EXHIBIT 99.1
(EAGLE GLOBAL LOGISTICS LETTERHEAD)
NEWS RELEASE
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FOR IMMEDIATE RELEASE
TUESDAY, AUGUST 12, 2003
EGL, INC. ANNOUNCES 16% GROWTH IN
GROSS REVENUES AND DILUTED EPS OF $0.14
HOUSTON, AUGUST 12, 2003 - EGL, INC. (NASDAQ: EAGL) announced that it earned
$6.5 million of net income for the three months ended June 30, 2003, compared to
$938,000 in the second quarter of 2002. Diluted earnings per share for the
quarter were $0.14 compared to diluted earnings per share of $0.02 in Q2-2002
and $0.06 in Q1-2003.
FINANCIAL HIGHLIGHTS
o Gross revenues improved on strong air and ocean volumes outside North
America and continued growth of North America ground activity.
o Net revenues increased 14% particularly on stronger margins in North
America.
o Operating income margin improved to 6.6% as compared to 2.9% for the
second quarter of 2002 with North America rebounding from an operating
loss in the second quarter of 2002 to an operating income margin of
4.4% for the second quarter of 2003.
<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
$ thousands (except EPS) 6/30/03 6/30/02 6/30/03 6/30/02
------------ ------------ ------------ ------------
Gross revenues $ 526,863 $ 454,919 $ 1,010,513 $ 872,028
% change + 16% + 16%
Net revenues $ 185,530 $ 163,155 $ 353,096 $ 317,275
% change + 14% + 11%
Net revenue margin 35.2% 35.9% 34.9% 36.4%
Operating expenses $ 173,319 $ 158,430 $ 336,247 $ 311,014
Operating income $ 12,211 $ 4,725 $ 16,849 $ 6,261
Net income/(loss) $ 6,467 $ 938 $ 9,262 $ (2,979)
Diluted EPS $ 0.14 $ 0.02 $ 0.20 $ (0.06)
</Table>
Gross revenues increased 16% from the second quarter of 2002 to $527 million
with all products showing increases, especially ocean revenues (up 36% over the
same quarter of last year) and increased North America ground volumes (deferred
shipment counts up 18%). Net revenue margins of 35.2% were down slightly as
deteriorations in ocean margins were only partially offset by higher margins in
North America reflecting improved utilization of the air and ground networks.
EGL Chief Executive Officer, Jim Crane, commented, "We continue to see
consistent steady progress despite a soft global economy. The 14% net revenue
growth, as compared to the second quarter GDP of 2.4%, reflects our ability to
leverage our product offerings and global infrastructure to outperform the
economy. We expect our continued emphasis on Asia and the Middle East to add to
our growth. The
###
United States operations continue to improve on growth of the deferred product
and account penetration through logistics offerings. We were able to close
several contracts in the energy sector and secure select project movements as we
diversify our customer base. In addition, we continue to focus on internal
efficiencies to improve operating margins. In the United States, we launched our
new human resources and accounting systems in the second quarter. We are
combining these systems with improved operating practices to increase personnel
efficiencies."
North America gross revenues of $273 million increased 6%, while net revenues
improved 11%, as the deferred shipment volumes continued to grow. The North
America net revenue margin of 43.7% improved from 41.7% last year reflecting
better utilization of our ground network and growth of the logistics business.
The elimination of the dedicated air network last year allowed EGL to adjust
quickly on the continued shift by our customers away from priority to deferred
shipments. Operating income in North America increased $7.8 million from last
year compared to $12.2 million increase in net revenues - an incremental profit
of 64% from the additional net revenues. The operating leverage reflects better
utilization of the North America ground and facilities network.
Gross revenues outside of North America increased 28% to $254 million. Net
revenues increased 18% to $66 million reflecting strong growth in Europe and the
Middle East. The net revenue margins were down from 28.3% last year to 26.1% in
the second quarter of this year reflecting continued pricing pressures on the
air and ocean markets. Operating income outside North America was down from $7.3
million in the second quarter of 2002 to $6.9 million in the second quarter of
this year as a result of operating losses on two logistics projects in Europe.
The performance on these projects improved significantly during the quarter so
that by June the projects were operating near break-even levels. Operating
income as a percent of net revenue was 10.4%, compared to 13.0% in the second
quarter of last year - operating margins in Asia and South Pacific improved to
21.7% compared to 20.4% last year, South America improved to 14.6% from 4.0%
last year while Europe, Africa, India and Middle East were down to 3.0% from
9.0% last year on the aforementioned logistics projects.
Operating income improved by $7.5 million to $12.2 million for the second
quarter of 2003. Net income of $6.5 million for this quarter improved by $5.5
million from the second quarter of last year.
THIRD QUARTER AND TOTAL YEAR 2003
EGL expects third quarter 2003 diluted earnings per share of between
$0.18-$0.20, compared to $0.12 in the same quarter last year. For the year 2003,
EGL expects diluted earnings per share between $0.65 - $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 August 12, 2003 at 11 a.m. Eastern time (8 a.m. Pacific) to review
results for the quarter ended June 30, 2003. The call can be accessed by dialing
(719) 457-2633, access code 497225 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, August 26, 2003 at (719) 457-0820, access code
497225.
Second quarter 2003 product and geographic data and air freight statistics are
available on EGL's website, www.eaglegl.com on the Investor Relations page.
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-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 $1.86
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".
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CAUTIONARY STATEMENTS
The statements in this press release (and statements in the conference call
referred to above) regarding projected profitability, adding to growth, improved
margins, increased efficiencies, and initiatives in Asia, Europe and the Middle
East, third quarter and total year results and diluted earnings per share, our
ability to outperform the economy and other statements which are not historical
facts, are forward looking statements. Such statements involve risks and
uncertainties including, but not limited to, general economic conditions, the
results of litigation, the timing and effects of any improvements in the regions
and industry sectors in which the Company's customers operate, construction of
new facilities and other infrastructure improvements, ability to manage and
continue growth, competition 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.
-more-
EGL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
Revenues $ 526,863 $ 454,919 $ 1,010,513 $ 872,028
Cost of transportation 341,333 291,764 657,417 554,753
------------ ------------ ------------ ------------
Net revenues 185,530 163,155 353,096 317,275
Operating expenses:
Personnel costs 104,758 90,177 201,573 175,537
Other selling, general and administrative expenses 68,561 68,253 134,674 135,477
------------ ------------ ------------ ------------
Operating income 12,211 4,725 16,849 6,261
Nonoperating expense, net (1,809) (3,188) (1,951) (11,494)
------------ ------------ ------------ ------------
Income (loss) before provision (benefit) for income taxes 10,402 1,537 14,898 (5,233)
Provision (benefit) for income taxes 3,935 599 5,636 (2,041)
------------ ------------ ------------ ------------
Income (loss) before cumulative effect of change
in accounting for negative goodwill 6,467 938 9,262 (3,192)
Cumulative effect of change in accounting
for negative goodwill -- -- -- 213
------------ ------------ ------------ ------------
Net income (loss) $ 6,467 $ 938 $ 9,262 $ (2,979)
============ ============ ============ ============
Basic earnings (loss) per share $ 0.14 $ 0.02 $ 0.20 $ (0.06)
Diluted earnings (loss) per share $ 0.14 $ 0.02 $ 0.20 $ (0.06)
Basic weighted-average common
shares outstanding 47,154 47,895 47,110 47,901
Diluted weighted-average common
shares outstanding 47,424 48,152 47,355 47,901
</Table>
EGL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
<Table>
<Caption>
JUNE 30, DECEMBER 31,
2003 2002
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ASSETS
Current assets:
Cash, cash equivalents, restricted cash
and short-term investments $ 93,636 $ 119,295
Trade accounts receivable, net of allowance 397,481 371,024
Other current assets 53,335 53,412
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Total current assets 544,452 543,731
Property and equipment, net 155,014 157,403
Assets held for sale 539 644
Investments in unconsolidated affiliates 40,147 40,042
Goodwill, net 93,790 81,881
Other assets, net 34,056 18,414
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Total assets $ 867,998 $ 842,115
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term notes payable $ 10,637 $ 5,639
Trade payables and accrued transportation costs 216,955 224,132
Accrued expenses 47,478 39,445
Other liabilities 65,511 73,004
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Total current liabilities 340,581 342,220
Long-term notes payable 109,667 103,993
Other noncurrent liabilities 5,835 6,789
Deferred income taxes 13,562 3,720
Minority interest 5,935 8,852
Stockholders' equity 392,418 376,541
----------- -----------
Total liabilities and stockholders' equity $ 867,998 $ 842,115
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</Table>
EGL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
------------------------------
2003 2002
------------- -------------
Cash flows from operating activities:
Net income (loss) $ 9,262 $ (2,979)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization 15,377 14,869
Bad debt expense 4,457 4,821
Amortization of unearned compensation -- 317
Deferred income tax expense (benefit) 2,808 (10,715)
Tax benefit of stock options exercised 200 134
Equity in earnings of affiliates, net of dividends received (105) (848)
Minority interests, net of dividends paid 636 606
Transfer to restricted cash (3,286) (1,185)
Cumulative effect of change in accounting for negative goodwill -- (213)
Impairment of investment in an unconsolidated affiliate -- 6,653
Other (114) 766
Net effect of changes in working capital, net of assets acquired (28,573) 34,537
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Net cash provided by operating activities 662 46,763
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Cash flows from investing activities:
Capital expenditures (10,832) (9,813)
Proceeds from sales of other assets 540 7,350
Proceeds from sale-lease back transactions 1,158 2,462
Acquisitions of businesses, net of cash acquired (21,084) --
Dividend paid to a minority interest partner (93) --
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Net cash used in investing activities (30,311) (1)
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Cash flows from financing activities:
Issuance (repayment) of notes payable 31 (1,528)
Issuance of common stock for employee stock purchase plan 272 779
Proceeds from exercise of stock options 1,247 330
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Net cash provided by (used in) financing activities 1,550 (419)
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Effect of exchange rate changes on cash (894) 970
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Increase (decrease) in cash and cash equivalents (28,993) 47,313
Cash and cash equivalents, beginning of the period 111,477 77,440
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Cash and cash equivalents, end of the period $ 82,484 $ 124,753
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</Table>
SECOND QUARTER 2003 PRODUCT AND GEOGRAPHIC DATA AND AIR FREIGHT
STATISTICS ARE AVAILABLE ON EGL'S WEBSITE, WWW.EAGLEGL.COM
ON THE INVESTOR RELATIONS PAGE.