Fritz Companies Announces Results for Fiscal First Quarter; Re-Engineering Efforts in the U.S. Dampen Revenue Growth.Business and Transportation Editors SAN FRANCISCO--(BUSINESS WIRE)--Sept. 29, 2000 Fritz fritz n. Informal A condition in which something does not work properly: Our television is on the fritz. [Perhaps from German Fritz Companies, Inc. (Nasdaq:FRTZ) today announced 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 of 16 cents for its fiscal first quarter which ended August 31, 2000. The company earned 16 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. in the same quarter last year. On a consolidated basis, net revenues (which represent revenues less direct transportation costs) of $153.1 million were 1.6 percent higher than last year, while revenues were $412.9 million, a 5.4 percent increase from the prior year. The net revenue performance during the quarter varied considerably across the different regions of the world. In the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , the termination of six unprofitable, cash-negative accounts and the transition to a centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. environment for customs brokerage contributed to a net revenue decline of 3.0 percent compared to the prior year period. By contrast, on a constant exchange rate basis, Asia recorded net revenue growth of 16.9 percent, Australia grew by 14.0 percent, Europe grew by 9.3 percent 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. saw growth of 8.6 percent. Salary and related expenses of $87.2 million reflected a less than 1 percent increase compared to last year. General and administrative expenses increased 3.7 percent to $55.5 million. 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. for the quarter fell by 2.7 percent to $10.4 million, and net income declined by 2.2 percent to $5.8 million. Three key initiatives deserve special comment this quarter: Customs Brokerage: The centralization cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. of transaction processing Updating the appropriate database records as soon as a transaction (order, payment, etc.) is entered into the computer. It may also imply that confirmations are sent at the same time. Transaction processing systems are the backbone of an organization because they update constantly. work for customs brokerage has caused some lost business and pressure on margins. While operational trend lines continue to improve, the anticipated cost savings may not be achieved this fiscal year. Accounts Receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying : Net accounts receivable increased to $544.2 million at the end of the quarter, $77.2 million higher than last year. However, operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. during the quarter was $12.2 million, $42.2 million better than the corresponding period last year, principally as a result of better management of accounts payable. Capital expenditures totaled $8.0 million, leaving free cash flow of $4.2 million. Notwithstanding the operating cash flow improvement, further focus and structure are being applied to three initiatives: terms, delinquencies and unauthorized credit. The goal is to improve cash flow efficiency and to lower debt. Global Business System (GBS See GB/sec. ): The roll-out of the company's transportation system is expected to be completed in all of Asia and six Latin American countries List of American countries Nations:
To address the issues described above and enhance the company's performance, the following initiatives are being taken: -- Refine U.S. accounts receivable responsibility for improved focus on cash flow and profits. -- Continued emphasis on Response Tracking to ensure service levels are being met. -- Staff reductions at the corporate office have been made as the company narrows its focus on high-priority projects. -- New business development in the United States. 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. Raymond L. Smith noted: "While this year's business plan anticipated a slower growth rate in the United States, we will continue to focus on productivity and improved customer satisfaction." The following table provides the revenue, net revenue and percentages attributable to the company's principal logistics services during the periods indicated (in thousands, except percentage figures):
Three Months Ended August 31,
2000 % 1999 %
REVENUE:
Customs brokerage $ 46,231 11.2 $ 45,593 11.6
Ocean freight forwarding 124,238 30.1 129,039 33.0
Airfreight forwarding 184,543 44.7 164,009 41.9
Material management and 57,938 14.0 53,010 13.5
distribution
Total revenue $412,950 100.0 $391,651 100.0
NET REVENUE:
Customs brokerage $ 46,231 30.2 $ 45,593 30.3
Ocean freight forwarding 32,503 21.2 32,272 21.4
Airfreight forwarding 40,472 26.4 40,604 27.0
Material management and 33,906 22.2 32,181 21.3
distribution
Total net revenue $153,112 100.0 $150,650 100.0
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended August 31,
2000 1999
REVENUE $ 412,950 $ 391,651
FREIGHT CONSOLIDATION COSTS 259,838 241,001
NET REVENUE 153,112 150,650
OPERATING EXPENSES
Salaries and related costs 87,226 86,434
General and administrative 55,480 53,522
Total operating expenses 142,706 139,956
INCOME FROM OPERATIONS 10,406 10,694
OTHER (EXPENSE) (1,679) (1,901)
INCOME BEFORE TAX EXPENSE 8,727 8,793
INCOME TAX EXPENSE 2,880 2,814
NET INCOME $ 5,847 $ 5,979
Weighted average shares outstanding -- basic 36,604 36,491
Earnings per share -- basic $ 0.16 $ 0.16
Weighted average shares outstanding -- diluted 37,246 36,736
Earnings per share -- diluted $ 0.16 $ 0.16
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
August 31, May 31,
2000 2000
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 75,082 $ 55,481
Accounts receivable, net of allowance for
doubtful accounts of $19,883 in August and
$19,381 in May, 2000 544,224 485,679
Deferred income taxes 11,983 14,468
Prepaid expenses and other current assets 13,992 13,132
Total current assets 645,281 568,760
PROPERTY AND EQUIPMENT, NET 110,980 110,208
OTHER ASSETS:
Intangibles, net of accumulated amortization
of $26,360 in August and $25,348 in May, 2000 105,301 107,148
Deferred income taxes 29,104 24,903
Other assets 15,522 14,213
Total other assets 149,927 146,264
TOTAL ASSETS $ 906,188 $ 825,232
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term obligations and
short-term borrowings $ 2,448 $ 2,479
Accounts payable 349,893 291,576
Accrued liabilities 115,131 113,370
Income tax payable 18,599 18,089
Total current liabilities 486,071 425,514
LONG-TERM OBLIGATIONS 132,301 116,891
OTHER LIABILITIES 8,710 8,472
TOTAL LIABILITIES 627,082 550,877
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock 368 366
Additional paid-in capital 141,048 139,474
Treasury stock, at cost (706) (706)
Retained earnings 167,709 161,862
Accumulated other comprehensive loss (29,313) (26,641)
Total stockholders' equity 279,106 274,355
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 906,188 $ 825,232
The company's management will also host a conference call today (September 29) at 1:00pm (ET), 10:00am (PT) to discuss the results, and a live webcast, as well as a replay, will be available on the Internet. If you wish to listen to the call, please log onto: www.fritz.com or www.vcall.com. Fritz Companies is a specialist in global integrated logistics. Fritz delivers comprehensive supply chain solutions to its customers worldwide by providing flexible door-to-door transportation and 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, using sophisticated information systems. Emphasis is placed on simplifying processes and reducing overall transportation costs. The Fritz network is composed of highly trained professionals working in more than 400 locations in 120 countries. Fritz Companies, Inc. (Nasdaq:FRTZ) global headquarters is at 706 Mission Street, 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 , CA, 94103 USA, tel: 415.904.8360. Additional information is available via the Internet: www.fritz.com. In this press release, the Company makes 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 subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our operations. Also, when we use any of the words "believes", "expects", "anticipates" or similar expressions, we are making forward-looking statements. Many possible events or factors could affect the future financial results and performance of the Company. This could cause results or performance to differ materially from those expressed in our forward-looking statements. These possible events or factors include the following: 1. Risks of international currency markets and governmental regulations adversely affecting currency exchange rates. 2. Lower space allotments available from carriers. 3. Governmental deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. efforts, regulations governing the Company's products and/or the international trade and tariff environment adversely affecting our ability to provide services to Customers. 4. Competitive marketplace conditions impeding im·pede tr.v. im·ped·ed, im·ped·ing, im·pedes To retard or obstruct the progress of. See Synonyms at hinder1. [Latin imped the ability of the Company to pass future cost increases to Customers. 5. The Company's ability to continue its program to improve operating results and cash flows. 6. The Company's ability to centralize cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. transaction processing for its customs brokerage product. 7. Dependence of the Company on international trade resulting from favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. worldwide economic conditions. 8. Dependence of the Company on continued services of key executives and managers. 9. The ability to retain skilled employees in a tight labor market labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience . 10. The ability of the Company to develop and implement information systems to keep pace with the increasing complexity and growth of the Company's business. 11. Diversion A turning aside or altering of the natural course or route of a thing. The term is chiefly applied to the unauthorized change or alteration of a water course to the prejudice of a lower riparian, or to the unauthorized use of funds. of management focus and resources as a result of pending litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . 12. Other risks disclosed in the Company's filings with the Securities and Exchange Commission. The description of risks and uncertainties is intended to qualify such forward-looking statements in order to invoke To activate a program, routine, function or process. the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provided by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. |
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