EXHIBIT 99.1
(EGL LOGO) World Headquarters
15350 Vickery Drive
Houston, TX 77032
Elijio Serrano
Chief Financial Officer
281-618-3665
NEWS RELEASE
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
TUESDAY, MAY 13, 2003
EGL, INC. REPORTS EPS OF $0.06,
GROSS REVENUES OUTSIDE NORTH AMERICA INCREASE 33%
HOUSTON, MAY 13, 2003 - EGL, INC. (NASDAQ: EAGL) announced that it earned $2.8
million of net income for the three months ended March 31, 2003, compared to a
loss of $3.9 million in the first quarter of 2002. Diluted earnings per share
for the quarter were $0.06 compared to diluted loss per share of $0.08 in
Q1-2002.
FINANCIAL HIGHLIGHTS
o Gross revenues improved $67 million, or 16%.
o Net revenues increased 9%.
o North America gross revenues increased 4% on continued growth
of ground shipment activity.
o Gross revenues outside North America increased 33% while net
revenue margins decreased from 29.3% to 26.3%.
o Operating expenses increased 5% (excluding the $2.5 million
benefit in Q1-2002 from temporary salary reductions) compared
to an increase in net revenues of 9%.
o Losses from two logistics projects in Europe decrease EPS by
$0.04.
<Table>
<Caption>
QUARTER ENDED
$ thousands (except EPS) 3/31/03 3/31/02
------------ ------------
Gross revenues $ 483,650 $ 417,109
Net revenues $ 167,566 $ 154,120
Net revenue margin 34.6% 36.9%
Operating expenses $ 162,928 $ 152,584
Operating income $ 4,638 $ 1,536
Net income/(loss) $ 2,795 $ (3,917)
Diluted EPS $ 0.06 $ (0.08)
</Table>
Gross revenues increased 16% from the first quarter of 2002 to $484 million on
stronger activity levels from all product lines in all geographic areas.
EGL Chief Executive Officer, Jim Crane commented, "We continue to see improved
performance in all geographic areas during a seasonally weak quarter. Our North
America operations have shown growth despite a weak economy and an uncertain
global environment. The modest improvements in North America gross revenues,
stable net revenue margins, and focus on costs have resulted in a significant
swing in profitability for North America compared to last year. Our overseas
operations are leveraging our North America network and continue to add
revenues. Pricing pressures resulting from our customers' focus on costs and
higher surcharges levied by airlines and shipping lines are putting pressure on
our net revenue
###
margins. During the quarter, we ramped up production of two major logistics
projects in Europe that came with some start-up challenges, resulting in after
tax losses of $2.0 million on these projects. We have a management team focused
on getting these projects profitable."
North America gross revenues of $252 million increased 4% as the deferred
shipment volumes continued to grow (up 24% over Q1-2002). Net revenue margins of
42.3% were down only slightly from 42.5% last year. The realignment of the
dedicated domestic air network and improved utilization of the U.S.
infrastructure from the growing deferred ground business contributed toward an
improvement in profitability in North America. Net revenues increased $3.6
million from last year while operating income improved $5.6 million - from an
operating loss last year of $5.3 million to an operating income in Q1-2003 of
$327,000.
Gross revenues outside of North America increased 33% to $231 million, as
Europe/Middle East/Africa, Asia/Pacific and Latin America all reported gross
revenue increases over last year exceeding 30%. Net revenue margins were down
from 29.3% last year to 26.3% in the first quarter of this year reflecting
pricing pressures on both the air and ocean markets and a change in the mix in
the ocean business from direct (down 12%) to consolidations (up 16%). Net
revenues were up 19% over last year. Operating income outside North America was
down from $6.8 million to $4.3 million as a result of start-up losses incurred
on two logistics projects in Europe. These projects started during December 2002
and ramped up in the first quarter of 2003 with additional staffing required to
meet production targets. Operating losses from the two projects were $3.2
million ($2.0 million after tax or $0.04 per diluted share). Without such
losses, operating income for the first quarter of 2003 would have been $7.9
million compared to $1.5 million in the same quarter last year.
Operating income improved by $3.1 million to $4.6 million. Operating expenses
increased 5% over last year (excluding a $2.5 million benefit from temporary
salary reductions in the first quarter of 2002) and compares to a 9% increase in
net revenues. The rate of growth of expenses to net revenues of 58% was slightly
above EGL's goal of 50% as a result of the staffing required on the
aforementioned logistics projects.
Net income of $2.8 million improved by $6.7 million over last year's loss of
$3.9 million (which included a $4.5 million after tax, or $0.09 per diluted
share, charge for an investment write-off and a $1.5 million after tax, or $0.03
per diluted share, benefit from temporary salary reductions). Diluted earnings
per share of $0.06 compares to a loss last year of $0.08 per share.
SECOND QUARTER AND TOTAL YEAR 2003
EGL expects second quarter 2003 diluted earnings per share of between
$0.10-$0.14, compared to $0.02 in the same quarter last year. For the year 2003,
EGL expects diluted earnings per share of between $0.65 to $0.75, compared to
$0.20 per diluted share in 2002.
EARNINGS CONFERENCE CALL
EGL, Inc. plans to host a conference call for shareholders and the investing
community on May 13, 2003 at 11 a.m. Eastern time (8 a.m. Pacific) to review
results for the quarter ended March 31, 2003. The call can be accessed by
dialing (913) 981-5508, access code 768463 and is expected to last approximately
60 minutes. Callers are requested to dial in at least 5 minutes before the start
of the call. The call will also be available through live webcast on the
company's website, www.eaglegl.com, on the Investor Relations page. An audio
replay will be available until Tuesday, May 27, 2003 at (719) 457-0820, access
code 768463.
First quarter 2003 product and geographic data and air freight statistics are
available on EGL's website, www.eaglegl.com on the Investor Relations page.
-------------------
-more-
Houston-based EGL, Inc. operates under the name EGL Eagle Global Logistics. EGL
is a leading global transportation, supply chain management and information
services company dedicated to providing superior flexibility and fewer shipping
restrictions on a price competitive basis. With 2002 revenues exceeding $1.87
billion, EGL's services include air and ocean freight forwarding, customs
brokerage, local pickup and delivery service, materials management, warehousing,
trade facilitation and procurement, and integrated logistics and supply chain
management services. The Company's shares are traded on the NASDAQ National
Market under the symbol "EAGL".
-------------------
CAUTIONARY STATEMENTS
The statements in this press release (and statements in the conference call
referred to above) regarding projected profitability and timing of profitability
on logistics projects in Europe, second quarter and total year results, and
other statements which are not historical facts, are forward looking statements.
Such statements involve risks and uncertainties and other factors detailed in
the Company's 2002 Form 10-K, proxy statement/prospectus and other filings with
the Securities and Exchange Commission. Should one or more of these risks or
uncertainties materialize (or the consequences of such a development worsen), or
should underlying assumptions prove incorrect, actual outcomes may vary
materially from those forecasted or expected. The Company disclaims any
intention or obligation to update publicly or revise such statements, whether as
a result of new information, future events or otherwise.
EGL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)
<Table>
<Caption>
THREE MONTHS ENDED
MARCH 31,
---------- ----------
2003 2002
---------- ----------
Revenues $ 483,650 $ 417,109
Cost of transportation 316,084 262,989
---------- ----------
Net revenues 167,566 154,120
Operating expenses:
Personnel costs 96,815 85,360
Other selling, general and administrative expenses 66,113 67,224
---------- ----------
Operating income 4,638 1,536
Nonoperating expense, net (142) (8,306)
---------- ----------
Income (loss) before provision (benefit) for income taxes 4,496 (6,770)
Provision (benefit) for income taxes 1,701 (2,640)
---------- ----------
Income (loss) before cumulative effect of change
in accounting for negative goodwill 2,795 (4,130)
Cumulative effect of change in
accounting for negative goodwill -- 213
---------- ----------
Net income (loss) $ 2,795 $ (3,917)
========== ==========
Basic earnings (loss) per share $ 0.06 $ (0.08)
Diluted earnings (loss) per share $ 0.06 $ (0.08)
Basic weighted-average common
shares outstanding 47,066 47,859
Diluted weighted-average common
shares outstanding 47,277 47,859
</Table>
CERTAIN 2002 AMOUNTS HAVE BEEN RECLASSIFIED TO CONFORM TO THE 2003 PRESENTATION
EGL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
<Table>
<Caption>
MARCH 31, DECEMBER 31,
2003 2002
---------- --------------
ASSETS
Current assets:
Cash, cash equivalents, restricted cash
and short-term investments $ 123,240 $ 127,487
Trade accounts receivable, net of allowance 384,484 371,024
Other current assets 52,718 53,412
---------- --------------
Total current assets 560,442 551,923
Property and equipment, net 154,174 157,403
Assets held for sale 644 644
Investments in unconsolidated affiliates 40,046 40,042
Goodwill, net 82,249 81,881
Other assets, net 19,019 18,414
---------- --------------
Total assets $ 856,574 $ 850,307
========== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term notes payable $ 5,419 $ 5,639
Trade payables and accrued transportation costs 236,285 232,324
Accrued expenses 38,714 39,445
Other liabilities 64,195 73,004
---------- --------------
Total current liabilities 344,613 350,412
Long-term notes payable 104,845 103,993
Other noncurrent liabilities 5,811 3,720
Deferred income taxes 12,164 6,789
Minority interest 9,169 8,852
Stockholders' equity 379,972 376,541
---------- --------------
Total liabilities and stockholders' equity $ 856,574 $ 850,307
========== ==============
</Table>
EGL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
<Table>
<Caption>
THREE MONTHS ENDED
MARCH 31,
--------------------------
2003 2002
----------- -----------
Cash flows from operating activities:
Net income (loss) $ 2,795 $ (3,917)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 7,729 7,479
Bad debt expense 1,753 3,171
Amortization of unearned compensation -- 159
Deferred income tax expense (benefit) 1,614 (2,745)
Tax benefit of stock options exercised 75 58
Equity in earnings of affiliates, net of dividends received (4) (669)
Minority interests, net of dividends paid 263 319
Transfer to restricted cash (7,182) (109)
Cumulative effect of change in accounting for negative
goodwill -- (213)
Impairment of investment in an unconsolidated affiliate -- 6,653
Other (360) 73
Net effect of changes in working capital, net of assets acquired (12,075) 21,592
----------- -----------
Net cash provided by (used in) operating activities (5,392) 31,851
----------- -----------
Cash flows from investing activities:
Capital expenditures (4,313) (3,705)
Proceeds from sales of other assets 324 2,820
Proceeds from sale-lease back transactions, net -- 2,462
Acquisitions of businesses, net of cash acquired (1,733) --
----------- -----------
Net cash provided by (used in) investing activities (5,722) 1,577
----------- -----------
Cash flows from financing activities:
Issuance (repayment) of notes payable, net 321 (2,551)
Issuance of common stock for employee stock purchase plan -- 469
Proceeds from exercise of stock options 598 146
----------- -----------
Net cash provided by (used in) financing activities 919 (1,936)
----------- -----------
Effect of exchange rate changes on cash (1,227) (1,911)
----------- -----------
Increase (decrease) in cash and cash equivalents (11,422) 29,581
Cash and cash equivalents, beginning of the period 119,669 77,440
----------- -----------
Cash and cash equivalents, end of the period $ 108,247 $ 107,021
=========== ===========
</Table>
FIRST QUARTER 2003 PRODUCT AND GEOGRAPHIC DATA AND AIR FREIGHT STATISTICS ARE
AVAILABLE ON EGL'S WEBSITE, WWW.EAGLEGL.COM ON THE INVESTOR RELATIONS PAGE.