Air Express: Earnings News Release For more information, please contact: Jay Jacobson, Investor Relations (203) 655-6978 AIR EXPRESS INTERNATIONAL (AEI) REPORTS FIRST QUARTER 1999 RESULTS DARIEN, CT, May 7, 1999 -- Air Express International Corporation(AEI) (Nasdaq-NMS:AEIC) today announced results for the first quarter ended March 31, 1999. AEI reported net income for the first quarter of $13,624,000, or $.40 per diluted share, which included a gain on the sale of marketable securities of $4,908,000, or $.14 per diluted share. The gain was previously announced by the Company on February 26, 1999. Excluding the above-mentioned gain, first quarter net income was $8,716,000, or $.26 per diluted share, compared to first quarter 1998 net income of $9,730,000, or $.28 per diluted share, declines of 10 percent and seven percent, respectively. Gross revenues for the first quarter were $354,684,000, a decline of five percent from the 1998 first quarter gross revenues of $372,376,000. The lower gross revenues were attributable entirely to airfreight revenues, which declined eight percent to $268,276,000 on generally weaker demand for air exports, particularly during January and February. Ocean freight revenues increased 14 percent to $49,252,000 on improved volumes in Asia and the United States. Customs brokerage and other gross revenues were approximately the same as the first quarter of last year. Net revenues increased two percent to $120,378,000 in the first quarter due to increases in airfreight and ocean freight, which improved two percent and 24 percent, respectively, over the first quarter of a year ago. The increase in airfreight net revenues is attributable to both improvements in the mix and routing of cargo and in the cost of transportation. The increase in ocean freight net revenues resulted from higher levels of shipping activity and lower ocean freight costs in selected markets. Customs brokerage and other net revenues decreased six percent to $28,983,000. Net revenues from customs brokerage alone were about equal to the first quarter of last year, while warehousing and distribution declined largely due to reduced activity and selling rates in several markets. The operating profit of European operations suffered significant declines in the quarter, which were partially offset by improved results in the United States and Asia. This resulted in total operating profit for the first quarter decreasing 10 percent to $11,904,000. Guenter Rohrmann, AEI's President and Chief Executive Officer, commented, "We experienced significant softness in our airfreight business during the first two months of the quarter. However, we are pleased to report that volumes increased in March in most countries, including a robust demand in the Asian markets during the last two weeks of the quarter. We anticipate continued improvement in our airfreight business as the yearprogresses." Headquartered in Darien, CT, AEI is a world leader in integrated logistics services, delivering multi-modal transportation, warehousing and distribution, customs brokerage and information management solutions across a network of 705 locations in more than 135 countries. -0- This press release contains forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to vary materially from those anticipated; among these are the Company's dependence upon conditions in the air and ocean freight forwarding industry, the size and resources of many of the Company's competitors and the need for the Company to continue to effectively integrate acquired businesses and successfully deliver its primary services. Additional information with respect to these and other factors which could materially affect the Company is included in the Company's filings with the Securities and Exchange Commission, including its most recent proxy statement and 10-K. Air Express International CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In thousands, except per share data) For the Quarter Ended March 31, 1999 1998 -------- -------- Gross Revenues: Airfreight $268,276 $291,530 Ocean freight 49,252 43,155 Customs brokerage and other 37,156 37,691 -------- -------- Total Gross Revenues $354,684 $372,376 Net Revenues: Airfreight 75,968 74,582 Ocean freight 15,427 12,477 Customs brokerage and other 28,983 30,794 -------- -------- Total Net Revenues 120,378 117,853 Operating Expenses: Terminal 69,520 67,126 Selling, general and administrative 38,954 37,571 -------- -------- OPERATING PROFIT 11,904 13,156 Interest income, net 76 357 Other, net 9,645 2,055 -------- -------- INCOME BEFORE TAXES 21,625 15,568 Provision for income taxes 8,001 5,838 -------- -------- NET INCOME $ 13,624 $ 9,730 ======== ======== EARNINGS PER SHARE: Basic $ .40 $ .28 ======== ======== Diluted $ .40 $ .28 ======== ======== Weighted average number of common shares (000): Basic 33,690 34,639 Diluted 33,892 35,381 Air Express International CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) Mar. 31, Dec. 31, 1999 1998 -------- -------- (Unaudited) Assets Current assets: Cash and cash equivalents $ 63,312 $ 60,246 Accounts receivable, net 356,859 366,417 Prepaid expenses and other current assets 4,961 14,284 -------- -------- Total current assets 425,132 440,947 Property and equipment, net 82,713 81,178 Other noncurrent assets 48,086 45,570 Goodwill 104,593 107,783 -------- -------- Total Assets $660,524 $675,478 ======== ======== Liabilities and Stockholders' Investment Current liabilities: Current portion of long-term debt $ 4,044 $ 4,337 Other current liabilities 304,023 307,642 -------- -------- Total current liabilities 308,067 311,979 Long-term debt 41,672 42,578 Other liabilities 6,906 10,050 -------- -------- Total liabilities 356,645 364,607 Stockholders' investment 303,879 310,871 -------- -------- Total Liabilities and Stockholders' Investment $660,524 $675,478 ======== ======== Ends.