Circle International Group, Inc. Reports Second Quarter Results; Q2 Net Revenues Increase 12 Percent Over Q2 1998.SAN FRANCISCO--(BUSINESS WIRE)--July 29, 1999-- Strategic Initiatives to Increase Sales and Improve Technology Resources Continue Circle International Group, Inc. today reported net income for the second quarter ended June June: see month. 30 of $4.8 million, or $.28 per share. The results include a net gain of $.03 per share from the sale of a perishables perishables npl → productos mpl perecederos perishables npl → denrées fpl périssables perishables perish npl distribution business in New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. . Net income for the second quarter included after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. expenses of $1.9 million or $.11 per share related to Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 , $200,000 or $.01 per share for Information Technology (IT) upgrades, and $1.0 million or $.06 per share for sales expansion. Income from operations in the quarter was $5.8 million, including the impact of the Y2K, IT upgrade and sales expansion expenses, which totaled $4.8 million in the quarter. Revenues for the second quarter were $195.2 million, up 12 percent compared to 1998 second quarter revenues of $174.8 million. Net revenues, which represent revenues less purchased transportation costs, rose to $81.5 million from $73.0 million in the previous year's quarter, an increase of 12 percent. David I David I, king of Scotland David I, 1084–1153, king of Scotland (1124–53), youngest son of Malcolm III and St. Margaret of Scotland. During the reign of his brother Alexander I, whom he succeeded, David was earl of Cumbria, ruling S of the Clyde . Beatson, Circle's chairman, president 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. , noted that implementation of the company's strategic initiatives for growth continued to gain momentum. "Our expanded sales force is deployed and we are fine-tuning In theoretical physics, fine-tuning refers to circumstances when the parameters of a model must be adjusted very precisely in order to agree with observations. Theories requiring fine-tuning are regarded as problematic in the absence of a known mechanism to explain why the the organization while increasing customer contact and new business development opportunities," he noted. "Planned technology investments have made substantial headway head·way n. 1. Forward movement or the rate of forward movement, especially of a ship. 2. Progress toward a goal. 3. The clear vertical space beneath a ceiling or archway; clearance. 4. upgrading Circle's IT resources, improving customer connectivity A generic term for connecting devices to each other in order to transfer data back and forth. It often refers to network connections, which embraces bridges, routers, switches and gateways as well as backbone networks. , and executing our Year 2000 plans," he noted. "Our progress over the first half of the year is commendable com·mend tr.v. com·mend·ed, com·mend·ing, com·mends 1. To represent as worthy, qualified, or desirable; recommend. 2. To express approval of; praise. See Synonyms at praise. 3. ," Beatson said. "Our employees and customers have responded positively to Circle's renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. focus on the customer and proactive sales efforts, while our IT programs continue to achieve their benchmarks." He added that the level of Circle's Y2K expense incurred in the first and second quarters is expected to decline in the second half of the year, as Y2K efforts shift to completion of contingency contingency n. an event that might not occur. planning with customers and business partners. Overall, the company continues to maintain rigorous expense control with a focus on providing effective resources for quality service. Beatson was pleased to report that each of the company's strategic initiatives are "achieving expectations as planned," citing progress in the following areas: -0-
-- Sales Development -- With Circle's expanded sales team in place,
corporate-level bid volume continued at a rate more than double
that for the first half of 1998. Concurrent with the sales force
expansion and training, a structured sales administration and
management program was deployed to provide ongoing direction and
coordination. Among new business awards recently announced were
3Com, Amdahl and Konka USA. Major global wins from two high-tech
companies also were awarded in the past month, with
implementation planned for the 4th quarter.
-- Information Technology Upgrades -- The first customer Extranet
applications, offering clients customized Web-based tools for EDI
transmission of purchase order and shipment status information,
went into production. Circle's new document imaging system,
providing workflow improvements and giving customers Internet
access to key shipping and customs documents, successfully
completed pilot testing and is scheduled for rollout in the third
quarter. Installation of new warehouse/distribution system
software, for managing of a client's supplier order processing
and product inventory, was expanded to several U.S. vendor hub
locations. System software upgrades to operations and accounting
applications supporting Circle's introduction of domestic North
America freight service were completed.
-- Year 2000 -- Global "end-to-end" enterprise-wide business process
testing is on schedule. An independent test environment
replicating post-Year 2000 operations was established for mission
critical business processes. Testing of Circle internal systems
and business partner links within this environment has begun. The
company continues to participate in business contingency planning
with customers, and has received positive feedback on preparation
efforts, with several major customers ranking Circle's planning
as superior.
-0- In the second quarter, North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. net revenues increased 3 percent and were impacted by continued soft export traffic to Asia and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). net revenues grew by 35 percent, driven by strong exports and last year's acquisition of Singapore-based Concord Concord, cities, United States Concord (kŏng`kərd, kŏn`kôrd'). 1 city (1990 pop. 111,348), Contra Costa co., W central Calif.; settled c.1852, inc. 1906. International. Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). achieved net revenue growth of 12 percent
based on firming exports and revenues gained from the Tytherleigh Tytherleigh is a village in East Devon close to the border with Somerset on the A358 road between the towns of Axminster and Chard.The Tytherleigh Arms public house in the village displays the Tytherleigh family coat of arms on its sign. acquisition last year. Latin America net revenue was flat compared to the previous year quarter as this region continues to face difficult economic conditions. Circle's automotive logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. TDS TDS total dissolved solids. improved over the 1999 first quarter, returning profits in the second quarter to levels near that of the 1998 second quarter. Interest income, net, for the 1999 second quarter was lower than the same period last year, due to lower cash levels from acquisition activity. Impact from foreign exchange transaction gains was minimal. For the six months ended June 30, 1999, net income was $6.7 million, or $.39 per share, down from $13.3 million, or $.77 per share in the comparable period last year. Net income for the six months ended June 30, 1999 was negatively impacted by the same factors that affected net income in the 1999 second quarter. Revenue for the period was up 11 percent to $378.1 million, compared to six-month revenues of $340.2 million in the comparable period of 1998. Net revenues increased 11 percent to $157.6 million, compared with $141.6 million in the first six months of last year. "We will continue to work diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d throughout the rest of the year to complete implementation of our growth plan, and our initiatives to improve efficiency and increase productivity," Beatson said. "We've we've Contraction of we have. we've have made substantial investments in Circle in a short period of time which are positioning the company to compete effectively, respond proactively to our customers and build the proper foundation for growth going forward. We're we're Contraction of we are. we're we are seeing the first indications of success, and I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in confident that as we complete this transition year and move into 2000 our momentum will continue and accelerate." San Francisco-based 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 ) celebrated its 100th anniversary in 1998. Today, with over $750 million in sales annually, 4,500 employees, and 323 offices in more than 100 countries, Circle provides worldwide transportation and logistics services that include air and ocean freight The price or compensation paid for the transportation of goods by a carrier. Freight is also applied to the goods transported by such carriers. The liability of a carrier for freight damaged, lost, or destroyed during shipment is determined by contract, statute, or 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, , trade procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. , warehousing and inventory management, and global supply chain management services. 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, challenges associated with the Year 2000 issue, the effect of the Company's accounting policies, and other risk factors detailed in the Company's SEC filings. Additional news releases and information about Circle International Group, its affiliates and worldwide operations can be found on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at the Circle web site, www.circleintl.com -0-
CIRCLE INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED OPERATING DATA
(unaudited, in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
Revenue $195,215 $174,760 $378,068 $340,172
Freight consolidation
costs 113,764 101,755 220,451 198,594
-------- -------- -------- --------
Net revenue 81,451 73,005 157,617 141,578
Other costs and expenses:
Salaries and related 42,516 36,949 84,773 74,504
Operating, selling and
administrative 33,172 26,674 64,832 51,296
-------- -------- -------- --------
Total other costs and
expenses 75,688 63,623 149,605 125,800
-------- -------- -------- --------
Income from operations 5,763 9,382 8,012 15,778
Other income:
Interest income, net 98 1,165 173 1,838
Income from affiliates,
net 1,202 1,244 1,706 2,542
Other, net 528 469 652 821
-------- -------- -------- --------
Total other income, net 1,828 2,878 2,531 5,201
-------- -------- -------- --------
Income before taxes 7,591 12,260 10,543 20,979
Taxes on income 2,771 4,403 3,848 7,677
-------- -------- -------- --------
Net income $ 4,820 $ 7,857 $ 6,695 $ 13,302
======== ======== ======== ========
Net income per share -
diluted $ 0.28 $ 0.45 $ 0.39 $ 0.77
======== ======== ======== ========
Weighted average common
shares outstanding -
diluted 17,269 17,383 17,218 17,353
======== ======== ======== ========
CIRCLE INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
PRODUCT AND GEOGRAPHIC SEGMENT INFORMATION
(unaudited, in thousands)
Three Months Ended
June 30,
1999 1998
Revenue
Air freight forwarding $ 125,829 64% $ 113,757 65%
Ocean freight forwarding 32,009 17% 25,948 15%
Customs brokerage and other 37,377 19% 35,055 20%
----------------- -----------------
Total $ 195,215 100% 174,760 100%
================= =================
Net Revenue
Air freight forwarding 31,980 39% 28,439 39%
Ocean freight forwarding 12,094 15% 9,511 13%
Customs brokerage and other 37,377 46% 35,055 48%
----------------- -----------------
Total $ 81,451 100% $ 73,005 100%
================= =================
Six Months Ended
June 30,
1999 1998
Revenue
Air freight forwarding $ 245,046 65% $ 221,292 65%
Ocean freight forwarding 59,404 16% 50,473 15%
Customs brokerage and other 73,618 19% 68,407 20%
----------------- -----------------
Total $ 378,068 100% $ 340,172 100%
================= =================
Net Revenue
Air freight forwarding $ 61,615 39% $ 54,749 39%
Ocean freight forwarding 22,384 14% 18,422 13%
Customs brokerage and other 73,618 47% 68,407 48%
----------------- -----------------
Total $ 157,617 100% $ 141,578 100%
================= =================
Three Months Ended
June 30,
1999 1998
Revenue
Americas $ 88,190 45% $ 94,851 54%
Europe & Middle East 45,239 23% 38,677 22%
Asia & South Pacific 61,786 32% 41,232 24%
----------------- -----------------
Total $ 195,215 100% $ 174,760 100%
================= =================
Net Revenue
Americas $ 41,646 51% $ 40,126 55%
Europe & Middle East 21,989 27% 19,718 27%
Asia & South Pacific 17,816 22% 13,161 18%
----------------- -----------------
Total $ 81,451 100% $ 73,005 100%
================= =================
Six Months Ended
June 30,
1999 1998
Revenue
Americas $ 177,235 47% $ 189,481 56%
Europe & Middle East 85,258 22% 73,369 21%
Asia & South Pacific 115,575 31% 77,322 23%
----------------- -----------------
Total $ 378,068 100% $ 340,172 100%
================= =================
Net Revenue
Americas $ 80,738 51% $ 79,123 56%
Europe & Middle East 42,435 27% 37,704 27%
Asia & South Pacific 34,444 22% 24,751 17%
----------------- -----------------
Total $ 157,617 100% $ 141,578 100%
================= =================
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