Expeditors Announces Net Earnings Increase of 12%

Expeditors International of Washington, Inc. (NASDAQ:EXPD), today announced net earnings of $66,472,000 for the first quarter of 2008, as compared with $59,288,000 for the same quarter of 2007, an increase of 12%. Net revenues for the first quarter increased 12% to $374,328,000, as compared with $334,136,000 reported for the first quarter of 2007. Total revenues and operating income were $1,307,321,000 and $105,564,000 in 2008, as compared with $1,118,946,000 and $94,525,000 for the same quarter of 2007, increases of 17% and 12%, respectively. Diluted net earnings per share for the first quarter were $.30, as compared with $.27 for the same quarter in 2007, an increase of 11%. The Company also reported that same store net revenues and operating income both increased 12%, respectively, during the first quarter of 2008, as compared with the same period in 2007. "We feel very good about these first quarter 2008 results. They are balanced from a global contribution perspective and they reinforce our long-held premise that Expeditors’ core growth potential comes from taking market share,” said Peter J. Rose, Chairman and Chief Executive Officer. "Despite having spent a good part of each day side stepping ‘chicken little’ and the associated pieces of ‘falling sky’ that follow him about, our employees actively sought out new business opportunities this quarter. This allowed us to expand market share by fulfilling our customers’ increasingly complex supply-chain requirements,” Rose explained. "Typically every year this business presents some kind of unique challenge. Apart from the ongoing Department of Justice investigation of our industry (which cost us over $1.6 million in legal fees alone during the first quarter), in 2008 we’ve had to endure the ‘non-stop’ 24-hour media sound bite harangue about the economy. We understand that while the general public’s perception of the state of the economy can’t be totally ignored, neither can it be accepted as a justification for lowering our standards or diminishing our intensity,” Rose continued. "So much of this is about maintaining confidence through keeping things in proper perspective. For instance, one needs to remember that even by the reckoning of the most pessimistic pundits, the economy in 2008 is pretty much the same size as it was last year in 2007. Given that we all felt pretty good about prospects last year, we don’t believe there is any good reason why we can’t generate market share gains in 2008. We’re grateful that our customers, our employees and our key service providers all share this same vision—one that has been a cornerstone of our philosophy since our inception,” Rose concluded. Expeditors is a global logistics company headquartered in Seattle, Washington. The company employs trained professionals in 179 full-service offices, 69 satellite locations and 4 international service centers located on six continents linked into a seamless worldwide network through an integrated information management system. Services include air and ocean freight forwarding, vendor consolidation, customs clearance, marine insurance, distribution and other value added international logistics services. Expeditors International of Washington, Inc. Financial Highlights Three months ended March 31, 2008 Unaudited (in 000's of US dollars except share data)   Three Months Ended 2008   2007 % Increase Revenues $ 1,307,321 $ 1,118,946 17% Net revenues $ 374,328 $ 334,136 12% Operating income $ 105,564 $ 94,525 12% Net earnings $ 66,472 $ 59,288 12% Diluted earnings per share $ .30 $ .27 11% Basic earnings per share $ .31 $ .28 11% Diluted weighted average shares outstanding 220,437,979 222,842,546 Basic weighted average shares outstanding 213,062,231 213,428,221 Offices opened during the First Quarter of 2008 ((a) = Full Service, (b) = Satellite)     ASIA NEAR/MIDDLE EAST NORTH AMERICA Fuzhou, People’s Republic of China(a) Damman, Kingdom of Saudi Arabia(a) Raleigh, Durham(a) Coimbatore, India(b) Kolkata, India(b) Manama, Kingdom of Bahrain(a) Investors may submit written questions via e-mail to: investor@expeditors.com Or by fax to: 206-674-3459 Questions received by the end of business on May 9, 2008 will be considered in management’s 8-K "Responses to Selected Questions” expected to be filed on or about May 16, 2008. EXPEDITORS INTERNATIONAL OF WASHINGTON, INC., AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except share data) (Unaudited)       March 31, December 31, Assets 2008 2007   Current assets: Cash and cash equivalents $ 740,966 $ 574,599 Short-term investments 606 674 Accounts receivable, net 878,191 933,519 Deferred Federal and state income taxes 7,185 8,278 Other current assets   19,117   17,627 Total current assets   1,646,065   1,534,697   Property and equipment, net 500,845 497,892 Goodwill, net 7,927 7,927 Other intangibles, net 7,710 7,832 Other assets 21,156 20,717     $ 2,183,703 $ 2,069,065 Liabilities and Shareholders' Equity   Current liabilities: Short term debt 748 - Accounts payable 615,800 613,108 Accrued expenses, primarily salaries and related costs 145,598 129,669 Federal, state and foreign income taxes   36,812   26,976 Total current liabilities $ 798,958 $ 769,753   Deferred Federal and state income taxes $ 67,566 $ 55,533   Minority interest $ 17,367 $ 17,208   Shareholders' equity: Preferred stock, par value $.01 per share. Authorized 2,000,000 shares; none issued -- -- Common stock, par value $.01 per share. Authorized 320,000,000 shares; issued and outstanding 212,995,326 shares at March 31, 2008 and 212,996,776 shares at December 31, 2007 2,130 2,130 Additional paid-in capital 48,788 50,006 Retained earnings 1,209,937 1,143,464 Accumulated other comprehensive income   38,957   30,971 Total shareholders' equity   1,299,812   1,226,571     $ 2,183,703 $ 2,069,065 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC., AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except share data) (Unaudited)     Three months ended March 31,   2008     2007   Revenues: Airfreight $ 599,763 $ 517,205 Ocean freight and ocean services 446,792 375,202 Customs brokerage and other services 260,766 226,539     Total revenues   1,307,321     1,118,946     Operating expenses: Airfreight consolidation 461,099 389,644 Ocean freight consolidation 360,440 298,891 Customs brokerage and other services 111,454 96,275 Salaries and related costs 205,815 182,761 Rent and occupancy costs 19,435 16,667 Depreciation and amortization 9,772 9,575 Selling and promotion 9,504 9,096 Other   24,238     21,512   Total operating expenses   1,201,757     1,024,421     Operating income   105,564     94,525     Interest expense (71 ) (14 ) Interest income 4,964 5,219 Other, net 1,274 755     Other income, net   6,167     5,960     Earnings before income taxes and minority interest 111,731 100,485   Income tax expense 45,210 41,160     Net earnings before minority interest   66,521     59,325     Minority interest (49 ) (37 )     Net earnings $ 66,472   $ 59,288     Diluted earnings per share $ 0.30   $ 0.27     Basic earnings per share $ 0.31   $ 0.28     Weighted average diluted shares outstanding   220,437,979     222,842,546     Weighted average basic shares outstanding   213,062,231     213,428,221   EXPEDITORS INTERNATIONAL OF WASHINGTON, INC., AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited)     Three months ended March 31, 2008   2007   Operating Activities: Net earnings $ 66,472 $ 59,288 Adjustments to reconcile net earnings to net cash provided by operating activities: Provision for losses on accounts receivable (177 ) 514 Deferred income tax expense 8,826 5,468 Excess tax benefits from stock plans (1,506 ) (16,332 ) Stock compensation expense 11,280 11,460 Depreciation and amortization 9,772 9,575 Gain on sale of assets (575 ) (123 ) Minority interest in earnings of consolidated entities 49 37 Other 417 334 Changes in operating assets and liabilities: Decrease in accounts receivable 59,754 57,701 Decrease (increase) in other current assets 55 (677 ) Increase (decrease) in accounts payable and other current liabilities 15,078 (13,635 ) Increase in taxes payable, net   9,260     2,469     Net cash provided by operating activities   178,705     116,079     Investing Activities: Decrease in short-term investments 47 86 Purchase of property and equipment (10,210 ) (13,438 ) Proceeds from sale of property and equipment 42 379 Other   363     (340 )   Net cash used in investing activities   (9,758 )   (13,313 )   Financing Activities: Net distributions to minority interests (107 ) - Borrowings of short-term debt, net 810 220 Proceeds from issuance of common stock 4,614 15,266 Repurchases of common stock (18,618 ) (72,398 ) Excess tax benefits from stock plans   1,506     16,332     Net cash used in financing activities (11,795 ) (40,580 )   Effect of exchange rate changes on cash   9,215     3,272     Increase in cash and cash equivalents 166,367 65,458   Cash and cash equivalents at beginning of period 574,599 511,358   Cash and cash equivalents at end of period   740,966     576,816     Interest and taxes paid: Interest 71 11 Income tax 24,272 33,033 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC., AND SUBSIDIARIES Business Segment Information (In thousands) (Unaudited)                   United Other Far Australia/ Latin Middle Elimi- Consoli- States N. America East Europe New Zealand America East nations dated Three months ended March 31, 2008   Revenues from unaffiliated customers $ 297,946 35,069 679,850 185,564 19,839 21,860 67,193 1,307,321 Transfers between geographic areas $ 24,081 2,073 5,111 10,502 2,134 3,307 3,997 (51,205 ) - Total revenues $ 322,027 37,142 684,961 196,066 21,973 25,167 71,190 (51,205 ) 1,307,321   Net revenues $ 149,055 16,674 98,741 65,773 11,699 12,645 19,741 374,328 Operating income $ 32,539 3,131 46,021 12,437 3,472 3,263 4,701 105,564 Identifiable assets at quarter end $ 999,281 70,349 465,935 444,133 36,072 52,824 109,713 5,396 2,183,703 Capital expenditures $ 3,636 336 3,303 1,610 194 271 860 10,210 Depreciation and amortization $ 5,346 312 1,254 1,768 249 315 528 9,772 Equity $ 1,437,355 34,711 355,801 171,294 23,068 27,142 52,381 (801,940 ) 1,299,812   Three months ended March 31, 2007   Revenues from unaffiliated customers $ 245,725 28,086 602,031 156,379 14,783 19,371 52,571 1,118,946 Transfers between geographic areas $ 22,498 1,978 3,980 7,761 1,697 2,506 3,423 (43,843 ) - Total revenues $ 268,223 30,064 606,011 164,140 16,480 21,877 55,994 (43,843 ) 1,118,946   Net revenues $ 135,467 14,700 93,153 56,027 8,927 9,795 16,067 334,136 Operating income $ 28,063 2,729 44,884 10,151 2,404 2,052 4,242 94,525 Identifiable assets at quarter end $ 878,559 62,270 395,634 361,557 27,678 38,209 75,262 (2,370 ) 1,836,799 Capital expenditures $ 8,705 324 1,333 1,385 694 495 502 13,438 Depreciation and amortization $ 5,169 331 1,375 1,737 200 400 363 9,575 Equity $ 1,239,866 29,120 285,593 126,658 17,169 17,481 36,299 (650,659 ) 1,101,527