EXPD Expeditors International of Washington Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 05, 2024

 

 

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Washington			001-41871	91-1069248
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
Sterling Plaza 2 3rd Floor 3545 Factoria Blvd SE
Bellevue, Washington				98006
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 206 674-3400

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		EXPD		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

---

 

Item 2.02 Results of Operations and Financial Condition.

On November 5, 2024, Expeditors International of Washington, Inc., a Washington corporation, issued a press release announcing third quarter 2024 financial results. A copy of the press release is furnished as Exhibit 99.1 to this report.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) The following items are filed as exhibits to this report:

99.1		Press release, dated November 5, 2024 issued by Expeditors International of Washington, Inc.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

---

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 hereunto duly authorized.

			EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
Date:	November 5, 2024	By:	/S/ Bradley S. Powell
			Bradley S. Powell, Senior Vice President and Chief Financial Officer

 

---

Exhibit 99.1

 

EARNINGS RELEASE

 

By:		Expeditors International of Washington, Inc.
		Sterling Plaza 2, 3rd Floor 3545 Factoria Blvd. SE Bellevue, Washington 98006
		CONTACTS:
		Jeffrey S. Musser		Bradley S. Powell		Geoffrey Buscher
		President and Chief Executive Officer		Senior Vice President and Chief Financial Officer		Director - Investor Relations
		(206) 674-3433		(206) 674-3412		(206) 892-4510

 

FOR IMMEDIATE RELEASE

 

EXPEDITORS REPORTS THIRD QUARTER 2024 EPS OF $1.63

BELLEVUE, WASHINGTON - November 5, 2024, Expeditors International of Washington, Inc. (NYSE:EXPD) today announced third quarter 2024 financial results including the following comparisons to the same quarter of 2023:

 

“We have worked hard over this past year to gain additional volumes and grow our business by winning new customers and gaining additional business with current customers,” said Jeffrey S. Musser, President and Chief Executive Officer. “These positive third-quarter results reflect those efforts in securing higher tonnage and volumes, which were further boosted as some shippers pulled freight forward out of concern over port actions and geopolitical disruptions, and in advance of fourth quarter holiday sales. Geopolitical events continued to impact pricing and the flow of freight during the quarter. Ocean transit times remained extended because carriers avoided the Red Sea and were further disrupted by prior concerns over potential port strikes. Air capacity is too scarce and costly to serve as a viable widespread alternative for most shippers.

“Strong growth in air tonnage and ocean volumes had a positive impact on all areas of our business during the quarter. Air tonnage and rates increased across all regions. Direct e-commerce continued to absorb available air freight capacity and boost rates on North Asia exports, and manufacturing relocations and sea-to-air conversions drove higher rates on exports from South Asia. Higher volumes moving through our network led to an increase in fees for customs brokerage and other ancillary services, in addition to new road freight business and growth in order management services. All in all, I would be hard pressed to point to an area of our business where our people did not perform at their highest level.

“We would again caution that our ability to see much beyond our day-to-day levels of activity remains challenging. We believe that ocean rates may decline if demand softens and capacity increases, particularly if commerce on the Red Sea returns to normal. We also believe that global freight markets and pricing are likely to remain volatile for some time. Unpredictable events seem to occur with such increased regularity as to make us wonder if disruption is the new state of normal. Regardless, we remain focused on servicing our current customers and gaining market share, while keeping costs in check.”

Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “We handled increased volumes and tonnage in the third quarter and executed well throughout our network, while keeping headcount flat and controlling operating expenses. Our measure of operating efficiency (operating income as a percentage of revenue less directly related cost of transportation and other expenses) is now back to our 30% target for the year to date. We continue to

---

control and carefully manage our cash, while working to improve operational efficiencies and return capital to investors.”

 

Mr. Powell noted that the Company repurchased $140 million in common stock during the third quarter of 2024, and $603 million year to date.

 

Expeditors is a global logistics company headquartered in Bellevue, 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 inflation; continued growth in air and ocean carrier capacity and the impact on rates; unpredictability in the ocean and air markets, including uncertainty due to conflicts in the Middle East and Red Sea; port actions and other labor disruptions; new capacity in the marketplace; longer ocean transit times; strong e-commerce demand in the air market; and volatile rates. Future financial performance could differ materially because of factors such as: our ability to secure higher air tonnage and ocean volumes; our ability to keep headcount and other costs in check while continuing to generate efficiency that meets our historical expectations; the alignment of our variable compensation structure with performance; our ability to enhance and bolster our network security; that management is able to grow the business and explore new areas for profitable growth; our ability to leverage the strength of our carrier relationships; the strength of our non-asset-based operating model; and our ability to remain a strong, healthy, unified and resilient organization. Geo-political risks, port actions and other labor disruptions, and 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 and contingencies, including risks associated with tax audits, 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, 2023, 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.

Third Quarter 2024 Earnings Release, November 5, 2024

Financial Summary for the three months ended September 30, 2024 and 2023 (Unaudited)

(in 000's of US dollars except share data)

 

 

		Three months ended September 30,										Nine months ended September 30,
		2024				2023				% Change		2024				2023				% Change
Revenues		$	3,000,131			$	2,190,001			37%		$	7,645,810			$	7,022,342			9%
Directly related cost of transportation and other expenses 1		$	2,093,964			$	1,402,111			49%		$	5,166,652			$	4,540,396			14%
Salaries and other operating expenses 2		$	604,643			$	571,821			6%		$	1,738,939			$	1,741,411			(0)%
Operating income		$	301,524			$	216,069			40%		$	740,219			$	740,535			(0)%
Net earnings attributable to shareholders		$	229,574			$	171,353			34%		$	574,195			$	594,164			(3)%
Diluted earnings attributable to shareholders per share		$	1.63			$	1.16			41%		$	4.04			$	3.92			3%
Basic earnings attributable to shareholders per share		$	1.63			$	1.16			41%		$	4.06			$	3.95			3%
Diluted weighted average shares outstanding			141,027				148,001						142,288				151,619
Basic weighted average shares outstanding			140,417				147,099						141,540				150,543

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.

 

During the three and nine months ended September 30, 2024 we repurchased 1.2 million and 5.1 million shares of common stock at an average price of $118.47 and $119.21 per share. During the three and nine months ended September 30, 2023 we repurchased 2.6 million and 10.5 million shares of common stock at an average price of $116.29 and $113.97 per share.

 

 

		Employee Full-time Equivalents as of
		September 30, 2024				September 30, 2023
North America			6,920				6,975
Europe			3,838				3,811
North Asia			2,271				2,290
South Asia			1,776				1,709
Middle East, Africa and India			1,386				1,440
Latin America			780				753
Information Systems			1,303				1,244
Corporate			416				403
Total			18,690				18,625

 

 

		Third quarter year-over-year percentage increase (decrease) in:
2024		Airfreight kilos		Ocean freight FEU
July		20%		8%
August		17%		14%
September		20%		15%
Quarter		19%		12%

 

Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on November 8, 2024 will be considered in management's 8-K “Responses to Selected Questions.”

---

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

 

		September 30, 2024				December 31, 2023
Assets:
Current Assets:
Cash and cash equivalents		$	1,293,173			$	1,512,883
Accounts receivable, less allowance for credit loss of     $5,903 at September 30, 2024 and $6,550 at December 31, 2023			2,176,959				1,532,599
Deferred contract costs			431,640				218,807
Other			181,273				170,907
Total current assets			4,083,045				3,435,196
Property and equipment, less accumulated depreciation and     amortization $624,562 at September 30, 2024 and $597,473 at December 31, 2023			468,594				479,225
Operating lease right-of-use assets			525,810				516,280
Goodwill			7,927				7,927
Deferred federal and state income taxes, net			69,789				63,690
Other assets, net			15,752				21,491
Total assets		$	5,170,917			$	4,523,809
Liabilities:
Current Liabilities:
Accounts payable		$	1,240,174			$	860,856
Accrued liabilities, primarily salaries and related costs			470,723				447,336
Contract liabilities			532,289				280,909
Current portion of operating lease liabilities			106,832				99,749
Federal, state and foreign income taxes			25,728				15,562
Total current liabilities			2,375,746				1,704,412
Noncurrent portion of operating lease liabilities			436,001				427,984
Shareholders’ Equity:
Preferred stock, none issued			—				—
Common stock, par value $0.01 per share. Issued and outstanding:     139,971 shares at September 30, 2024 and 143,866 shares at December 31, 2023			1,400				1,439
Additional paid-in capital			4,307				—
Retained earnings			2,540,978				2,580,968
Accumulated other comprehensive loss			(189,978	)			(192,057	)
Total shareholders’ equity			2,356,707				2,390,350
Noncontrolling interest			2,463				1,063
Total equity			2,359,170				2,391,413
Total liabilities and equity		$	5,170,917			$	4,523,809

 

---

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(In thousands, except per share data)

(Unaudited)

 

		Three months ended September 30,								Nine months ended September 30,
		2024				2023				2024				2023
Revenues:
Airfreight services		$	986,950			$	724,331			$	2,606,647			$	2,380,405
Ocean freight and ocean services			1,017,618				560,281				2,240,079				1,851,389
Customs brokerage and other services			995,563				905,389				2,799,084				2,790,548
Total revenues			3,000,131				2,190,001				7,645,810				7,022,342
Operating Expenses:
Airfreight services			740,356				516,519				1,923,115				1,707,568
Ocean freight and ocean services			783,827				387,670				1,675,931				1,277,159
Customs brokerage and other services			569,781				497,922				1,567,606				1,555,669
Salaries and related			450,308				412,505				1,289,901				1,290,911
Rent and occupancy			61,024				58,387				181,873				174,224
Depreciation and amortization			15,774				15,607				45,914				46,374
Selling and promotion			7,589				6,149				22,366				18,847
Other			69,948				79,173				198,885				211,055
Total operating expenses			2,698,607				1,973,932				6,905,591				6,281,807
Operating income			301,524				216,069				740,219				740,535
Other Income (Expense):
Interest income			9,917				17,156				36,699				53,723
Other, net			973				(1,334	)			4,599				4,394
Other income, net			10,890				15,822				41,298				58,117
Earnings before income taxes			312,414				231,891				781,517				798,652
Income tax expense			82,488				61,048				206,040				206,018
Net earnings			229,926				170,843				575,477				592,634
Less net earnings (losses) attributable to the noncontrolling    interest			352				(510	)			1,282				(1,530	)
Net earnings attributable to shareholders		$	229,574			$	171,353			$	574,195			$	594,164
Diluted earnings attributable to shareholders per share		$	1.63			$	1.16			$	4.04			$	3.92
Basic earnings attributable to shareholders per share		$	1.63			$	1.16			$	4.06			$	3.95
Weighted average diluted shares outstanding			141,027				148,001				142,288				151,619
Weighted average basic shares outstanding			140,417				147,099				141,540				150,543

 

---

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

		Three months ended September 30,								Nine months ended September 30,
		2024				2023				2024				2023
Operating Activities:
Net earnings		$	229,926			$	170,843			$	575,477			$	592,634
Adjustments to reconcile net earnings to net cash from operating activities:
Provisions for (recoveries) losses on accounts receivable			(582	)			1,411				1,456				2,316
Deferred income tax benefit			(1,057	)			(6,418	)			(5,680	)			(7,942	)
Stock compensation expense			9,760				15,879				47,836				46,962
Depreciation and amortization			15,774				15,607				45,914				46,374
Other, net			162				2,673				4,032				6,396
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable			(301,167	)			(53,722	)			(647,794	)			629,205
Increase (decrease) in accounts payable and accrued liabilities			107,535				40,919				402,818				(311,990	)
(Increase) decrease in deferred contract costs			(30,657	)			(56,917	)			(216,977	)			28,870
Increase (decrease) in contract liabilities			50,527				74,701				254,902				(33,549	)
Increase (decrease) in income taxes payable, net			20,331				(4,017	)			13,163				(97,743	)
Increase in other, net			(10,580	)			(10,979	)			(1,502	)			(6,695	)
Net cash from operating activities			89,972				189,980				473,645				894,838
Investing Activities:
Purchase of property and equipment			(12,291	)			(7,993	)			(30,415	)			(28,600	)
Other, net			(225	)			10				(62	)			(209	)
Net cash from investing activities			(12,516	)			(7,983	)			(30,477	)			(28,809	)
Financing Activities:
Proceeds (payments) on borrowings on lines of credit, net			10,445				6,913				(5,538	)			(6,683	)
Proceeds from issuance of common stock			53,256				61,841				67,734				80,305
Repurchases of common stock			(140,031	)			(298,103	)			(602,855	)			(1,199,294	)
Dividends paid			—				—				(102,638	)			(102,263	)
Payments for taxes related to net share settlement of equity awards			—				—				(15,348	)			(19,501	)
Net cash from financing activities			(76,330	)			(229,349	)			(658,645	)			(1,247,436	)
Effect of exchange rate changes on cash and cash equivalents			20,194				(11,807	)			(4,233	)			(13,296	)
Change in cash and cash equivalents			21,320				(59,159	)			(219,710	)			(394,703	)
Cash and cash equivalents at beginning of period			1,271,853				1,698,587				1,512,883				2,034,131
Cash and cash equivalents at end of period		$	1,293,173			$	1,639,428			$	1,293,173			$	1,639,428
Taxes Paid:
Income taxes		$	63,046			$	61,603			$	196,649			$	306,059

 

---

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 September 30, 2024:
Revenues		$	854,679				114,264				61,981				914,417				445,308				433,660				177,145				(1,323	)			3,000,131
Directly related cost of transportation and other expenses1		$	443,930				67,626				38,973				763,781				369,905				279,235				131,098				(584	)			2,093,964
Salaries and other operating expenses2		$	253,452				35,261				18,605				86,566				51,307				126,917				33,283				(748	)			604,643
Operating income		$	157,297				11,377				4,403				64,070				24,096				27,508				12,764				9				301,524
Identifiable assets at period end		$	2,611,417				192,370				108,985				727,724				376,283				863,840				319,627				(29,329	)			5,170,917
Capital expenditures		$	9,299				198				101				296				839				1,548				10				—				12,291
Equity		$	1,628,893				35,825				42,670				221,519				124,387				182,515				164,665				(41,304	)			2,359,170
For the three months ended September 30, 2023:
Revenues		$	784,503				106,293				47,327				515,340				207,006				410,904				119,849				(1,221	)			2,190,001
Directly related cost of transportation and other expenses1		$	421,432				63,671				28,409				398,681				145,292				263,524				81,643				(541	)			1,402,111
Salaries and other operating expenses2		$	261,323				38,275				16,405				66,546				42,138				120,436				27,351				(653	)			571,821
Operating income		$	101,748				4,347				2,513				50,113				19,576				26,944				10,855				(27	)			216,069
Identifiable assets at period end		$	2,572,404				200,711				110,708				512,746				217,018				726,729				260,619				(22,814	)			4,578,121
Capital expenditures		$	3,762				302				84				168				409				1,369				1,899				—				7,993
Equity		$	1,797,123				46,264				54,096				225,229				91,712				154,617				161,882				(39,449	)			2,491,474
		UNITED STATES				OTHER NORTH AMERICA				LATIN AMERICA				NORTH ASIA				SOUTH ASIA				EUROPE				MIDDLE EAST, AFRICA AND INDIA				ELIMI- NATIONS				CONSOLI- DATED
For the nine months ended September 30, 2024:
Revenues		$	2,385,392				331,837				151,787				2,096,709				960,970				1,241,432				481,600				(3,917	)			7,645,810
Directly related cost of transportation and other expenses1		$	1,270,981				199,710				88,077				1,702,401				757,167				796,205				353,839				(1,728	)			5,166,652
Salaries and other operating expenses2		$	772,835				102,684				49,920				224,588				135,303				363,718				92,099				(2,208	)			1,738,939
Operating income		$	341,576				29,443				13,790				169,720				68,500				81,509				35,662				19				740,219
Identifiable assets at period end		$	2,611,417				192,370				108,985				727,724				376,283				863,840				319,627				(29,329	)			5,170,917
Capital expenditures		$	17,775				2,172				383				933				2,938				4,860				1,354								30,415
Equity		$	1,628,893				35,825				42,670				221,519				124,387				182,515				164,665				(41,304	)			2,359,170
For the nine months ended September 30, 2023:
Revenues		$	2,535,945				326,398				151,994				1,607,788				631,001				1,386,284				386,524				(3,592	)			7,022,342
Directly related cost of transportation and other expenses1		$	1,387,511				201,984				90,139				1,238,996				437,392				924,592				261,482				(1,700	)			4,540,396
Salaries and other operating expenses2		$	785,282				108,892				52,172				205,976				132,984				373,004				85,003				(1,902	)			1,741,411
Operating income		$	363,152				15,522				9,683				162,816				60,625				88,688				40,039				10				740,535
Identifiable assets at period end		$	2,572,404				200,711				110,708				512,746				217,018				726,729				260,619				(22,814	)			4,578,121
Capital expenditures		$	15,829				932				360				1,110				744				6,688				2,937				—				28,600
Equity		$	1,797,123				46,264				54,096				225,229				91,712				154,617				161,882				(39,449	)			2,491,474

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.

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.

 

---

v3.24.3

Document And Entity Information	Nov. 05, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 05, 2024
Entity Registrant Name	EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
Entity Central Index Key	0000746515
Entity Emerging Growth Company	false
Entity File Number	001-41871
Entity Incorporation, State or Country Code	WA
Entity Tax Identification Number	91-1069248
Entity Address, Address Line One	Sterling Plaza 2
Entity Address, Address Line Two	3rd Floor
Entity Address, Address Line Three	3545 Factoria Blvd SE
Entity Address, City or Town	Bellevue
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98006
City Area Code	206
Local Phone Number	674-3400
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	EXPD
Security Exchange Name	NYSE

---