EGL REBOUNDS WITH PROFIT IN 2002
EGL Eagle Global Logistics Inc. reported a big turnaround in its fortunes last year with net income of $9.4 million compared to a loss of $40.2 million in 2001. For the three months ended Dec. 31 net income was $6.7 million vs. $821,000 in the fourth quarter of 2001.
The full-year results include after tax charges of $4.5 million to write off EGL’s investment in Miami Air and $3.5 million of restructuring related charges on abandoned facilities. These were partially offset by $5.4 million after tax proceeds from a U.S. government program to help support air transportation companies that lost business in the wake of the Sept. 11, 2001 terrorist attacks.
Operating income for the quarter increased $8.2 million, to $11.7 million, boosted by a $16-million improvement in net revenues and continuing cost cutting measures, Houston-based EGL said.
Gross revenues for 2002 were $1.7 billion, up $8.3 million from 2001. Net revenues were $672 million, an increase of $27.9 million, or 4.3 percent, over 2001 as EGL was able to restructure its domestic air network and gain operating efficiency.
Gross revenues improved 14 percent from the fourth quarter of 2001 to $485.8 million. As a result of the U.S. West Coast port strike, EGL chartered 42 dedicated planes to move product from Asia to North America. Net revenues of $183.5 million were up 10 percent over the comparable quarter in 2001. Stronger air export, brokerage and logistics activity was partially offset by tighter ocean export profits. Net revenue margins for 2002 were 40 percent compared to 38.5 percent in the prior year.
Air-freight gross revenues were up 12 percent for the fourth quarter to $376.7 million on stronger Asia and North America activity. Air-freight net revenues increased 10 percent to $112.9 million while net revenue margins were 30.0 percent compared to 30.7 percent last year. Brokerage and logistics revenues were up 16 percent from the fourth quarter of last year. Ocean gross revenues for the fourth quarter were up 30 percent from a year ago while net revenues were down 9 percent due to capacity constraints resulting from the U.S. West Coast port strike and a shift in activity from direct to consolidations which carry lower margins.
Based on expectations of a stable economy and environment, EGL expects first quarter gross revenues to range from $435 to $445 million — a projected growth of 17 percent to 20 percent over the first quarter of 2002. However, rising oil prices and a potential Middle East war hold the possibility of an economic downturn that could prevent EGL from meeting it’s forecast.
Diluted earnings per share are anticipated to be 4 cents to 6 cents, compared to a loss in the quarter last year of 8 cents per diluted share. For full year 2003, EGL expects diluted earnings per share of 65 cents to 75 cents with gross revenues for the year rising about 10 percent to $1.85 billion.