaries and other operating expenses 2		$	597,518			$	686,427			(13)%
Operating income 3		$	275,969			$	461,760			(40)%
Net earnings attributable to shareholders		$	226,011			$	346,109			(35)%
Diluted earnings attributable to shareholders per share		$	1.45			$	2.05			(29)%
Basic earnings attributable to shareholders per share		$	1.47			$	2.07			(29)%
Diluted weighted average shares outstanding			155,472				169,216
Basic weighted average shares outstanding			154,164				167,499

____________________

1Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings.

2Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings.

3Operating income in the first quarter 2022 includes $62 million in expenses incurred as a result of the Company's global systems downtime and investigation, recovery and remediation efforts caused by a targeted cyber-attack that occurred in that quarter.

During the three months ended March 31, 2023, we repurchased 2.0 million shares of common stock at an average price of $108.98 per share, compared to the three months ended March 31, 2022 when we did not repurchase any shares of common stock.

		Employee Full-time Equivalents as of
		March 31, 2023				December 31, 2022				March 31, 2022
North America			7,455				7,778				7,718
Europe			4,089				4,228				4,020
North Asia			2,385				2,448				2,511
South Asia			1,790				1,851				1,790
Middle East, Africa and India			1,502				1,540				1,527
Latin America			816				859				832
Information Systems			1,220				1,173				1,042
Corporate			424				425				427
Total			19,681				20,302				19,867

		First quarter year-over-year percentage increase (decrease) in 1:
2023		Airfreight kilos		Ocean freight FEU
January		(27)%		(23)%
February		(10)%		(25)%
March		33%		(29)%
Quarter		(6)%		(26)%

____________________
1February and March 2022 air and ocean activity was significantly reduced due to the Company’s global systems downtime experienced as result of a cyber-attack that occurred in the first quarter 2022, affecting comparability with the first quarter 2023 results.
Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on May 5, 2023 will be considered in management's 8-K “Responses to Selected Questions.”

____________________

NOTE: See Disclaimer on Forward-Looking Statements in this release.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
		March 31, 2023				December 31, 2022
Assets:
Current Assets:
Cash and cash equivalents		$	2,350,794			$	2,034,131
Accounts receivable, less allowance for credit loss of $8,358 at March 31, 2023 and $9,466 at December 31, 2022			1,604,467				2,107,645
Deferred contract costs			195,670				257,545
Other			106,080				118,696
Total current assets			4,257,011				4,518,017
Property and equipment, less accumulated depreciation and amortization $577,841 at March 31, 2023 and $567,757 at December 31, 2022			500,482				501,916
Operating lease right-of-use assets			509,019				507,503
Goodwill			7,927				7,927
Deferred federal and state income taxes, net			38,093				37,449
Other assets, net			20,045				17,622
Total assets		$	5,332,577			$	5,590,434
Liabilities:
Current Liabilities:
Accounts payable		$	950,907			$	1,108,996
Accrued expenses, primarily salaries and related costs			432,816				479,262
Contract liabilities			244,667				323,101
Current portion of operating lease liabilities			98,469				95,621
Federal, state and foreign income taxes			33,197				47,075
Total current liabilities			1,760,056				2,054,055
Noncurrent portion of operating lease liabilities			422,153				422,844
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, none issued			—				—
Common stock, par value $0.01 per share. Issued and outstanding: 152,712 shares at March 31, 2023 and 154,313 shares at December 31, 2022			1,527				1,543
Additional paid-in capital			—				139
Retained earnings			3,336,140				3,310,892
Accumulated other comprehensive loss			(190,498	)			(202,553	)
Total shareholders’ equity			3,147,169				3,110,021
Noncontrolling interest			3,199				3,514
Total equity			3,150,368				3,113,535
Total liabilities and equity		$	5,332,577			$	5,590,434

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(In thousands, except per share data)
(Unaudited)
		Three months ended March 31,
		2023				2022
Revenues:
Airfreight services		$	904,903			$	1,598,555
Ocean freight and ocean services			697,307				1,976,246
Customs brokerage and other services			990,379				1,089,497
Total revenues			2,592,589				4,664,298
Operating Expenses:
Airfreight services			666,022				1,142,546
Ocean freight and ocean services			483,682				1,600,243
Customs brokerage and other services			569,398				773,322
Salaries and related			449,848				538,940
Rent and occupancy			57,632				50,928
Depreciation and amortization			15,261				12,975
Selling and promotion			6,384				4,048
Other			68,393				79,536
Total operating expenses			2,316,620				4,202,538
Operating income			275,969				461,760
Other Income (Expense):
Interest income			18,775				1,892
Interest expense			(2,645	)			(503	)
Other, net			8,479				8,030
Other income (expense), net			24,609				9,419
Earnings before income taxes			300,578				471,179
Income tax expense			74,580				121,699
Net earnings			225,998				349,480
Less net (losses) earnings attributable to the noncontrolling interest			(13	)			3,371
Net earnings attributable to shareholders		$	226,011			$	346,109
Diluted earnings attributable to shareholders per share		$	1.45			$	2.05
Basic earnings attributable to shareholders per share		$	1.47			$	2.07
Weighted average diluted shares outstanding			155,472				169,216
Weighted average basic shares outstanding			154,164				167,499

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
		For the three months ended March 31,
		2023				2022
Operating Activities:
Net earnings		$	225,998			$	349,480
Adjustments to reconcile net earnings to net cash from operating activities:
Provisions for losses (recoveries) on accounts receivable			1,072				(416	)
Deferred income tax expense (benefit)			2,036				(3,236	)
Stock compensation expense			12,488				11,603
Depreciation and amortization			15,261				12,975
Other, net			1,159				455
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable			508,606				(132,348	)
(Decrease) increase in accounts payable and accrued liabilities			(202,923	)			140,191
Decrease in deferred contract costs			67,621				173,930
Decrease in contract liabilities			(84,447	)			(193,357	)
Increase in income taxes payable, net			91				46,259
(Increase) decrease in other, net			(550	)			8,410
Net cash from operating activities			546,412				413,946
Investing Activities:
Purchase of property and equipment			(10,126	)			(14,412	)
Other, net			575				79
Net cash from investing activities			(9,551	)			(14,333	)
Financing Activities:
Payments on borrowings on lines of credit			(26,402	)			(3,102	)
Proceeds from borrowings on lines of credit			11,495				22,592
Proceeds from issuance of common stock			9,288				5,751
Repurchases of common stock			(213,502	)			—
Payments for taxes related to net share settlement of equity awards			(7,445	)			(7,482	)
Net cash from financing activities			(226,566	)			17,759
Effect of exchange rate changes on cash and cash equivalents			6,368				(6,438	)
Change in cash and cash equivalents			316,663				410,934
Cash and cash equivalents at beginning of period			2,034,131				1,728,692
Cash and cash equivalents at end of period		$	2,350,794			$	2,139,626
Taxes Paid:
Income taxes		$	70,786			$	77,960

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Business Segment Information
(In thousands)
(Unaudited)
		UNITED STATES				OTHER NORTH AMERICA				LATIN AMERICA				NORTH ASIA				SOUTH ASIA				EUROPE				MIDDLE EAST, AFRICA AND INDIA				ELIMI- NATIONS				CONSOLI- DATED
For the three months ended March 31, 2023:
Revenues		$	945,494				109,850				54,695				582,421				224,127				534,464				142,703				(1,165	)			2,592,589
Directly related cost of transportation and other expenses1		$	539,957				69,205				32,302				452,342				157,623				372,260				95,949				(536	)			1,719,102
Salaries and other operating expenses2		$	267,683				35,824				19,502				71,140				46,798				127,372				29,832				(633	)			597,518
Operating income (loss)		$	137,854				4,821				2,891				58,939				19,706				34,832				16,922				4				275,969
Identifiable assets at period end		$	3,005,502				206,459				119,334				633,970				284,028				844,049				254,458				(15,223	)			5,332,577
Capital expenditures		$	5,444				469				230				590				167				2,983				243				—				10,126
Equity		$	2,284,489				35,977				57,026				317,325				153,321				191,116				154,143				(43,029	)			3,150,368
For the three months ended March 31, 2022:
Revenues		$	1,241,224				104,610				57,707				1,769,016				646,329				575,791				270,681				(1,060	)			4,664,298
Directly related cost of transportation and other expenses1		$	763,423				64,232				33,857				1,480,093				538,883				417,620				218,100				(97	)			3,516,111
Salaries and other operating expenses2		$	333,649				24,869				13,101				123,113				45,329				109,269				38,042				(945	)			686,427
Operating income		$	144,152				15,509				10,749				165,810				62,117				48,902				14,539				(18	)			461,760
Identifiable assets at period end		$	4,199,798				283,674				147,391				1,329,469				591,672				1,076,451				358,722				(31,184	)			7,955,993
Capital expenditures		$	9,477				1,078				109				531				290				2,058				869				—				14,412
Equity		$	2,753,888				108,208				52,188				337,802				189,168				317,436				133,250				(42,609	)			3,849,331

1 Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings.

2 Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230501005704/en/

Jeffrey S. Musser

President and Chief Executive Officer

(206) 674-3433

Bradley S. Powell

Senior Vice President and Chief Financial Officer

(206) 674-3412

Geoffrey Buscher

Director - Investor Relations

(206) 892-4510

Source: Expeditors International of Washington, Inc.