Circle International Group, Inc. Reports Second Quarter Results, Net Income Increases 35 Percent Over 2Q 1999.Business Editors SAN FRANCISCO--(BUSINESS WIRE)--Aug. 3, 2000 Circle International Group, Inc. (Nasdaq:CRCL CRCL Creatinine Clearance CRCL Circle CRCL Coalition to Restore Coastal Louisiana CRCL Center for Research in Computational Linguistics CRCL Columbia River Conservation League ) today reported net income for the second quarter ended June June: see month. 30, 2000 of $6.5 million, an increase of 35 percent compared to 1999 second quarter net income of $4.8 million. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the second quarter of 2000 were $.37 as compared with $.28 for the same quarter in 1999. Income from operations for the second quarter was up 66 percent to $9.5 million compared to the second quarter of 1999 operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $5.7 million. Results benefited from the absence of Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 expenses. Revenues for the second quarter were $237.0 million, up 21 percent compared to 1999 second quarter revenues of $195.2 million. Net revenues, which represent revenues less purchased transportation costs, rose 12 percent to $91.1 million from $81.5 million in the previous year's second quarter. "The company achieved strong revenue growth across its principal services reflecting additional opportunities from outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. and globalization globalization Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation trends," commented Peter Gibert, interim chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Results from North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , our largest market, were particularly encouraging with net revenues up 11 percent and operating income increasing 24 percent." In both the Europe/Middle East and Asia/South Pacific regions, net revenues rose 13 percent over the second quarter of 1999. Net revenue margins for the second quarter of 2000 were lower than those in the previous year's quarter due to higher transportation costs from carrier rate increases. The company continued to assess a fuel surcharge An overcharge or additional cost. A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty. during the quarter, which helped recover some of the increased fuel costs from transportation providers. Total other income, net, for the second quarter of 2000 was lower than the same period last year due, in part, to Circle's Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan business unit being fully consolidated instead of being reported as an affiliate. Interest expense increased and interest income was lower in the second quarter of 2000 from higher capital expenditures and increased working capital demands. Last year, total other income for the second quarter benefited from a gain on the sale of a perishables perishables npl → productos mpl perecederos perishables npl → denrées fpl périssables perishables perish npl business. For the six months ended June 30, 2000, net income was $9.7 million, or $.55 per share, up from $6.7 million, or $.39 per share, in the comparable period of 1999. Operating income for the six-month period was $14.1 million, an increase of 77 percent compared to $8.0 million for the first six months of 1999. Half-year results benefited from the absence of Y2K expenses, but were adversely impacted by margin pressures. Revenue for the first half of 2000 was up 20 percent to $453.2 million, compared to six-month revenues of $378.1 million in the comparable period of 1999. Net revenues increased 12 percent to $175.8 million, compared with $157.6 million in the first six months of last year. On July July: see month. 3, 2000, Circle International Group, Inc. and EGL EGL Enterprise Generation Language (IBM) EGL European Gemological Laboratory EGL Elegant Gothic Lolita (Japanese fashion) EGL Energy Grade Line EGL Eagle Global Logistics, Inc. , Inc. (Nasdaq:EAGL EAGL East Atlantic Gymnastics League (College Park, MD) ) announced a strategic merger. The transaction will combine the domestically strong EGL with the internationally focused Circle, both of which are non-asset based freight forwarders An individual who, as a regular business, assembles and combines small shipments into one lot and takes the responsibility for the transportation of such property from the place of receipt to the place of destination. and logistics providers. The combination is expected to create a completely new paradigm New Paradigm In the investing world, a totally new way of doing things that has a huge effect on business. Notes: The word "paradigm" is defined as a pattern or model, and it has been used in science to refer to a theoretical framework. in the global logistics and transportation services marketplace. "We are most encouraged with our solid double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. growth, which demonstrates not only our progress securing additional business from existing clients, but also our continued success bringing new clients into Circle," noted Gibert. "Circle associates are doing a wonderful job focusing on the needs of our customers," he said. "As we proceed toward completing the merger with EGL this fall, we look ahead with excitement and enthusiasm to the next chapter of our long and proud history of delivering the highest quality service to our customers and increasing value to our shareholders." About Circle: Headquartered in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden , Circle International Group, Inc. (Nasdaq:CRCL) is a global logistics solutions company. Founded in 1898, Circle today has more than 4,900 employees, with over 300 offices in 100 countries. With annual revenues of over $800 million, Circle provides integrated services In computer networking, IntServ or integrated services is an architecture that specifies the elements to guarantee quality of service (QoS) on networks. IntServ can for example be used to allow video and sound to reach the receiver without interruption. including multi-modal See multimodal. air and ocean freight forwarding, customs brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. , materials management Materials management is the branch of logistics that deals with the tangible components of a supply chain. Specifically, this covers the acquisition of spare parts and replacements, quality control of purchasing and ordering such parts, and the standards involved in ordering, , warehousing, distribution and fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. , trade facilitation See also Trade Facilitation and Development. Trade facilitation looks at how procedures and controls governing the movement of goods across national borders can be improved to reduce associated cost burdens and maximise efficiency while safeguarding legitimate and procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. , and logistics and supply chain management. Additional news and information about Circle can be found at www.circleintl.com. Except for historical information contained herein, the matters set forth in this release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are dependent on certain risks and uncertainties, including, but not limited to, such factors as dependence on international trade and worldwide economic conditions, severe economic conditions in certain regions serviced by the Company, market demand, pricing risks associated with operations outside the U.S., currency fluctuations, competitive pressures, imbalances of capacity and demand in certain trade lanes and service areas, the Company's ability to integrate successfully businesses that it acquires, the increasing complexity of the Company's information technology, the effect of the Company's accounting policies, and other risk factors detailed in the Company's SEC filings. FORWARD LOOKING STATEMENT AND INVESTOR NOTICE The statements in this news release regarding the expected date of closing of the merger, future financial and operating results, target growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. , benefits of the merger, tax and accounting treatment of the merger, future opportunities and any other effect, result or aspect of the proposed transaction and any other statements, which are not historical facts, are forward looking statements. Such statements involve risks and uncertainties, including, but not limited to, costs and difficulties related to the integration of acquired businesses, costs, delays, and any other difficulties related to the merger, failure of the parties to satisfy closing conditions, risks and effects of legal and administrative proceedings An administrative proceeding is a non-judicial determination of fault or guilt and may include in some cases penalties of various forms. A "Captain's Mast", held by a commanding officer of a warship is one such proceeding. and governmental regulation, future financial and operational results, competition, general economic conditions, ability to manage and continue growth, risks of international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. and other factors detailed in EGL's and Circle's Forms 10-K and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. EGL has filed with the Securities and Exchange Commission ("SEC") a registration statement on Form S-4. In the connection with the merger, EGL and Circle expect to mail a joint proxy statement/prospectus, which will be part of the registration statement, to shareholders of EGL and Circle containing information about the merger. Shareholders of EGL and Circle are urged to read the joint proxy statement/prospectus included in the registration statements when it is filed and any other relevant documents filed with the SEC. The joint proxy statement/prospectus will contain important information about EGL, Circle, the merger, the persons soliciting proxies related to the merger, and related matters that should be considered by shareholders before making any decision regarding the merger and related transactions. Once they are filed with the SEC, the registration statement, joint proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. prospectus and other documents will be available free of charge on the SEC's web site at http://sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. and from the EGL and Circle contacts listed above. In addition to the registration statement and the joint proxy statement/prospectus, EGL and Circle file annual, quarterly and special reports, proxy statements and other information with the SEC that are also available free of charge at the SEC's web site and from EGL and Circle contacts listed above. In addition, the identity of the people who, under SEC rules, may be considered "participants in the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual " of EGL shareholders and Circle shareholders in connection with the proposed merger, and any description of their interests, is available in an SEC filing under Schedule 14A made by both EGL and Circle on July 3, 2000.
CIRCLE INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited, in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2000 1999 2000 1999
---- ---- ---- ----
Revenue $ 237,040 $ 195,215 $ 453,201 $ 378,068
Freight consolidation
costs 145,896 113,764 277,413 220,451
--------- --------- --------- ---------
Net revenue 91,144 81,451 175,788 157,617
Other costs and
expenses:
Salaries and related 47,720 42,516 95,584 84,773
Operating, selling
and administrative 33,964 33,246 66,116 64,867
--------- --------- --------- ---------
Total other costs and
expenses 81,684 75,762 161,700 149,640
--------- --------- --------- ---------
Income from operations 9,460 5,689 14,088 7,977
Other income (expense):
Interest income
(expense), net (405) 98 (667) 173
Income from
affiliates, net 758 1,202 1,144 1,706
Other, net 409 602 639 687
--------- --------- --------- ---------
Total other income,
net 762 1,902 1,116 2,566
--------- --------- --------- ---------
Income before taxes 10,222 7,591 15,204 10,543
Taxes on income 3,700 2,771 5,504 3,848
--------- --------- --------- ---------
Net income $ 6,522 $ 4,820 $ 9,700 $ 6,695
========= ========= ========= =========
Net income per
share -- diluted $ 0.37 $ 0.28 $ 0.55 $ 0.39
========= ========= ========= =========
Weighted average
common shares
outstanding -- diluted 17,790 17,269 17,741 17,218
========= ========= ========= =========
CIRCLE INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
PRODUCT AND GEOGRAPHIC SEGMENT INFORMATION
(unaudited, in thousands)
Three Months Ended
June 30,
2000 1999
---- ----
Revenue
Air freight forwarding $149,845 63% $125,829 64%
Ocean freight forwarding 42,172 18% 32,009 17%
Customs brokerage and other 45,023 19% 37,377 19%
-------- ------ -------- ------
Total $237,040 100% $195,215 100%
======== ====== ======== ======
Net Revenue
Air freight forwarding $ 33,543 37% $ 31,980 39%
Ocean freight forwarding 12,578 14% 12,094 15%
Customs brokerage and other 45,023 49% 37,377 46%
-------- ------ -------- ------
Total $ 91,144 100% $ 81,451 100%
======== ====== ======== ======
Six Months Ended
June 30,
2000 1999
---- ----
Revenue
Air freight forwarding $287,619 63% $245,046 65%
Ocean freight forwarding 79,628 18% 59,404 16%
Customs brokerage and other 85,954 19% 73,618 19%
-------- ------ -------- ------
Total $453,201 100% $378,068 100%
======== ====== ======== ======
Net Revenue
Air freight forwarding $ 65,623 37% $ 61,615 39%
Ocean freight forwarding 24,211 14% 22,384 14%
Customs brokerage and other 85,954 49% 73,618 47%
-------- ------ -------- ------
Total $175,788 100% $157,617 100%
======== ====== ======== ======
Three Months Ended
June 30,
2000 1999
---- ----
Revenue
Americas $ 94,581 40% $ 88,190 45%
Europe & Middle East 51,424 22% 44,083 23%
Asia & South Pacific 91,035 38% 62,942 32%
-------- ------ -------- ------
Total $237,040 100% $195,215 100%
======== ====== ======== ======
Net Revenue
Americas $ 46,024 50% $ 41,646 51%
Europe & Middle East 24,333 27% 21,457 26%
Asia & South Pacific 20,787 23% 18,348 23%
-------- ------ -------- ------
Total $ 91,144 100% $ 81,451 100%
======== ====== ======== ======
Six Months Ended
June 30,
2000 1999
---- ----
Revenue
Americas $184,457 41% $177,235 47%
Europe & Middle East 98,242 22% 83,613 22%
Asia & South Pacific 170,502 37% 117,220 31%
-------- ------ -------- ------
Total $453,201 100% $378,068 100%
======== ====== ======== ======
Net Revenue
Americas $ 89,619 51% $ 80,738 51%
Europe & Middle East 46,632 27% 41,414 26%
Asia & South Pacific 39,537 22% 35,465 23%
-------- ------ -------- ------
Total $175,788 100% $157,617 100%
======== ====== ======== ======
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