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AEI Reports Fourth Quarter And Full Year Results

DARIEN, CT USA (February 9, 1999) -- AEI today announced results for the quarter and full year ended December 31, 1998.

Gross revenues for the fourth quarter of 1998 were $389,365,000 compared to $412,569,000 in 1997. Fourth quarter 1998 net revenues were $125,732,000 compared to fourth quarter 1997 net revenues of $128,520,000. Net income for the fourth quarter of 1998 was $7,355,000, or $.22 per share, versus $14,507,000, or $.41 per share, for last year's fourth quarter. The fourth quarter of 1998 included a one-time pretax charge of $3,600,000, or $2,200,000 after taxes ($.06 per share), in connection with the successful negotiation with a major customer of a long-term contract in which the Company retroactively granted volume discounts for shipments in the first half of 1998. The fourth quarter of 1997 included a one-time gain of $1,200,000, or $.03 per share, related to the sale of a foreign affiliate. Excluding the one-time items described above, fourth quarter earnings per share from continuing operations declined 26 percent when compared to the fourth quarter of 1997.

The unfavorable fourth quarter results were due primarily to declines in airfreight export revenues in the United Kingdom, United States and Singapore. The declines in these countries negatively impacted gross revenues by approximately $33 million the quarter. The Company's ocean freight and customs brokerage activities recorded satisfactory growth in the quarter.

The Company's internal operating expenses (terminal, selling, general and administrative) increased approximately $6 million, or six percent, over the fourth quarter of last year due largely to the inclusion of terminal expenses from businesses acquired by the Company in the second and third quarters of 1998. These businesses contributed positively to the Company's fourth quarter results.

For the full year 1998, gross revenues were $1,513,196,000 compared to $1,545,720,000 in 1997 while net revenues were $490,513,000 versus $488,221,000 in 1997. Net income for 1998 was $43,756,000, or $1.26 per share, compared to $49,451,000, or $1.41 per share. Excluding the $.03 one-time gain recorded in 1997, earnings per share for 1998 declined nine percent.

Guenter Rohrmann, AEI's President and Chief Executive Officer stated, "The fourth quarter of 1998 was difficult in that we experienced declines in three of our five largest airfreight export markets, the United States, United Kingdom and Singapore. Our management teams in these markets are dedicated to improving airfreight revenues by aggressively increasing our sales efforts and reducing and controlling operating expenses wherever possible. Our ocean freight and customs brokerage activities performed well."

Mr. Rohrmann added, "While we are disappointed with these results, this past year AEI still recorded its second best year in its history. We anticipate gradual improvement in our airfreight business during 1999."

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 711 locations in 135 countries.