<PAGE>   1
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                   FORM 10-K
 
     [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED MAY 31, 1998
         [FEE REQUIRED]
 
                     FOR THE FISCAL YEAR ENDED MAY 31, 1998
 
                         COMMISSION FILE NUMBER 0-20548
 
                             FRITZ COMPANIES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                            <C>
                   DELAWARE                                      94-3083515
       (STATE OF OTHER JURISDICTION OF              (IRS EMPLOYER IDENTIFICATION NUMBER)
        INCORPORATION OR ORGANIZATION)
 
        706 MISSION STREET, SUITE 900                              94103
          SAN FRANCISCO, CALIFORNIA                              (ZIP CODE)
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
 
       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (415) 904-8360
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
 
<TABLE>
<S>                                            <C>
             TITLE OF EACH CLASS                 NAME ON EACH EXCHANGE ON WHICH REGISTERED
---------------------------------------------- ----------------------------------------------
                     NONE                                           NONE
</TABLE>
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
 
                          COMMON STOCK, $.01 PAR VALUE
                       ---------------------------------
                                (TITLE OF CLASS)
 
     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes  [ ] No
 
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (S 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
 
     At June 30, 1998, the aggregate market value of the registrant's Common
Stock held by non-affiliates of the registrant was approximately $287 million.
 
     At June 30, 1998, the number of shares outstanding of registrant's Common
Stock was 35,881,000.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     PORTIONS OF THE PROXY STATEMENT RELATING TO THE 1998 ANNUAL MEETING OF
      SHAREHOLDERS HAVE BEEN INCORPORATED BY REFERENCE -- PART III OF THE
                     FORM 10-K ( ITEMS 10, 11, 12 AND 13 )
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>   2
 
                                     PART I
 
ITEM 1 -- BUSINESS
 
GENERAL
 
     Fritz Companies, Inc. (the Company) is a leader in providing global
logistics services and related information services for importers and shippers
worldwide. The Company is primarily engaged in providing logistics management,
international air and ocean freight forwarding, customs brokerage, and
warehousing and distribution services. The Company also provides value-added
services through logistics information as well as international and domestic
movement of goods customarily provided by traditional freight forwarders. These
services are designed to provide integrated global logistics solutions for
customers to streamline their operations, improve their inventory management
information and enhance their profitability and to provide customers with more
efficient and effective international transportation strategies.
 
     The Company was incorporated in Delaware in August 1988 and is a successor
to a company incorporated in California in 1933. Internationally, the Company
operates a number of subsidiaries under the names "Fritz Transportation
International," "Fritz Air Freight," "Fritz Starber," "Fritz Fliway," "Fritz
Logistics," and "Fritz Companies," among others. Unless the context otherwise
requires, references in this Form 10-K to the Company include Fritz Companies,
Inc., its subsidiaries and its predecessor companies. Although the Company's
executive office is located in the United States at 706 Mission Street, Suite
900, San Francisco, California 94103, its network is global. The Company has
offices throughout North America, Australia, New Zealand, South Africa, Asia,
Europe, Latin America, and the Middle East.
 
     See Management's Discussion and Analysis of Financial Condition and Results
of Operations and the Company's Consolidated Financial Statements, including the
Notes thereto, for data related to the Company's revenues, operating profit and
identifiable assets by geographic regions. Unless otherwise stated, all amounts
in this Form 10-K are in thousands, except per share amounts.
 
     The following table presents revenue and net revenue in thousands of
dollars and as a percentage of total revenue or net revenue, as the case may be,
attributable to the Company's principal logistics services:
 
<TABLE>
<CAPTION>
                                                  TWELVE MONTHS ENDED MAY 31,
                               -----------------------------------------------------------------
                                      1998                   1997                   1996
                               -------------------    -------------------    -------------------
                                 AMOUNT        %        AMOUNT        %        AMOUNT        %
                               ----------    -----    ----------    -----    ----------    -----
<S>                            <C>           <C>      <C>           <C>      <C>           <C>
Revenue
Customs Brokerage............  $  165,055     12.7    $  152,257     13.2    $  142,606     13.7
Ocean Freight Forwarding.....     375,933     28.9       334,701     28.9       315,037     30.2
Airfreight Forwarding........     576,643     44.4       531,100     45.9       491,938     47.1
Warehouse & Distribution.....     182,452     14.0       138,712     12.0        94,277      9.0
                               ----------    -----    ----------    -----    ----------    -----
          Total..............  $1,300,083    100.0    $1,156,770    100.0    $1,043,858    100.0
                               ==========    =====    ==========    =====    ==========    =====
Net Revenue
Customs Brokerage............  $  165,055     29.6    $  152,257     29.9    $  142,606     31.2
Ocean Freight Forwarding.....     120,497     21.6       107,480     21.1       100,780     22.0
Airfreight Forwarding........     158,514     28.4       149,333     29.3       143,903     31.4
Warehouse & Distribution.....     114,199     20.4       100,301     19.7        70,279     15.4
                               ----------    -----    ----------    -----    ----------    -----
          Total..............  $  558,265    100.0    $  509,371    100.0    $  457,568    100.0
                               ==========    =====    ==========    =====    ==========    =====
</TABLE>
 
NARRATIVE DESCRIPTION OF BUSINESS
 
     International Airfreight and Ocean Freight Forwarding: The Company believes
it is among the largest forwarders of international air and ocean freight in the
United States.
 
                                        2
<PAGE>   3
 
     The Company's revenue from international ocean freight forwarding is
derived from logistics services both as an indirect ocean carrier (a "Non-Vessel
Operating Common Carrier" or NVOCC) and as an authorized agent for shippers and
importers. The Company may also function as an agent for steamship companies.
The Company's revenue from international airfreight forwarding is derived from
logistics services both as an indirect air carrier and as an authorized cargo
sales agent of various airlines.
 
     The Company also provides logistics services including warehousing,
protective packing, cargo consolidation, document preparation and electronic
transmittal, electronic purchase order/shipment tracking, inventory management,
expedited document delivery for customs clearance, priority notification to
consignee of cargo arrival and inland transportation of freight from point of
origin to a distribution center or the carrier's cargo terminal.
 
     The Company serves a broad range of freight forwarding customers. The
Company's ocean freight forwarding customers include retailers and industrial
companies shipping automotive parts, heavy equipment, steel, chemicals, forest
products, clothing, and produce. In general, airfreight has a high value
relative to its weight and the cost of shipment is usually a small portion of
its value. The Company's principal airfreight customers are shippers of medical
equipment and parts, drugs and pharmaceuticals, computer and high technology
equipment and parts, aircraft and automotive parts, electrical equipment,
machinery and machine parts, measuring and testing instruments, chemicals and
fashion apparel.
 
     As an NVOCC and an indirect air carrier (IAC), the Company procures
customer shipments, consolidates shipments bound for a particular destination,
determines the routing for consolidated shipments, selects the direct carrier or
charters an ocean vessel or aircraft and tenders each consolidated lot as a
single shipment to the direct carrier for transportation to a distribution
point.
 
     The Company's rates are based on the shipment weight and/or volume. Rates
charged by the Company are ordinarily less than the rate the shipper would be
charged by a steamship line or an airline. The consolidation of customers'
shipments allows the Company to obtain lower rates from steamship lines or
airlines than the rates the Company charges to its customers for individual
shipments. In addition, in certain tradelanes the Company controls a high volume
of freight and, accordingly, is able to obtain lower rates from certain carriers
or charter operators. This rate differential is the primary source of the
Company's net ocean and airfreight revenue as an indirect carrier.
 
     By accepting goods for ocean or air shipment as a NVOCC or IAC, the Company
assumes the role as a carrier and becomes responsible to the shipper for the
safe delivery of the shipments, subject to a legal limitation on liability of
$500 (not in thousands) per ordinary shipping unit of ocean freight and $20 (not
in thousands) per kilogram of airfreight. Because the Company's relationship
with the steamship line or airline is as a shipper, the steamship line or
airline generally assumes the same responsibility to the Company as the Company
assumes to its clients.
 
     As an authorized agent for shippers and importers, and as an authorized
cargo agent of various airlines and steamship companies, the Company arranges
transportation of individual shipments and receives a commission from the direct
carrier for arranging the shipments. When acting as such an agent, the Company
does not consolidate shipments and does not have responsibility for shipments
once they have been accepted by the direct carrier.
 
     As part of the Company's freight forwarding activities, the Company
provides project forwarding and logistics services involving governmental and
commercial projects, including foreign military sales, power plant construction,
shipbuilding, construction of manufacturing assembly facilities, civil
infrastructures and other large scale installations. The Company's project
forwarding services include integrated logistics for conveying heavy materials
and equipment from multiple origins to project sites. Such services may include
managing the customer's transportation, customs clearance and warehousing and
distribution. Most of these shipments are transported by ocean carrier. The
government portion of the Company's project forwarding business requires a
United States Government Department of Defense security clearance of the
Company's management team and those employees assigned to the project. The
warehouses receiving and storing the cargo must have a security clearance.
 
                                        3
<PAGE>   4
 
     In addition to ocean and airfreight forwarding services, the Company
provides forwarding services and cross marketing in the United States for a
number of its agents. The Company is compensated by sharing in the agents'
profits on their consolidation shipments.
 
     The Company is licensed by the Federal Maritime Commission of the United
States and is a member of the International Air Transport Association.
 
     Customs Brokerage: The Company is the largest customs broker in the United
States according to the United States Customs Service. The Company's customs
brokerage operations for air and ocean imports cover over 400 ports of entry in
the United States. The Company believes its customs brokerage operation is among
the most sophisticated in the United States as a result of its size, technology
and integration with other transportation logistics services provided to its
customers. In addition, the Company provides overseas customs brokerage services
in countries such as Australia, Canada, the United Kingdom and many Latin
American countries.
 
     As a customs broker in the United States, the Company is engaged by
importers to prepare the documentation required for entering merchandise into
the United States. In this capacity, the Company is responsible for coordinating
all events and communicating the status of shipments from the time of shipment
arrival through customs clearance. The Company receives commercial and
transportation documentation, reviews it for completeness and accuracy, prepares
and files documents necessary to clear customs, obtains customs bonds, assists
the importer in obtaining the appropriate commodity classification and arranges
for payment of collect freight charges. In most cases, the Company also deposits
import duties with the United States Customs Service on behalf of the importer.
In addition, the Company provides ancillary customs brokerage services to its
customers, including placement of surety bonds, duty reduction programs and
duty-drawback (recovery of duties paid when imported merchandise is
re-exported). The Company also provides bonded warehouse services which enable
importers to defer payment of customs duties until the cargo is released from
bond in conjunction with their production or distribution schedules. See
"Warehousing and Distribution Services."
 
     In providing customs brokerage services, the Company has access to
information concerning a shipment's origin and value, destination and mode of
transportation. As a result, the Company has been able to obtain additional
business by identifying opportunities to improve customer service or reduce
customers' expenses through expanded utilization of the Company's other
services, including cost-effective cargo consolidations, routing from overseas
origin to ports of entry, cargo insurance, container unloading, inventory
warehousing and arranging delivery of cleared cargo to its final destination.
 
     The Company believes it has been a leader in the use of computer technology
for customs brokerage activities on behalf of its clients. The Company was one
of the first customs brokerage operations to link with the United States Customs
Service through the Automated Broker Interface information system and to develop
a comprehensive, proprietary, on-line, interactive customs brokerage system
which permits customers to monitor the status of a shipment as it passes through
the government clearance process. The Company's information systems enable the
Company to electronically prepare documents, transmit information necessary for
cargo pre-clearance through customs, expedite cargo release and provide
nationwide control of customs clearance at multiple ports of entry for its
customers. See "Information Systems."
 
     The Company's customs brokerage services are provided by the Company's
licensed customs brokers and support staff who have substantial knowledge
regarding the complex tariff and government regulations applicable to customs
duty payments and other fees, commodity classifications, valuation and import
restrictions. In addition, the Company has developed substantial customs
brokerage expertise within particular client industries. The Company believes
its industry specialization is unique among competitors and enables the Company
to provide high levels of service to customers in these industries. The Company
provides ongoing training programs, which include preparation for the United
States customs broker license examination to employees, as well as to customers.
 
                                        4
<PAGE>   5
 
     The following table sets forth the number of United States Customs entries
filed by the Company:
 
<TABLE>
<CAPTION>
                                                        TWELVE MONTHS ENDED
                                                              MAY 31,
                                                      -----------------------
                                                      1998     1997     1996
                                                      -----    -----    -----
<S>                                                   <C>      <C>      <C>
Number of Entries Filed.............................  2,652    2,204    1,820
</TABLE>
 
     As a customs broker operating in the United States, the Company is licensed
by the United States Department of the Treasury and regulated by the United
States Customs Service. The Company's fees for customs brokerage services are
not regulated and the Company does not have a fixed fee schedule for such
services. Instead, customs brokerage fees are based on the complexity of the
transaction and the type of services required, but are generally not related to
the value of the customers' goods. In addition to its fees, the Company bills
the importer for amounts which the Company pays on the importer's behalf,
including duties, taxes, collect freight charges and similar payments.
 
     The Company offers its customs brokerage services primarily to purchasers
of imported goods. The Company's largest customs brokerage customer in 1998
accounted for 19.1% of customs brokerage revenue and 2.4% of the total
consolidated revenue. The Company believes the loss of this customer would not
have a material adverse effect on results from operations.
 
     Warehousing and Distribution Services: As part of its integrated global
logistics services, the Company provides an array of warehousing and
distribution services to its customers. The Company uses state of the art
warehouse management systems to deliver material management solutions to its
global customer base.
 
     The Company manages a mixture of multi-client facilities as well as
stand-alone contract logistics operations. The Company supports clients from a
wide variety of industry segments with emphasis on high-tech, retail, footwear,
and manufacturing.
 
     Warehousing services are available for the Company's customers in certain
of its facilities, as well as in space leased from others. The Company maintains
approximately 7.2 million square feet of owned and leased warehouse space. The
Company's warehousing services include receiving, deconsolidation and
decontainerization, cargo loading and unloading, assembly of freight, customer
inventory management and protective packing and storage. For import shipments,
the Company provides bonded warehouse services at certain locations to importers
so they can defer payment of customs duties until cargo releases are required to
meet customers' production or distribution schedules. The goods stored in bonded
warehouses are held until the importer is ready to withdraw or re-export them.
The Company is paid storage charges for use of its warehouses and fees for other
services.
 
     The Company provides surface transportation and domestic distribution
services involving the movement of shipments for local and long-haul delivery to
and from customers' doors. In this capacity, the Company procures shipments from
its customers, consolidates less than truckload quantities, determines the
routing, selects the carrier and tenders each shipment to such carrier for
transportation. The Company provides this service as an indirect carrier and as
an agent. The Company also provides logistics services by coordinating the most
efficient and cost-effective mode of long-haul surface transportation to its
customers.
 
     No single customer accounted for ten percent or more of total consolidated
revenue.
 
  Information Systems
 
     The Company invests substantial resources in its information systems to
accomplish the global objective of developing and maintaining an integrated
logistics system. The information system strategy is to provide accurate,
reliable and timely access to information regarding logistics and internal
operations through responsive and cost-effective information systems
technologies.
 
     The Company developed the Fritz Logistics Expediting System (FLEX) several
years ago to enable customers to track the flow of goods throughout the
transportation process. Customers can complete queries to receive the current
status of shipments. Most customers utilizing FLEX are multi-national
corporations with a large number of foreign suppliers. Customers can use FLEX to
generate special reports on supplier
 
                                        5
<PAGE>   6
 
compliance with purchase order requirements to enhance the effectiveness of
their merchandising programs. Development and enhancements to the FLEX system
have continued since its inception and include linking automated customs
brokerage systems to FLEX to monitor the status of shipments as they pass
through the customs clearance process. The Company's on-line, interactive,
nationwide customs brokerage system was one of the first to link with the United
States Customs Service's information systems.
 
     An important component of the Company's business strategy is to expand the
concept and use of the FLEX system. The Company intends to accomplish this
objective by further developing FLEX and replacing several domestic and
international systems with one, global, integrated system referred to as FLEX
II.
 
     The Company has recently completed development of its ocean export system,
which was implemented during 1998. This system replaces an existing system and
provides all the existing features plus several additional features, including
enhanced customer profiles, more effective management reports and on-line data.
The new ocean export system also provides user-friendly, Graphical User
Interface (GUI) based screens, including pop-up tables and on-line help, which
is expected to reduce training time for new users. Other expected benefits of
this new system include improved customer service, accounting-related
enhancements and improved marketability of the ocean product.
 
     The Company has also developed a Web-based software system which provides
visibility to shipping information and customs entry activity for any customer
with access to the Internet.
 
     For information regarding the Company's Year 2000 compliance program, see
Item 7 -- Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Year 2000.
 
     Marketing: An important part of the Company's business strategy is its
client-oriented marketing approach. The Company's marketing efforts focus on
senior transportation executives, financial officers and purchasing directors of
large complex users of international transportation logistics services. In
connection with the Company's emphasis on developing and maintaining long-term
relationships with such clients, the Company has developed several strategic
marketing programs, including the Global Accounts Program, the Global Logistics
Council and the Global Advisory Board.
 
     The National Accounts Program was originally established in 1971 to
increase visibility of the Company's services to large complex users of
international logistics services. In 1996, the program was renamed Global
Accounts Program to more accurately reflect its evolution and worldwide focus.
The Company's global account sales executives are responsible for securing new
business with major multi-national companies and maintaining customer
relationships with such companies.
 
     The Shippers' Council program was initiated by the Company in 1984 as a
forum for major importers and exporters, which includes numerous representatives
of companies that are not clients of the Company, to discuss their logistics
requirements, views on global trade and other related topics. In 1996, the
program was renamed Global Logistics Council to more closely depict the
comprehensive representation of its participants. Global Logistics Council
meetings are generally held twice a year, and representatives from approximately
40 companies participate in each meeting. Attendees at the Global Logistics
Council are invited to participate on an ongoing basis in the Company's Global
Advisory Board. The Global Advisory Board assists the Company in formulating
strategies designed to better serve the needs of the Company's clients. The
Global Logistics Council and the Global Advisory Board help the Company maintain
close contact with its clients and the global trade community on a continuing
basis.
 
     The Customer Response Team (CRT) concept was created in 1996 to facilitate
the evolution of traditional forwarder sales functions into team-focused,
regional client service organizations. CRT members focus on cross-selling to
existing clients and bringing new clients to the Company. Covering specified
geographic zones, CRT members take advantage of telemarketing techniques and
information technology to manage client relationships, develop customized
service programs and information systems.
 
     Competition and Business Conditions: The Company's principal businesses are
directly affected by the volume of international trade, particularly trade
between the United States and foreign nations, which is influenced by many
factors. These influences include economic and political conditions in the
United States
 
                                        6
<PAGE>   7
 
and abroad, major work stoppages, exchange controls, currency fluctuations, wars
and other armed conflicts and United States and foreign laws relating to
tariffs, trade restrictions, foreign investments and taxation. The global
logistics services industry is intensely competitive and expected to remain so
for the foreseeable future. The Company encounters competition from a large
number of firms. Much of this competition is from local or regional firms which
have only one or a small number of offices and do not offer the breadth of
services and integrated approach offered by the Company. However, some of the
competition is from major United States and foreign-owned firms which have
networks of offices and offer a wide variety of services. The Company believes
quality of service, including information systems capability, global network
capacity, reliability, responsiveness, expertise, convenience, scope of
operations, customized program designs and price are important competitive
factors in its industry.
 
     The Company encounters strong competition in the markets for each of its
principal services, identified as: customs brokerage, air and ocean freight
forwarding and warehouse and distribution. The Company has customs brokerage
offices in most major ports in the United States, Canada, United Kingdom and
other selected foreign locations. Although the Company competes with several
large United States and foreign firms in virtually all of its locations, the
principal customs brokerage competition is exerted by local and regional firms.
 
     As an ocean freight forwarder, the Company's competition includes steamship
companies, large forwarders with multiple offices and local and regional
forwarders with one or a small number of offices. As an airfreight forwarder,
the Company's principal competition is represented by other airfreight
forwarders in the United States and overseas. As a warehouse and distribution
service provider, the Company's principal competition includes local, regional,
national and international providers of the same or similar services.
 
     Approximately one-half of the Company's revenue was recorded by non-United
States subsidiaries in 1998. The strength of the United States Dollar, coupled
with the economic contraction in Asia, are having an impact on the Company's
operations. For example, the Company is beginning to experience volume declines
to Asia and modest volume increases to the United States and Europe from Asia.
In addition, competitive pressures continue to exert downward force on
transportation pricing.
 
     Regulation: As a customs broker operating in the United States, the Company
is licensed by the United States Department of the Treasury and regulated by the
United States Customs Service. The Company's fees as a customs broker are not
regulated. The Company's airfreight forwarding business is subject to
regulation, as an indirect air cargo carrier, under the Federal Aviation Act by
the Department of Transportation (DOT), the successor to the Civil Aeronautics
Board, although Part 296 of the DOT's Economic Aviation Regulations exempts
airfreight forwarders from most of the act's requirements. In its ocean freight
forwarding business, the Company is licensed as an ocean freight forwarder by
the Federal Maritime Commission (FMC). The FMC does not regulate the Company's
fees in any material respect. The Company's NVOCC business is subject to
regulation under the FMC tariff filing and surety bond requirements, and under
the Shipping Act of 1984, particularly those terms prescribing rebating
practices. The Company is regulated as a direct and as an indirect truck cargo
carrier by the DOT, previously the Interstate Commerce Commission, by which the
Company is licensed as both a common carrier and a property broker. For dispatch
purposes, the Company also holds an FCC Radio License. The Company's marine
cargo insurance brokerage business is licensed by the California Department of
Insurance.
 
     The Company's offshore operations are subject to similar regulation by the
regulatory authorities of the respective foreign jurisdictions. Some of the
Company's warehouse operations are approved by United States Customs as
container freight stations, and/or cargo examination stations and/or Class III
bonded warehouses.
 
     Trademarks: The Company holds registered trademarks and/or service marks in
the United States and numerous foreign countries for "Fritz Companies" and
certain related names and the Company's logo.
 
     Employees: As of May 31, 1998, the Company had approximately 10,000
employees located throughout the world. The Company considers its relationship
with its employees to be satisfactory.
 
                                        7
<PAGE>   8
 
     Management: The Company's executive officers are as follows:
 
<TABLE>
<CAPTION>
           NAME              AGE
           ----              ---
<S>                          <C>    <C>
Lynn C. Fritz..............  56     Chairman of the Board and Chief Executive Officer
Dennis L. Pelino...........  50     President and Chief Operating Officer
Robert Arovas..............  55     Executive Vice President and Chief Financial Officer
Jan H. Raymond.............  49     Senior Vice President, Secretary and General Counsel
Eugene Wojciechowski.......  43     Senior Vice President and Chief Information Officer
Ronald W. Womack...........  51     Vice President of Finance and Principal Accounting
                                    Officer
Janet Helvey...............  46     Vice President -- Accounts Receivable
Seamus M. Owen.............  54     Vice President -- Human Resources
</TABLE>
 
     LYNN C. FRITZ became Chief Executive Officer of the Company in 1986 after
serving in numerous positions since joining the Company on a full-time basis in
1965. Mr. Fritz received his B.A. degree from Georgetown University and his J.D.
degree from Lincoln University School of Law. Mr. Fritz was honored with the
"Marketing Executive of the Year -- 1991" award by the National Account
Marketing Association.
 
     DENNIS L. PELINO joined the Company in 1986 as Director of Sales and
Marketing, became a Director of the Company in 1991 and was appointed Chief
Operating Officer in October of 1993. He was promoted to Executive Vice
President in May 1995 and President in August 1996. Since 1988, Mr. Pelino has
been responsible for the Company's international operations, as well as the
Company's transportation services as an indirect carrier and key warehousing and
distribution services. Mr. Pelino is also responsible for the Company's
independent agent network and national account marketing and sales programs.
 
     ROBERT AROVAS joined the Company in January 1997 as Executive Vice
President and Chief Financial Officer. Prior to joining the Company, he was the
Senior Vice President and Chief Financial Officer of BAX Global, Inc. (formerly
Burlington Air Express, Inc.) for the past nine years and was previously a Vice
President of the Pittston Company (the parent company of Burlington Air Express,
Inc.). Mr. Arovas is a graduate of Syracuse University with a B.S. degree in
accounting.
 
     JAN H. RAYMOND has been General Counsel of the Company since 1985,
Secretary since 1991 and Senior Vice President since 1993. Prior to joining the
Company, Mr. Raymond was an associate with the law firm of Brobeck, Phleger &
Harrison. Mr. Raymond, who is a licensed customs broker, holds a B.S. degree
from Cornell University with a J.D. degree from the University of California at
Berkeley's Boalt Hall School of Law.
 
     EUGENE E. WOJCIECHOWSKI joined the Company in January 1997 as Senior Vice
President and Chief Information Officer. Prior to joining the Company, he was
Vice President of Information Systems at USL Capital Corporation, a division of
Ford Financial Services, and held positions of increasing responsibility at GE
Capital, PHH Group Inc., and ADP Network Services. Mr. Wojciechowski holds a MBA
in Information Systems from the University of Maryland and a B.S. in Mathematics
and Business Administration from Towson State University.
 
     RONALD W. WOMACK has been Vice President of Finance of the Company since
August 1996, and has served as Corporate Controller and Principal Accounting
Officer since May 1996. Previously, Mr. Womack served as Regional Controller and
Director of Treasury Services. Prior to rejoining the Company in 1995, he was
the Chief Financial Officer for HEAD Sports, Inc., a sporting equipment
distribution company.
 
     JANET HELVEY joined the Company in March 1997 as Vice President of Accounts
Receivable. Prior to joining the Company, she was the Controller -- Accounts
Receivable of BAX Global, Inc. (formerly Burlington Air Express, Inc.). Ms.
Helvey holds a B.A. degree from Muskingum College.
 
     SEAMUS M. OWEN joined the Company in April of 1998 as Vice President of
Human Resources. Prior to joining the Company, he served as Vice President of
Human Resources for Sydran Services, Inc. Prior to Sydran Services, Mr. Owen
held increasingly responsible roles with United Airlines, Sea-Land Services and
Ross Stores, Inc. Mr. Owen holds a B.S. degree from San Francisco State
University.
 
                                        8
<PAGE>   9
 
ITEM 2 -- PROPERTIES (Not in thousands)
 
     As of May 31, 1998, the Company operated approximately 340 offices and
logistics centers worldwide, including its headquarters in San Francisco. The
Company also operated approximately 120 warehousing and distribution centers,
which range in size from approximately 1,000 square feet to approximately
595,000 square feet. The warehousing and distribution centers totaled
approximately 7.2 million square feet as of May 31, 1998 of which the Company
owns approximately 86,500 square feet and leases the remaining space. The leases
for the Company's principal properties generally have terms of three years or
more and often include options to renew. While some of the Company's leases are
month-to-month and others expire in the near term, the Company does not believe
the expiration of any of its leases will have a material adverse effect on its
operations. See Note 6 of Notes to Consolidated Financial Statements.
 
ITEM 3 -- LEGAL PROCEEDINGS
 
     The Company is party to routine litigation incident to its business,
primarily claims for goods lost or damaged in transit or improperly shipped.
Most of the lawsuits in which the Company is the defendant are covered by
insurance and are being defended by the Company's insurance carriers. The
Company has established reserves for customer claims which management believes
are adequate to cover those litigation losses which may occur.
 
     In 1996, a total of six complaints were filed (three in federal courts and
three in California state courts) against the Company and certain of its then
officers and directors, purporting to be brought on behalf of a class of
purchasers or holders of the Company's stock between August 28, 1995 and July
23, 1996. The complaints allege various violations of Federal Securities law and
California Corporate Securities law in connection with prior disclosures made by
the Company and seek unspecified damages.
 
     The three class action suits filed against the Company in California state
courts were dismissed with prejudice by the Superior Court of California for the
County of San Francisco on grounds the claims asserted under the California
Corporate Securities law and common law fraud were not legally tenable. One of
the dismissals has been reversed on appeal, permitting the plaintiff to file an
amended complaint which has been filed.
 
     The three class action suits filed against the Company in federal court
were consolidated into one suit which was dismissed with prejudice by the United
States District Court for the Northern District of California, finding the
plaintiffs had not alleged any statement that was false and misleading in
violation of federal securities laws. Plaintiffs have filed an appeal with the
Ninth Circuit Court of Appeals. That appeal is pending.
 
     The Company is unable to predict the ultimate outcome of these suits and it
is possible the outcome could have a significant adverse impact on the Company's
future consolidated results of operations. However, the Company believes the
ultimate outcome of these matters will not have a significant adverse impact on
the Company's consolidated financial position or its consolidated results of
operations.
 
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     None.
 
                                        9
<PAGE>   10
 
                                    PART II
 
ITEM 5 -- MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
         MATTERS
 
     The Company's common stock is traded on the NASDAQ national market system
under the symbol FRTZ.
 
     The following table sets forth the high and low sales price in the NASDAQ
national market system for the Company's common stock for the period from June
1, 1996 to May 31, 1998.
 
<TABLE>
<CAPTION>
                                                              PRICE RANGE
                                                           ------------------
                                                            HIGH        LOW
                                                           -------    -------
<S>                                                        <C>        <C>
FISCAL PERIOD 1998
  First Quarter..........................................  $13.500    $ 8.500
  Second Quarter.........................................   16.000     11.500
  Third Quarter..........................................   14.750     11.000
  Fourth Quarter.........................................   16.812     12.625
FISCAL PERIOD 1997
  First Quarter..........................................  $36.000    $ 8.750
  Second Quarter.........................................   17.250     14.000
  Third Quarter..........................................   16.250     10.000
  Fourth Quarter.........................................   11.370      7.875
</TABLE>
 
     There were approximately 615 stockholders of record as of May 31, 1998. No
cash dividends were paid to stockholders during the year ended May 31, 1998.
 
     The Company intends to retain its future earnings for use in its business
and, accordingly, anticipates no cash dividends will be paid to holders of
shares of common stock in the foreseeable future.
 
ITEM 6 -- SELECTED FINANCIAL DATA
 
                      (In Thousands Except Per Share Data)
 
<TABLE>
<CAPTION>
                                                                                                       TWELVE
                                                                                     FIVE MONTHS       MONTHS
                                          TWELVE MONTHS ENDED MAY 31,                   ENDED          ENDED
                               --------------------------------------------------      MAY 31,      DECEMBER 31,
                                  1998         1997         1996        1995(A)         1995            1994
                               ----------   ----------   ----------   -----------    -----------    ------------
                                                                      (UNAUDITED)
<S>                            <C>          <C>          <C>          <C>            <C>            <C>
Revenue......................  $1,300,083   $1,156,770   $1,043,858    $870,903       $400,426        $773,389
Net Revenue..................     558,265      509,371      457,568     366,487        165,682         332,583
Merger and related costs.....                       --       14,555          --         29,995              --
Income (loss) from
  operations(b)..............      25,813        2,858       38,659      50,645        (12,368)         46,209
Net income (loss)............      18,090          308       25,001      32,310         (8,319)         30,133
Net income (loss) per
  share -- basic.............         .51          .01          .73        1.00           (.25)            .96
Net income (loss) per
  share -- diluted...........         .50          .01          .71         .99           (.25)            .94
Total assets.................     722,398      723,516      733,462     576,698(c)     576,698         530,810
Long-term obligations, net of
  current portion............     101,346       84,884       89,505      33,567(c)      33,567          33,048
Stockholder's equity.........     250,328      234,695      230,747     174,215(c)     174,215         177,917
</TABLE>
 
                                       10
<PAGE>   11
 
---------------
 
<TABLE>
<S>  <C>
(a)  On May 30, 1995, the Company completed its merger with
     Intertrans Corporation (Intertrans), which was accounted as
     a pooling of interests. Accordingly, the Company's financial
     statements have been restated for all periods prior to the
     merger, to include the results of operations, financial
     position and cash flows of Intertrans. The twelve months
     ended May 31, 1995 period represents combined operating
     results reported for the Company and Intertrans for the
     twelve months ended March 31, 1995 and April 30, 1995,
     respectively. In May 1995 the Company recorded merger and
     related costs in connection with the merger with Intertrans
     of approximately $30.0 million. In 1996, the Company
     recorded additional merger and related costs of $14.6
     million which were incurred in association with the
     Intertrans merger. Excluding these merger and related costs,
     income from operations for the five months ended May 31,
     1995 would have been $17.6 million.
(b)  The results in 1997 include a third quarter increase to the
     Allowance for Doubtful Accounts of approximately $17 million
     due to less than satisfactory collection performance.
(c)  Amounts are as of May 31, 1995.
</TABLE>
 
ITEM 7 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS
 
     The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto. Certain prior year amounts
have been reclassified to conform with the current year presentation.
 
     Results of Operations: The Company's principal services are customs
brokerage, international airfreight and ocean freight forwarding and warehousing
and distribution. Revenue for international ocean and airfreight forwarding and
surface transportation consolidation as an indirect carrier includes the
consolidation and transportation costs (e.g., ocean freight costs).
 
     Revenue for customs brokerage, international ocean and airfreight
forwarding and surface transportation as an agent includes only the fees and
commissions related to such shipments. For comparative purposes, the following
table is provided for the results of operations for the years ended May 31,
1998, 1997 and 1996.
 
<TABLE>
<CAPTION>
                                                              TWELVE MONTHS ENDED MAY 31,
                                                         --------------------------------------
                                                            1998          1997          1996
                                                         ----------    ----------    ----------
<S>                                                      <C>           <C>           <C>
REVENUE
  Customs Brokerage....................................  $  165,055    $  152,257    $  142,606
  Ocean Freight Forwarding.............................     375,933       334,701       315,037
  Airfreight Forwarding................................     576,643       531,100       491,938
  Warehouse and Distribution...........................     182,452       138,712        94,277
                                                         ----------    ----------    ----------
          Total Revenue................................  $1,300,083    $1,156,770    $1,043,858
                                                         ==========    ==========    ==========
NET REVENUE
  Customs Brokerage....................................  $  165,055    $  152,257    $  142,606
  Ocean Freight Forwarding.............................     120,497       107,480       100,780
  Airfreight Forwarding................................     158,514       149,333       143,903
  Warehouse and Distribution...........................     114,199       100,301        70,279
                                                         ----------    ----------    ----------
          Total Net Revenue............................  $  558,265    $  509,371    $  457,568
                                                         ==========    ==========    ==========
Operating Expenses.....................................  $  532,452    $  506,513    $  418,909
                                                         ----------    ----------    ----------
Income From Operations.................................  $   25,813    $    2,858    $   38,659
                                                         ----------    ----------    ----------
Net Income.............................................  $   18,090    $      308    $   25,001
                                                         ==========    ==========    ==========
</TABLE>
 
FISCAL YEAR ENDED MAY 31, 1998 COMPARED TO FISCAL YEAR ENDED MAY 31, 1997
 
     Revenue and Net Revenue: Revenue increased 12.4% to $1,300.0 million in
1998 from $1,156.8 million reported in the prior year and net revenue increased
9.6% to $558.3 million from $509.4 million reported in the prior year. All of
the Company's principal service areas reported revenue and net revenue growth
for the current year. Revenue and net revenue growth during the current year
were primarily attributable to expansion
 
                                       11
<PAGE>   12
 
of existing operations as only a small percentage of the growth was applicable
to acquisitions made during the prior and current year. The effect of
translation rate changes during the period resulted in a decrease in revenues
during 1998 of approximately $60.0 million. The resultant growth rate was
adversely affected by approximately 5 percentage points.
 
     Customs brokerage net revenue increased 8.4% to $165.1 million from $152.3
million reported in the prior year. The number of United States Customs entries
filed by the Company increased approximately 20.3% to 2.65 million from 2.20
million in the prior year. The increase in revenue and number of United States
Customs entries filed was caused principally by increased Canadian border
activity, expansion of business with existing customers, continued NAFTA
incentives and increased import activity from Asian countries.
 
     Ocean freight forwarding revenue and net revenue increased 12.3% and 12.1%,
respectively, due to increased shipping volumes from existing and new customers.
The increase in ocean volumes was caused principally by additional products
being shipped from Asia to North America and Europe and increased NVOCC
shipments. Net revenue as a percentage of gross revenue remained constant at
32.1% during the current and prior year in spite of significant changes in mix
between the ocean freight forwarding and NVOCC business. During the early part
of the fiscal year, carrier capacity in certain tradelanes, specifically those
which the Company had committed capacity, increased at a faster rate than
shipping volumes. That excess capacity resulted in downward pressure on pricing
levels and caused lower gross margins. The fourth quarter reflected an increase
in sales volume, coupled with reduced transportation costs. These combined to
overcome the earlier margin decline resulting in the overall margin to be
comparable to the prior year.
 
     Airfreight forwarding revenue and net revenue increased 8.6% and 6.1%,
respectively, due to increased numbers of shipments and total chargeable weight
of cargo shipped. The increase in the number of shipments was provided primarily
from existing customers. Gross margin decreased to 27.5% from 28.1% in the prior
year. The decrease in gross margin was primarily due to higher transportation
costs during the first half of the year which could not be passed to customers.
The fourth quarter reflected a decrease in volume causing a decrease in revenue
and net revenue compared to the same period in the prior year. This decrease was
primarily attributable to a decrease in United States export volume resulting
from the Asian currency crisis and the loss of certain accounts on the basis of
price. Overall declines were partially offset by increased volume of business
for United States domestic airfreight services which contributes generally
higher net revenues as a percentage of gross revenue than international
shipments.
 
     Warehousing and distribution revenue and net revenue increased 31.5% and
13.9%, respectively, due principally to increased demand from existing
integrated logistics customers, expansion of overseas and domestic services,
expansion of warehouse facilities, and strong Latin American, United States and
certain European economies. A significant portion of the increased revenue
resulted from trucking operations in Europe and the United States, which have a
significantly lower gross margin than warehouse products.
 
     Operating Expenses: Operating expenses increased 5.1% to $532.5 million
from $506.5 million reported in the prior year. Salaries and related costs
increased due to growth in the number of personnel. Salaries and related costs
as a percentage of net revenue decreased to 58.4% from 59.4% in the prior year.
 
     General and administrative expenses increased 1.2% to $206.4 million from
$204.0 million reported in the prior year. The overall expense increase was
mitigated by a prior year charge of $17.0 million to the Allowance for Doubtful
Accounts. Excluding this adjustment, general and administrative expenses
increased 10.4% during the current year which was principally due to greater
shipping volumes, higher occupancy costs and an increase in information systems
costs. General and administrative expenses as a percentage of net revenue were
37.0% compared to 40.0% (36.7%, excluding the $17.0 million charge) reported in
the prior year.
 
     Other Income and Expense: Due to the strengthening of the U.S. Dollar,
realized currency gains increased by 126%. This increase, together with higher
levels of interest income, was sufficient to more than mitigate interest expense
which remained unchanged at $8.2 million.
 
     Income tax expense consisted of approximately $14.9 million of current tax
provision and $6.4 million of deferred tax benefit. The Company's historical tax
rate was based upon a 32% worldwide effective rate. This
 
                                       12
<PAGE>   13
 
rate was 3 percentage points lower than the previous year and results from a
recent global tax review and implementation of programs identified during the
review.
 
FISCAL YEAR ENDED MAY 31, 1997 COMPARED TO FISCAL YEAR ENDED MAY 31, 1996
 
     Revenue: Revenue increased 10.8% to $1,156.8 million in 1997 from $1,043.9
million in 1996. All the Company's principal service areas reported revenue
increases. Warehouse and Distribution revenue increased by $44.4 million, or
47.1%, from the prior year. Air and ocean transportation shipments provided
combined transportation revenue growth of $58.8 million, an increase of 7.3%
over the previous year. Customs brokerage revenue increased $9.7 million, or
6.8%, over the previous year. Revenue attributed to current year acquisitions
and the incremental revenue from prior year acquisitions was $76.4 million, or
67.7% of total revenue growth in 1997. The balance of the revenue growth,
totaling $36.5 million, was derived from additional volumes from existing
customers and new customers added during the year. Price competition in the
Company's traditional transportation and brokerage services remained intense all
year with resultant downward pressure on prices. During the year fuel surcharges
were placed on the Company's airfreight business as a result of increases in
fuel cost. To a great extent, these price increases levied by most carriers were
passed to customers.
 
     Net Revenue increased 11.3% to $509.4 million in 1997 from $457.6 million
in 1996. Warehouse and Distribution provided an increase of $30.0 million in net
revenue, a 42.7% gain over the prior year, as the Company continued to rapidly
expand its logistics and supply chain management businesses. In percentage
terms, this segment has been the fastest growing segment of the business.
Customs brokerage provided approximately $9.7 million growth in net revenue, up
6.8% versus prior year. Existing customers and expansion of operations along the
USA and Canadian border accounted for much of the gain. Further growth in
customs brokerage was provided from operations in the United Kingdom. Air export
net revenue totaling $149.3 million increased by $5.4 million or 3.8%. This
modest increase reflects continued pressure on pricing with continuing increases
in transactions and tonnage. Ocean net revenues increased by $6.7 million, or
6.6% as the Company continued to see much faster growth in NVOCC revenues
compared with ocean freight forwarding revenues.
 
     Operating Expenses for the year increased 20.9% to $506.5 million in 1997
from $418.9 million in 1996. This annual increase was affected substantially by
the third quarter increase of 45.2% primarily due to a $17 million increase in
allowance for doubtful accounts due to less than satisfactory collection
performance.
 
     Salaries and related costs increased in 1997 by $53.3 million, a 21.4%
increase from the $249.2 million incurred during the prior year. The increase is
the result of growth in the number of full time equivalent employees caused by
acquisitions, new locations and expanding operations at existing locations. The
increase in salaries and related costs from additional personnel, representing
approximately a 13.6% increase in the number of employees, was partially
mitigated by a slight decrease in the average payroll cost per employee.
 
     The increase in general and administrative expenses was primarily due to
expenditures to support the Company's expansion, including data processing
costs, communications and occupancy related costs which include warehouse
related expenses. The general and administrative expense increase, excluding the
$17 million charge for doubtful accounts and salaries and related costs, was
$17.3 million, representing a 10.2% increase.
 
     Other Income and Expense: Other expense was $2.4 million in 1997 compared
to $0.2 million for the prior period. The increase occurred primarily from an
increase in interest expense, which is a function of the increase in short-term
borrowings and long-term obligations. For further discussion of borrowings and
obligations see Note 3 of Notes to Consolidated Financial Statements.
 
     Income Taxes: Taxes on income for 1997 were $0.2 million compared to $13.5
million for 1996. The effective tax rates for 1997 and 1996 were 35%. The
Company's effective tax rate may fluctuate due to changes in local tax rates and
regulations in those countries in which the Company operates and the level of
pre-tax profit earned in those countries.
 
                                       13
<PAGE>   14
 
  Liquidity and Capital Resources
 
     Cash and equivalents were $53.9 million at May 31, 1998, representing a
24.2% increase from $43.4 million at May 31, 1997. Positive operational cash
flow of $55.1 million was used to fund capital expenditures of $21.8 million
resulting in free cash flow of $33.3 million. Capital expenditures consisted
mostly of expenditures for computer hardware and software, leasehold
improvements, and warehouse equipment.
 
     The Company paid cash of $15.4 million relating to acquisitions. These
payments consisted of reductions to existing debt totaling $8.8 million, and
additional payments to the sellers of the acquired businesses totaling $6.6
million resulting from achievement of specified net revenue or pre-tax income
levels from operating units with purchase price contingencies.
 
     On March 27, 1998, the Company entered into a $100 million syndicated
multi-currency (Credit Facility), maturing March 2001. Borrowings under this
facility are classified as long-term debt. This Credit Facility replaces a $60
million credit facility which was to mature December 15, 1998. The purpose of
the Credit Facility is to provide letters of credit and working capital as
required. The Company must comply with certain financial covenants such as: 1)
minimum working capital, 2) minimum net worth, 3) maximum leverage ratio, 4)
minimum fixed charge coverage ratio, and 5) maximum capital expenditures.
 
     As of May 31, 1998, utilization of the Credit Facility was $25.5 million,
comprised of $10.0 million of borrowings under the Credit Facility and $15.5
million for outstanding letters of credit. Therefore, the Company's total
available borrowing capacity under the Credit Facility as of May 31, 1998 was
approximately $74.5 million.
 
     The Company makes significant disbursements on behalf of its customers for
items such as customs duty and taxes. Billings to customers for these
disbursements, which can be several times the amount of the revenue derived from
these transactions, are not recorded as revenue and expenses in the Company's
income statement. These obligations, which greatly exceed reported revenues, are
recorded as amounts due from customers and trade accounts payable.
 
  New Accounting Standards
 
     In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use." The SOP provides guidance for
accounting for the costs of computer software for internal use whether developed
or purchased. The provisions of the SOP will be effective for financial
statements for fiscal years beginning after December 15, 1998. Earlier
application is permitted. This statement is effective for the Company's fiscal
year 1999. Adoption of this statement of position is not expected to have a
material impact on the Company's results of operations.
 
     In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income,"
which requires enterprises to report, by major component and in total, all
changes in equity from non-owner sources; and SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information," which establishes annual and
interim reporting standards for operating segments and related disclosures about
products, services, geographic areas and major customers.
 
     The above statements are effective for the Company's fiscal year 1999. The
effect of these statements will be limited to the form and content of the
Company's disclosures and are not expected to materially impact the Company's
results of operations, cash flow or financial position.
 
  "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of
1995
 
     The statements in this filing that relate to future plans, events,
expectations, objectives or performance (or assumptions underlying such matters)
are forward-looking statements that involve a number of risks and
 
                                       14
<PAGE>   15
 
uncertainties. Set forth below are certain important factors that could cause
the company's actual results to differ materially from those expressed in any
forward-looking statements.
 
  Year 2000
 
     The Company conducted a comprehensive review of its computer systems to
identify the systems affected by year 2000 (Y2K) and developed an implementation
plan to resolve these issues. This Y2K plan includes remediation of certain
systems, upgrading various systems and replacement of certain other systems.
Costs associated with modifying computer software for Y2K are expensed as
incurred. Total costs to upgrade or replace certain company systems for Y2K are
estimated to be approximately $6 million. Actual costs may vary from the
estimates as the remediation and testing the Company's systems progresses. The
Company believes modifications made to existing software and conversion to new
software will be completed before operations would be affected by the date
designation. However, if such modifications and conversions fail or
miscalculate, Y2K may have a material impact on the operations of the Company.
 
     The Company has begun the process of contacting customers, vendors,
carriers, government agencies, and other trading partners to ensure their
systems and services are Y2K compliant. The Company receives services from its
trading vendor partners in connection with the delivery by the Company of
products and services to its customers. Although the Company is not directly
responsible for these trading partners' systems, their problems with the Y2K
could materially effect the Company's business operations.
 
  Currency and Other Risk Factors
 
     The Company's worldwide operations are transacted in many currencies other
than the U.S. Dollar. Accordingly, the Company is exposed to inherent risks of
international currency markets and governmental regulations. The Company manages
these currency exposures through a variety of means such as hedging, conversion
of local cash to U.S. dollars, accelerating and decelerating international
payments among the Company's offices and agents. The Company's translation
adjustment and foreign exchange losses for fiscal year 1998 increased due to the
strengthening of the U.S. dollar relative to certain currencies of Asia, Europe
and Latin America. In particular, during the second and third quarters of fiscal
year 1998, the currencies of many Asian countries devalued significantly. The
charge to equity in the currency translation adjustment during 1998 was $9.8
million while net foreign currency gains realized during fiscal year 1998 were
approximately $7.3 million. Devaluation of foreign currencies could adversely
impact the financial results of operations in future periods.
 
     The Company's ability to provide service to its customers is highly
dependent on good working relationships with a variety of entities such as
airlines, steamship carriers and governmental agencies. Changes in space
allotments available from carriers, governmental deregulation efforts,
regulations governing the Company's products, and/or the international trade and
tariff environment could affect the Company's business in unpredictable ways.
 
     Management believes the Company's business has not been significantly or
adversely affected by inflation in the past. Historically, the Company has
generally been successful in passing cost increases to its customers by means of
price increases. However, competitive marketplace conditions could impede the
ability to pass future cost increases to customers and could erode the Company's
operating margins.
 
     Additional risks and uncertainties include:
 
     (i) The Company's ability to continue its program to improve operating
         results and cash flows,
 
     (ii) Dependence of the Company on international trade resulting from
          favorable worldwide economic conditions,
 
     (iii) Dependence of the Company on continued services of key executives and
           managers,
 
                                       15
<PAGE>   16
 
     (iv) Risks associated with the Company's acquisition strategy, including:
 
          (a) Diversion of management's attention to the assimilation of
              operations and personnel of acquired companies,
 
          (b) Potential adverse short-term effects of acquisitions on the
              Company's operating results, and
 
          (c) Integration of financial reporting systems and acquired assets.
 
     (v) The possible inability of the Company's information systems to keep
         pace with the increasing complexity and growth of the Company's
         business and Y2K issues,
 
     (vi) The increasing level of investment required by the transition of the
          Company from prior predominance of customs brokerage revenue to an
          increasing emphasis on integrated logistics and providing a full range
          of international transportation and supply chain management services,
 
     (vii) Diversion of management focus and resources as a result of pending
           litigation,
 
     (viii) Other risks disclosed elsewhere in this Form 10-K or in the
            Company's other filings with the Securities and Exchange Commission.
 
     The Company is continuing its comprehensive review of its pricing structure
of its various services and customer credit terms. The Company is also
continuing to review its expenses to improve the quality and efficiencies of the
Company's processes within the operating and supporting departments.
 
ITEM 7A -- QUANTITATIVE AND QUALITATIVE MARKET RISK DISCLOSURE
 
     The Company's market capitalization as of January 28, 1997 did not exceed
$2.5 billion. Therefore, in accordance with the instructions to this item, this
item as part of this report is not applicable.
 
ITEM 8 -- FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     The information required by this item is set forth at the pages indicated
in Item 14(a) of this Annual Report.
 
ITEM 9 -- CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
 
     None.
 
                                    PART III
 
ITEM 10 -- DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The information required by this item is incorporated herein by reference
from the sections entitled "Election of Directors" and "Section 16(a) Beneficial
Ownership Reporting Compliance" of the Company's definitive proxy statement to
be filed with the Securities and Exchange Commission no later than 120 days
after the Company's year end and to be delivered by the Company to its
shareholders in conjunction with the 1998 Annual Meeting of Shareholders. See
also Item 1 above.
 
ITEM 11 -- EXECUTIVE COMPENSATION
 
     The information required by this item is incorporated herein by reference
from the sections entitled "Compensation of Executive Officers," "Options
Granted to Executive Officers" and "Employment Agreements" of the Company's
definitive proxy statement to be filed with the Securities and Exchange
Commission no later than 120 days after the Company's year end and to be
delivered by the Company to its shareholders in conjunction with the 1998 Annual
Meeting of Shareholders.
 
                                       16
<PAGE>   17
 
ITEM 12 -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The information required by this item is incorporated herein by reference
from the section entitled "Ownership of Management and Principal Stockholders"
of the Company's definitive proxy statement to be filed with the Securities and
Exchange Commission no later than 120 days after the Company's year end and to
be delivered by the Company to its shareholders in conjunction with the 1998
Annual Meeting of Shareholders.
 
ITEM 13 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     The information required by this item is incorporated herein by reference
from the section entitled "Transactions with the Company" of the Company's
definitive proxy statement to be filed with the Securities and Exchange
Commission no later than 120 days after the Company's year end and to be
delivered by the Company to its shareholders in conjunction with the 1998 Annual
Meeting of Shareholders.
 
                                    PART IV
 
ITEM 14 -- EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
     (a) The following documents are filed as part of this report on Form 10-K:
 
<TABLE>
<CAPTION>
                                                              PAGE NO.
                                                              --------
<S>                                                           <C>
(1) Consolidated Financial Statements of the Company:
     Consolidated Balance Sheets............................  F-1
     Consolidated Statements of Operations..................  F-2
     Consolidated Statements of Cash Flows..................  F-3
     Consolidated Statements of Stockholders' Equity........  F-4
     Notes to Consolidated Financial Statements.............  F-5
     Independent Auditors' Report...........................  F-18
(2) Financial Statement Schedules:
     Schedule II -- Valuation and Qualifying Accounts.......  F-19
     All other schedules are omitted by absence of
     conditions under which they would be required or
     because the required information is included in the
     consolidated financial statements or notes thereto.
(3) Exhibits:
     See attached Exhibit Index.............................  F-20
</TABLE>
 
     (b) The Company filed the following reports on Form 8-K from March 1, 1998
through the date hereof in 1998.
 
        1) March 6, 1998
 
        Item 5. Other Events
 
        On February 9, 1998, the California Court of Appeal reversed an order of
        the San Francisco Superior Court dismissing with prejudice a class
        action lawsuit filed against the Company and certain of its officers
        (Greenfield v. Fritz), finding the plaintiff should have been given an
        opportunity to amend its defective complaint.
 
        On March 5, 1998, the United States District Court of the Northern
        District of California entered an order dismissing with prejudice the
        class action lawsuits filed against the Company and certain of its
        officers in July and August 1996 (Polk v. Fritz, Weiss v. Fritz and E.M.
        Lawrence etc. Trust v. Fritz), finding that plaintiffs had not alleged
        any statement that was false and misleading in violation of the federal
        securities laws.
 
                                       17
<PAGE>   18
 
                                   SIGNATURES
 
     Pursuant to requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
 
                                          FRITZ COMPANIES, INC.
 
                                          By: /s/ Lynn C. Fritz
                                          --------------------------------------
                                                       Lynn C. Fritz
                                                   Chairman of the Board
 
Date: July 15, 1998
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on July 15, 1998 by the following persons on behalf
of the registrant and in the capacities indicated.
 
<TABLE>
<CAPTION>
                       SIGNATURE                                       TITLE                   DATE
                       ---------                                       -----                   ----
<S>                                                       <C>                              <C>
 
                   /s/ LYNN C. FRITZ                      Chairman of the Board and Chief  July 15, 1998
--------------------------------------------------------  Executive Officer (Principal
                     Lynn C. Fritz                        Executive Officer)
 
                  /s/ DENNIS L. PELINO                    President, Chief Operating       July 15, 1998
--------------------------------------------------------  Officer and Director
                    Dennis L. Pelino
 
                   /s/ ROBERT AROVAS                      Executive Vice President and     July 15, 1998
--------------------------------------------------------  Chief Financial Officer and
                     Robert Arovas                        Principal Financial Officer
 
                  /s/ RONALD W. WOMACK                    Vice President of Finance and    July 15, 1998
--------------------------------------------------------  Principal Accounting Officer
                    Ronald W. Womack
 
                 /s/ JAMES E. GILLERAN                    Director                         July 15, 1998
--------------------------------------------------------
                   James E. Gilleran
 
                   /s/ PRESTON MARTIN                     Director                         July 15, 1998
--------------------------------------------------------
                     Preston Martin
 
                   /s/ PAUL OTELLINI                      Director                         July 15, 1998
--------------------------------------------------------
                     Paul Otellini
 
                 /s/ WILLIAM J. RAZZOUK                   Director                         July 15, 1998
--------------------------------------------------------
                   William J. Razzouk
</TABLE>
 
                                       18
<PAGE>   19
 
                             FRITZ COMPANIES, INC.
 
                          CONSOLIDATED BALANCE SHEETS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
                                     ASSETS
 
<TABLE>
<CAPTION>
                                                              MAY 31,     MAY 31,
                                                                1998        1997
                                                              --------    --------
<S>                                                           <C>         <C>
CURRENT ASSETS:
  Cash and equivalents......................................  $ 53,935    $ 43,368
  Accounts receivable, net of allowance for doubtful
     accounts of $23,232 in 1998 and $22,292 in 1997........   406,381     414,550
  Deferred income taxes.....................................    16,978      10,519
  Prepaids and other current assets.........................    23,142      27,978
                                                              --------    --------
          Total current assets..............................   500,436     496,415
                                                              --------    --------
PROPERTY AND EQUIPMENT -- NET...............................    92,049     100,879
                                                              --------    --------
OTHER ASSETS:
  Intangibles, net of accumulated amortization of $16,866 in
     1998 and $16,204 in 1997...............................   112,965     110,691
  Other assets..............................................    16,948      15,531
                                                              --------    --------
          Total other assets................................   129,913     126,222
                                                              --------    --------
          TOTAL ASSETS......................................  $722,398    $723,516
                                                              ========    ========
                       LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current portion of long-term obligations and short-term
     borrowings.............................................  $  4,764    $ 37,200
  Accounts payable..........................................   266,863     276,228
  Accrued liabilities.......................................    74,880      73,094
  Income tax payable........................................    12,394       7,148
                                                              --------    --------
          Total current liabilities.........................   358,901     393,670
                                                              --------    --------
LONG-TERM OBLIGATIONS.......................................   101,346      84,884
DEFERRED INCOME TAXES.......................................     1,585       1,243
OTHER LIABILITIES...........................................    10,238       9,024
                                                              --------    --------
          TOTAL LIABILITIES.................................   472,070     488,821
                                                              --------    --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
  Common stock: par value $.01 per share; 60,000 shares
     authorized, 35,896 shares issued and outstanding,
     (35,445 shares issued and outstanding in 1997).........       359         354
Additional paid-in capital..................................   131,797     124,424
Retained earnings...........................................   130,985     112,895
Cumulative foreign currency translation adjustments.........   (12,813)     (2,978)
                                                              --------    --------
          Total stockholders' equity........................   250,328     234,695
                                                              --------    --------
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........  $722,398    $723,516
                                                              ========    ========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       F-1
<PAGE>   20
 
                             FRITZ COMPANIES, INC.
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
<TABLE>
<CAPTION>
                                                                   YEAR ENDED MAY 31,
                                                         --------------------------------------
                                                            1998          1997          1996
                                                         ----------    ----------    ----------
<S>                                                      <C>           <C>           <C>
REVENUE................................................  $1,300,083    $1,156,770    $1,043,858
FREIGHT CONSOLIDATION COSTS............................     741,818       647,399       586,290
                                                         ----------    ----------    ----------
NET REVENUE............................................     558,265       509,371       457,568
                                                         ----------    ----------    ----------
OPERATING EXPENSES
  Salaries and related costs...........................     326,025       302,555       249,243
  General and administrative...........................     206,427       203,958       155,111
  Merger and related costs.............................          --            --        14,555
                                                         ----------    ----------    ----------
          Total operating expenses.....................     532,452       506,513       418,909
                                                         ----------    ----------    ----------
INCOME FROM OPERATIONS.................................      25,813         2,858        38,659
OTHER INCOME (EXPENSE).................................         789        (2,384)         (196)
                                                         ----------    ----------    ----------
INCOME BEFORE INCOME TAX EXPENSE.......................      26,602           474        38,463
INCOME TAX EXPENSE.....................................       8,512           166        13,462
                                                         ----------    ----------    ----------
NET INCOME.............................................  $   18,090    $      308    $   25,001
                                                         ==========    ==========    ==========
Weighted average shares outstanding -- Basic...........      35,744        35,128        34,239
                                                         ==========    ==========    ==========
Net Income per share -- Basic..........................  $      .51    $      .01    $      .73
                                                         ==========    ==========    ==========
Weighted average shares outstanding -- Diluted.........      36,128        35,473        35,273
                                                         ==========    ==========    ==========
Net Income per share -- Diluted........................  $      .50    $      .01    $      .71
                                                         ==========    ==========    ==========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       F-2
<PAGE>   21
 
                             FRITZ COMPANIES, INC.
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                    YEAR ENDED MAY 31,
                                                             --------------------------------
                                                               1998        1997        1996
                                                             --------    --------    --------
<S>                                                          <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income...............................................  $ 18,090    $    308    $ 25,001
  Adjustments to reconcile net income to net cash
  Provided by (used in) operating activities:
     Depreciation and amortization.........................    26,385      24,600      20,162
     Customer deposits refunded, net.......................        --          --      (1,984)
     Deferred income taxes.................................    (6,358)     (5,005)       (114)
     Stock compensation....................................     4,412       2,299         756
     Other.................................................    (1,073)     (1,559)        143
     Effect of changes in:
       Receivables, net....................................    14,253     (15,314)    (41,990)
       Prepaids and other current assets...................     4,954         391       4,183
       Payables and accrued liabilities....................    (5,605)    (36,231)     13,924
       Accrued merger and related costs....................        --          --     (10,019)
                                                             --------    --------    --------
  Net cash provided by (used in) operating activities......    55,058     (30,511)     10,062
                                                             --------    --------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures.....................................   (21,797)    (42,481)    (42,569)
  Acquisitions, net of cash acquired.......................    (6,621)    (12,237)    (10,429)
  Acquisitions, debt.......................................    (8,758)    (11,873)    (15,135)
  Proceeds from sale of fixed assets.......................     3,485      33,747       5,082
  Other....................................................    (2,806)     (1,093)        607
                                                             --------    --------    --------
  Net cash used in investing activities....................   (36,497)    (33,937)    (62,444)
                                                             --------    --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net (decrease) increase in short-term borrowings.........   (11,991)     22,833       2,000
  Proceeds from issuance of long-term obligations..........    11,695       8,016      81,911
  Long-term obligations repaid.............................    (4,378)    (11,513)    (34,917)
  Proceeds from stock options exercised....................       389       5,161      17,359
  Employee stock purchases.................................       422         431          --
  Other....................................................      (303)     (1,269)        147
                                                             --------    --------    --------
  Net cash provided by (used in) financing activities......    (4,166)     23,659      66,500
                                                             --------    --------    --------
Foreign currency translation effect on cash................    (3,828)     (2,304)     (1,918)
                                                             --------    --------    --------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS................    10,567     (43,093)     12,200
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD................  $ 43,368    $ 86,461    $ 74,261
                                                             --------    --------    --------
CASH AND EQUIVALENTS AT END OF PERIOD......................  $ 53,935    $ 43,368    $ 86,461
                                                             ========    ========    ========
OTHER CASH FLOW INFORMATION:
  Income taxes paid........................................  $  9,640    $  8,185    $ 13,282
                                                             ========    ========    ========
  Interest paid............................................     8,471       8,622       4,892
                                                             ========    ========    ========
  Noncash investing and financing activities in connection
     with acquisitions:
       Receivables assumed.................................    (6,084)         --          --
                                                             ========    ========    ========
       Payables and accrued liabilities assumed............     6,557       2,189      36,600
                                                             ========    ========    ========
       Capital stock issued................................     2,155         350       3,150
                                                             ========    ========    ========
       Other...............................................    (2,628)         --          --
                                                             ========    ========    ========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       F-3
<PAGE>   22
 
                             FRITZ COMPANIES, INC.
 
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                               CUMULATIVE
                                                                                                 FOREIGN
                                                  ADDITIONAL                TREASURY STOCK      CURRENCY         TOTAL
                                                   PAID-IN     RETAINED   ------------------   TRANSLATION   STOCKHOLDERS'
                               SHARES    AMOUNT    CAPITAL     EARNINGS   SHARES     AMOUNT    ADJUSTMENTS      EQUITY
                               -------   ------   ----------   --------   -------   --------   -----------   -------------
<S>                            <C>       <C>      <C>          <C>        <C>       <C>        <C>           <C>
Balance, May 31, 1995........   31,858   $ 319     $120,066    $ 87,586    15,300   $(35,000)   $  1,244       $174,215
Net income...................                                    25,001                                          25,001
Foreign currency translation
  adjustment.................                                                                     (1,918)        (1,918)
Stock issued for services
  performed..................        1                   37                                                          37
Common stock issued in
  acquisition of companies...       81       1        3,149                                                       3,150
Stock split..................   17,220     172         (172)                                                          0
Stock options exercised......      950      10       17,349                                                      17,359
Tax benefit from exercise of
  stock options..............                        12,903                                                      12,903
Retirement of treasury
  stock......................  (15,300)   (153)     (34,847)              (15,300)    35,000                          0
Restricted stock grants......       88                                                                                0
                               -------   -----     --------    --------   -------   --------    --------       --------
Balance, May 31, 1996........   34,898     349      118,485     112,587         0          0        (674)       230,747
Net income...................                                       308                                             308
Foreign currency translation
  adjustment.................                                                                     (2,304)        (2,304)
Common stock issued in
  acquisition of companies...      215       2          350                                                         352
Stock grants and options
  exercised..................      292       3        5,158                                                       5,161
Employee Stock Purchase
  Plan.......................       40                  431                                                         431
                               -------   -----     --------    --------   -------   --------    --------       --------
Balance, May 31, 1997........   35,445   $ 354     $124,424    $112,895         0   $      0    $ (2,978)      $234,695
Net income...................                                    18,090                                          18,090
Foreign currency translation
  adjustment.................                                                                     (9,835)        (9,835)
Common stock issued in
  acquisition of companies...      161       2        2,155                                                       2,157
Stock grants and options
  exercised..................      251       3        4,796                                                       4,799
Employee Stock Purchase
  Plan.......................       39                  422                                                         422
                               -------   -----     --------    --------   -------   --------    --------       --------
Balance, May 31, 1998........   35,896   $ 359     $131,797    $130,985         0   $      0    $(12,813)      $250,328
                               =======   =====     ========    ========   =======   ========    ========       ========
</TABLE>
 
          See accompanying notes to consolidated financial statements
 
                                       F-4
<PAGE>   23
 
                             FRITZ COMPANIES, INC.
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     Basis of Presentation: The consolidated financial statements include the
accounts of Fritz Companies, Inc. (the Company) and all significant domestic and
international companies wherein the Company has more than a 50% equity ownership
or otherwise exercises control. The Company's interest in 20% to 50% owned
companies are recorded on the equity method. All significant intercompany
balances and transactions have been eliminated in consolidation. Certain prior
year amounts have been reclassified to conform with the current year's financial
statement presentation.
 
     The Company's consolidated financial statements reflect certain estimates
and assumptions which affect amounts reported and disclosed in these financial
statements and related notes in accordance with generally accepted accounting
principles. Actual results could differ from those estimates.
 
     Cash and Equivalents: Cash and equivalents include demand deposits and
short-term investments with original maturities of three months or less.
 
     Property and Equipment: Property and equipment are stated at cost.
Depreciation and amortization are determined using the straight-line method for
the estimated useful lives of assets as follows:
 
<TABLE>
<S>                                                        <C>
Buildings................................................  40 years
Furniture and equipment..................................  5-10 years
Computer hardware and software...........................  3-5 years
</TABLE>
 
     Leasehold improvements are amortized over their estimated useful lives or
terms of the related lease, whichever is shorter. Certain costs related to
internally developed software are capitalized and amortized on a straight-line
basis over their expected useful life (not to exceed five years), commencing
when the asset is placed in service.
 
     Maintenance and repair expenditures are charged to expense when incurred.
 
     Intangibles: Intangibles, including goodwill and covenants-not-to-compete,
result from business acquisitions. Amortization is determined using the
straight-line method over the estimated useful lives of the intangible assets as
follows:
 
<TABLE>
<S>                                                        <C>
Goodwill.................................................  40 years
Covenants-not-to-compete.................................  2-5 years
</TABLE>
 
     Net intangibles as of May 31, 1998 include goodwill of $112,584 and
covenants-not-to-compete of $381. The Company annually reviews its long-lived
assets, including goodwill, to determine whether events and circumstances would
cause need to revise estimates of asset value. Potential impairment is evaluated
on a basis of whether the asset is fully recoverable from projected,
undiscounted net cash flows of the related business unit. Impairment would be
recognized in operating results if a permanent diminution in value is determined
to have occurred.
 
     Foreign Currency Translation Adjustment: Foreign assets and liabilities
have been translated at current exchange rates and related revenues and expenses
have been translated at average rates of exchange in effect during the year. The
impact of exchange rate changes is shown as "Cumulative Foreign Currency
Translation Adjustments" in stockholders' equity. Transaction gains and losses
from foreign exchange transactions are included in results of operations.
 
     Off-Balance Sheet Risk and Concentration of Credit Risk: Financial
instruments which potentially subject the Company to concentrations of credit
risk are principally represented by temporary cash investments and accounts
receivable. The Company places its temporary cash investments with financial
institutions to limit its risk of loss.
 
                                       F-5
<PAGE>   24
                             FRITZ COMPANIES, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     The Company's customer base is representative of a wide range of industries
and includes customers located throughout the world. The Company had no
significant concentration of credit risk as of May 31, 1998 or 1997. See Notes 3
and 8 of Notes to Consolidated Financial Statements for discussion of the
Company's off-balance sheet risks.
 
     Revenue Recognition: Revenues and expenses related to the transportation of
freight are recognized at the time the freight departs the terminal of origin.
This method approximates recognizing revenues and expenses when the shipment is
completed. Custom brokerage revenues are recognized upon completing documents
necessary for customs entry purposes. Warehouse and distribution revenue is
recognized upon execution of the service provided.
 
     Revenue realized by the Company as an indirect carrier includes the direct
carrier's charges to the Company for transporting the shipment. Revenue realized
in other capacities includes only the commissions and fees charged for
applicable services rendered.
 
     Net Revenue for air and ocean freight forwarding and consolidation of
surface transportation as an indirect carrier is determined by deducting freight
consolidation and transportation costs from such revenue.
 
     Net Income Per Share: The Company adopted the provisions to Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share," effective
December 1, 1997. The statement requires the calculation and disclosure of basic
and diluted earnings per share as opposed to primary and fully diluted
calculations required under Accounting Principles Board Opinion (APB) No. 15,
"Earnings Per Share," and related pronouncements. All prior period earnings per
share and average shares outstanding data have been restated to reflect the
adoption of this statement. Basic and diluted earnings per share are presented
below.
 
<TABLE>
<CAPTION>
                                                                   YEAR ENDED MAY 31,
                                                              -----------------------------
                                                               1998       1997       1996
                                                              -------    -------    -------
<S>                                                           <C>        <C>        <C>
BASIC:
  Net income................................................  $18,090    $   308    $25,001
  Weighted-average number of common shares outstanding......   35,744     35,128     34,239
     Basic earnings per common share........................  $  0.51       0.01    $  0.73
                                                              =======    =======    =======
DILUTED:
     Net income.............................................  $18,090    $   308    $25,001
SHARES:
  Weighted-average number of common shares outstanding......   35,744     35,128     34,239
  Potentially dilutive common shares........................      384        345      1,034
                                                              -------    -------    -------
     Total shares...........................................   36,128     35,473     35,273
     Diluted earnings per common share......................  $  0.50    $  0.01    $  0.71
                                                              =======    =======    =======
</TABLE>
 
Options with an exercise price greater than the average market price of common
shares were not included in the computation of diluted earnings per share.
 
     Income Taxes: The Company uses the liability method. Under this method the
net deferred tax asset or liability is determined based on the tax effects of
differences between book and tax basis of various balance sheet assets and
liabilities and gives current recognition to the effect of any change in tax
rates and laws.
 
     Stock Options: The Company accounts for its stock compensation plans using
the intrinsic method; therefore, no costs are reflected in the consolidated
statements of operations when stock options are granted or exercised, except for
options which were granted at less than 90% of fair value at date of grant. The
Company realizes an income tax benefit from the exercise or early disposition of
certain stock options. This benefit
 
                                       F-6
<PAGE>   25
                             FRITZ COMPANIES, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
reduces current income taxes payable and increases additional paid in capital.
See Note 10 of Notes to Consolidated Financial Statements.
 
NOTE 2. PROPERTY AND EQUIPMENT
 
     Property and equipment consist of the following:
 
<TABLE>
<CAPTION>
                                                               MAY 31,
                                                         --------------------
                                                           1998        1997
                                                         --------    --------
<S>                                                      <C>         <C>
Land...................................................  $  1,006    $  1,162
Building and leasehold improvements....................    40,018      41,979
Furniture and equipment................................    61,637      60,786
Computer hardware and software.........................    65,103      61,857
Software development in progress.......................     3,488       5,712
                                                         --------    --------
          Total........................................   171,252     171,496
Less accumulated depreciation and amortization.........   (79,203)    (70,617)
                                                         --------    --------
          Total........................................  $ 92,049    $100,879
                                                         ========    ========
</TABLE>
 
     Depreciation and amortization of property and equipment amounted to $21,125
in 1998, $19,639 in 1997, and $16,114 in 1996. Software development in progress
includes external costs incurred to develop software which has not been
completed as of balance sheet date. During the years ended May 1998 and 1997,
$1,495 and $2,339, respectively, represented software development costs
completed and transferred to "Computer hardware and software."
 
     In April 1997, the Company sold and leased back certain warehouse
facilities located in North America. Net proceeds from the sale were
approximately $30,700 and provided a minimal gain from the sale. The net
proceeds were used to reduce short-term borrowings. See Note 3, of Notes to
Consolidated Financial Statements for discussion of the Company's borrowings and
obligations.
 
                                       F-7
<PAGE>   26
                             FRITZ COMPANIES, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
NOTE 3. OBLIGATIONS AND BORROWINGS
 
     Short-term borrowings and long-term obligations consist of the following:
 
<TABLE>
<CAPTION>
                                                                    MAY 31,
                                                              --------------------
                                                                1998        1997
                                                              --------    --------
<S>                                                           <C>         <C>
Current portion of long-term obligations and short-term
  borrowings................................................  $  4,764    $ 37,200
                                                              ========    ========
Long-term obligations:
  6.43% Senior Notes due on April 15, 2003..................  $ 75,000    $ 75,000
Bank credit agreement providing a $100 million credit
  facility maturing March 27, 2001 with interest at LIBOR
  (6.3%) plus .325% to 0.750% as determined by fixed charge
  coverage ratio or "certain financial covenants"...........    10,000          --
Installment obligations related to acquisitions,
  non-interest bearing, due 1999 - 2002 (less unamortized
  discount, based on imputed interest rate of 7.0% --
  approximately $229 and $500 in 1998 and 1997,
  respectively).............................................     6,678      15,403
Term note payable due in installments through 2005,
  non-interest bearing......................................     1,851       2,379
Term note payable to a bank dated June 18, 1997, bearing
  interest at the bank's cost of funds (6.4%) plus a margin
  ranging from .5% to .7% with seven quarterly payments of
  $250 beginning the 40th month from date of the agreement
  and remaining balance outstanding due at the end of the
  60th month................................................     8,294          --
  Other obligations.........................................     4,180       4,171
                                                              --------    --------
          Total long-term obligations.......................   106,003      96,953
  Less current portion......................................    (4,657)    (12,069)
                                                              --------    --------
  Net long-term obligations.................................  $101,346    $ 84,884
                                                              ========    ========
</TABLE>
 
     At May 31, 1998, the Company's aggregate maturing long-term obligations and
short-term borrowings for the years 1999 through 2003 were $4,764; $4,141;
$12,818; $1,214 and $83,173, respectively and none thereafter. The carrying
value of the Company's long-term obligations approximates their fair value.
 
     On March 27, 1998, the Company entered into a $100 million syndicated
multi-currency credit facility (Credit Facility), maturing March 2001. This
Credit Facility replaces a $60 million credit facility which was to mature
December 15, 1998. The purpose of the Credit Facility is to provide letters of
credit and working capital not covered by internally generated funds. The
Company must maintain compliance with certain financial covenants such as: 1)
minimum working capital, 2) minimum net worth, 3) maximum leverage ratio, 4)
minimum fixed charge coverage ratio, and 5) maximum capital expenditures. As of
May 31, 1998, the balance outstanding under the Credit Facility was $10.0
million and the weighted average floating interest rate as of that date was
6.3%. At May 31, 1998, the Company was contingently liable for letters of credit
of $15,466 which reduces the Company's borrowing capacity under the current
Credit Facility and the Company had $16,200 in similar letters of credit
outstanding at May 31, 1997 under the Company's credit facility then in effect.
 
     The Company is required to comply with certain financial covenants such as
leverage, fixed charge coverage and current ratios within its other credit
agreements, many of which include cross default provisions tied to the Credit
Facility.
 
                                       F-8
<PAGE>   27
                             FRITZ COMPANIES, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     Information regarding the Company's activity in the Credit Facility is as
follows:
 
<TABLE>
<CAPTION>
                                                                   MAY 31,
                                                        -----------------------------
                                                         1998       1997       1996
                                                        -------    -------    -------
<S>                                                     <C>        <C>        <C>
Maximum amount outstanding during period..............  $41,000    $55,120    $60,000
Average amount outstanding during period..............  $20,184    $29,669    $23,282
Weighted average interest rate during period..........      6.7%       5.8%       6.1%
</TABLE>
 
NOTE 4. INCOME TAXES
 
     The current and deferred components of income tax expense (benefit) are as
follows:
 
<TABLE>
<CAPTION>
                                                                   MAY 31,
                                                        -----------------------------
                                                         1998       1997       1996
                                                        -------    -------    -------
<S>                                                     <C>        <C>        <C>
Current
  Federal.............................................  $ 2,022    $(5,674)   $ 3,442
  State...............................................    2,334       (338)       509
  Foreign.............................................   10,514     11,183      9,625
                                                        -------    -------    -------
          Total current...............................   14,870      5,171     13,576
                                                        -------    -------    -------
Deferred
  Federal.............................................   (4,237)    (5,446)     1,466
  State...............................................   (2,662)      (363)       313
  Foreign.............................................      541        804     (1,893)
                                                        -------    -------    -------
          Total deferred..............................   (6,358)    (5,005)      (114)
                                                        -------    -------    -------
          Total.......................................  $ 8,512    $   166    $13,462
                                                        =======    =======    =======
</TABLE>
 
     Sources of income (loss) before income taxes are as follows:
 
<TABLE>
<CAPTION>
                                                                  MAY 31,
                                                       ------------------------------
                                                        1998        1997       1996
                                                       -------    --------    -------
<S>                                                    <C>        <C>         <C>
Domestic.............................................  $(7,944)   $(33,768)   $12,617
Foreign..............................................   34,546      34,242     25,846
                                                       -------    --------    -------
          Total......................................  $26,602    $    474    $38,463
                                                       =======    ========    =======
</TABLE>
 
     The following provides a reconciliation of the statutory federal income tax
rate and provision (benefit) to the effective income tax rate and provision
(benefit):
 
<TABLE>
<CAPTION>
                                                     TWELVE MONTHS ENDED MAY 31,
                                           ------------------------------------------------
                                            1998      %     1997      %       1996      %
                                           -------   ----   -----   ------   -------   ----
<S>                                        <C>       <C>    <C>     <C>      <C>       <C>
Statutory federal income tax expense
  (benefit)..............................  $ 9,311   35.0   $ 166     35.0   $13,462   35.0
Increases (decreases) resulted from:
  Difference between foreign tax rate and
     federal rate........................   (1,147)  (4.3)   (540)  (113.9)   (1,314)  (3.4)
  State tax benefit, net of federal
     income tax effect...................     (328)  (1.2)   (159)   (33.5)      745    1.9
  Change in valuation allowance..........       --     --      --       --       (80)   (.2)
  Other..................................      676    2.5     699    147.4       649    1.7
                                           -------   ----   -----   ------   -------   ----
          Total..........................  $ 8,512   32.0   $ 166     35.0   $13,462   35.0
                                           =======   ====   =====   ======   =======   ====
</TABLE>
 
                                       F-9
<PAGE>   28
                             FRITZ COMPANIES, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     The significant components of net deferred income tax assets are as
follows:
 
<TABLE>
<CAPTION>
                                                                   MAY 31,
                                                              ------------------
                                                               1998       1997
                                                              -------    -------
<S>                                                           <C>        <C>
Deferred income tax assets:
Current:
  Compensated absences......................................  $ 1,913    $ 1,650
  Net operating loss carryforward...........................    1,721        919
  Foreign tax credits and other tax credits.................    2,511         --
  Capital loss carryforward.................................      600        600
  Allowance for doubtful accounts...........................    7,186      5,578
  Elimination of duplicate information systems and
     facilities.............................................      308        484
  Other reserves and accruals...............................    3,983      1,888
                                                              -------    -------
  Subtotal..................................................   18,222     11,119
Less: valuation allowance...................................   (1,244)      (600)
                                                              -------    -------
          Total current deferred income tax assets..........   16,978     10,519
                                                              -------    -------
Noncurrent:
  Deferred compensation.....................................    2,117      1,529
  Other reserves and accruals...............................    2,867      2,299
                                                              -------    -------
          Subtotal..........................................    4,984      3,828
                                                              -------    -------
          Total deferred income tax assets..................   21,962     14,347
                                                              -------    -------
Deferred income tax liabilities:
  Depreciation and amortization.............................   (1,585)    (1,243)
                                                              -------    -------
  Net deferred income tax assets............................  $20,377    $13,104
                                                              =======    =======
</TABLE>
 
     The valuation allowance for current deferred income tax assets as of May
31, 1998 and 1997 results from capital loss carryforwards and foreign tax
credits. The Company has evaluated the long-term deferred tax assets and
determined no valuation allowance is required as management believes it is more
likely than not the long-term deferred income tax assets will be realized in the
future.
 
     During the years ended May 31, 1998, 1997 and 1996 the Company maintained
its policy to reinvest the earnings of the non-United States subsidiaries as a
long-term commitment. Accordingly, the "Cumulative foreign currency translation
adjustments" included in the equity section of the balance sheets have not been
adjusted for US taxes. Undistributed earnings of the Company's foreign
subsidiaries amounted to approximately $155 million at May 31, 1998. Additional
United States income taxes may be due upon remittance of those earnings (net of
foreign tax). If all earnings were distributed, approximately $27 million would
be payable at May 31, 1998.
 
NOTE 5. RELATED PARTY TRANSACTIONS
 
     The Company has previously leased office space from the Company's Chairman
and Chief Executive Officer (the Chairman). The Company did not rent any
property from the Chairman during the current year; however, rental expense
applicable to previous leases was $263 and $758 for the years ended May 31, 1997
and 1996, respectively. No leases with the Chairman were in effect as of May 31,
1998.
 
     In connection with the Company's U.S. customs brokerage operations,
customers are required to obtain surety bonds. The Company places such customs
bonds with Intercargo Corporation (Intercargo) and other underwriters of customs
bonds. The Chairman owns approximately 3.1% of the outstanding common stock of
Intercargo. In 1998, 1997 and 1996 the Company placed approximately $4,343;
$4,400; and $2,800,
 
                                      F-10
<PAGE>   29
                             FRITZ COMPANIES, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
respectively, of insurance business with Intercargo and received approximately
$589; $373; $251, respectively, in insurance commissions and fees from
Intercargo. The Company believes the amounts paid and received are substantially
the same as the Company would have incurred and realized from other third
parties.
 
     The Company paid premiums until 1992 on life insurance policies on the
Chairman though the Company is not the beneficiary. Such cumulative premium
payments, which approximate surrender value, of $1,400 at May 31, 1998 and 1997,
are included in other assets. The premiums will be refunded by the beneficiary
upon death of the insured or cancellation of the policies, whichever comes
first. The Company has no future obligation to pay premiums on these policies.
 
NOTE 6. COMMITMENTS
 
     The Company leases office and warehouse space and computer and other office
equipment from third parties, including certain operating leases financed by
special purpose entities, under operating leases expiring through 2013. Minimum
future rental payments by the Company as of May 31, 1998 are as follows:
 
<TABLE>
<CAPTION>
                                                RENTAL     SUBLEASE    NET RENTAL
             YEAR ENDING MAY 31,               PAYMENTS     INCOME      PAYMENTS
             -------------------               --------    --------    ----------
<S>                                            <C>         <C>         <C>
     1999....................................  $ 37,739     $1,125      $ 36,614
     2000....................................    28,556        435        28,121
     2001....................................    20,801        288        20,513
     2002....................................    14,129        219        13,910
     2003....................................    11,975         93        11,882
     2004 and thereafter.....................    45,410        163        45,247
                                               --------     ------      --------
          Total..............................  $158,610     $2,323      $156,287
                                               ========     ======      ========
</TABLE>
 
     Net rental expense from these leases was as follows:
 
<TABLE>
<CAPTION>
                                                           MAY 31,
                                                -----------------------------
                                                 1998       1997       1996
                                                -------    -------    -------
<S>                                             <C>        <C>        <C>
Gross lease expense...........................  $54,453    $42,834    $37,547
Less sublease rental income...................   (2,603)    (2,336)    (1,630)
                                                -------    -------    -------
Net rental expense............................  $51,850    $40,498    $35,917
                                                =======    =======    =======
</TABLE>
 
NOTE 7. ACQUISITIONS
 
     Purchases: In 1998, the Company acquired the equity interest of a freight
forwarding company for an aggregate purchase price of approximately $1,552
through the issuance of 120 shares of the Company's stock. The acquired company
included current assets of approximately $6,413; fixed assets of approximately
$342 and assumed liabilities, which are primarily current in nature, of
approximately $6,659. An intangible asset of approximately $526 was recorded in
connection with the acquisition.
 
     In 1997, the Company acquired assets and remaining interests in several
freight forwarding companies for an aggregate purchase price of approximately
$10,000 consisting of cash of $8,600 and payable obligations of $1,400. Relative
to total 1997 acquisitions, the Company acquired current assets of approximately
$2,300; fixed assets of approximately $1,300 and assumed liabilities, which are
primarily current in nature, of approximately $2,200. Intangible assets of
approximately $8,200 were recorded in connection with those acquisitions which
are amortized on a straight line basis. The remainder was recorded to eliminate
the Company's minority interest payable.
 
                                      F-11
<PAGE>   30
                             FRITZ COMPANIES, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     In 1996, the Company acquired sixteen freight forwarding/customs brokers,
and purchased interests in thirteen companies for an aggregate purchase price of
$37,100 consisting of cash of approximately $27,100 and net obligations payable
of approximately $10,000. Relative to these acquisitions, the Company acquired
current assets of approximately $33,900, fixed assets of approximately $10,900;
non-current assets of approximately $4,700; current liabilities of approximately
$31,700 and non-current liabilities of approximately $4,900.
 
     The Company entered into certain acquisition agreements which have
provisions regarding contingent future payments. As of May 31, 1998,
approximately $3,600 of such future contingent payments exist which have not
been recorded by the Company and are dependent upon full achievement of
specified net revenue or pretax income levels.
 
     Intangible assets, including goodwill and covenants not to compete,
totaling approximately $2,936 and $24,600 were recorded in 1998 and 1997,
respectively, in connection with current and previous acquisitions. Cash
payments made during 1998 of $15,379 represent payments to reduce acquisition
debt payable and payments related to contingent purchase price. Amortization
expense for intangible assets was approximately $4,474, $4,700 and $4,000 in
1998, 1997, and 1996, respectively.
 
     The purchase method of accounting was used for all acquisitions made in
fiscal years presented herein. The operations of acquired companies are
reflected in the Company's consolidated financial statements from their
respective dates of acquisition.
 
     Pooling of interests: On May 30, 1995, the Company merged with Intertrans
Corporation (Intertrans), a provider of international air and ocean freight
forwarding, customs brokerage, and other consulting and transportation services.
The majority of Intertrans' business related to freight forwarding from the
United States to overseas destinations.
 
     In 1996, the Company recorded additional merger and related costs of
$14,600 associated with the Intertrans merger including approximately $2,800
representing additional severance payments as a result of the Company's decision
to eliminate approximately 0.2 additional employees at all levels in the
Company. As of May 31, 1997, the total severance had been paid.
 
NOTE 8. CONTINGENCIES
 
     The Company is party to routine litigation incident to its business,
primarily claims for goods lost or damaged in transit or improperly shipped.
Most of the lawsuits in which the Company is the defendant are covered by
insurance and are being defended by the Company's insurance carriers.
 
     In 1996, a total of six complaints were filed (three in federal court and
three in state court of California) against the Company and certain of its then
officers and directors, purporting to be brought on behalf of a class of
purchasers or holders of the Company's stock between August 28, 1995 and July
23, 1996. The complaints allege various violations of Federal Securities law and
California Corporate Securities law in connection with prior disclosures made by
the Company and seek unspecified damages.
 
     The three class action suits filed against the Company in state court were
dismissed with prejudice by the Superior Court of California for the County of
San Francisco on grounds the claims asserted under the California Corporate
Securities law and common law fraud were not legally tenable. One of the
dismissals has been reversed on appeal, permitting the plaintiff to file an
amended complaint.
 
     The three class action suits filed against the Company in federal court
were consolidated into one suit which was dismissed with prejudice, finding that
plaintiffs had not alleged any statement that was false and misleading in
violation of the federal securities laws. Plaintiffs have filed an appeal with
the Ninth Circuit Court of Appeals. That appeal is pending.
 
                                      F-12
<PAGE>   31
                             FRITZ COMPANIES, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     The Company is unable to predict the ultimate outcome of these suits and it
is possible the outcome could have a significant adverse impact on the Company's
future consolidated results of operations. However, the Company believes the
ultimate outcome of these matters will not have a significant adverse impact on
the Company's financial position or its results of operations.
 
NOTE 9. BUSINESS SEGMENT INFORMATION
 
     The Company operates in the international freight forwarding industry,
which encompasses customs brokerage, airfreight and ocean freight forwarding,
and warehousing and distribution. No single customer accounted for ten percent
or more of consolidated revenue.
 
     Certain information regarding the Company's operations by geographic areas
is summarized below:
 
<TABLE>
<CAPTION>
                                               NORTH                            LATIN      TOTAL
                                              AMERICA    FAR EAST    EUROPE    AMERICA   WORLDWIDE
                                              --------   --------   --------   -------   ----------
<S>                                           <C>        <C>        <C>        <C>       <C>
REVENUES:
1998........................................  $676,170   $327,008   $225,987   $70,918   $1,300,083
1997........................................   620,188    298,284    184,998    53,300    1,156,770
1996........................................   561,787    283,768    144,938    53,365    1,043,858
INCOME FROM OPERATIONS:
1998........................................  $  9,093   $  9,382   $  7,035   $   303   $   25,813
1997........................................     2,374      6,459      1,365    (7,340)       2,858
1996(a).....................................    26,928      7,520      5,235    (1,024)      38,659
IDENTIFIABLE ASSETS:
1998........................................  $465,357   $125,686   $113,453   $17,902   $  722,398
1997........................................   467,928    123,576    120,840    11,172      723,516
1996........................................   496,657     98,431    110,026    28,348      733,462
</TABLE>
 
---------------
 
(a) Includes approximately $14,600 of merger and related costs as discussed in
    Note 7 of Notes to Consolidated Financial Statements.
 
NOTE 10. COMMON STOCK (In thousands, except share and per share amounts)
 
     In October 1992, the Company established the 1992 Omnibus Equity Incentive
Plan ("1992 Plan"), pursuant to which an aggregate of 1,520,000 shares of common
stock was reserved for issuance to key employees of the Company. The 1992 Plan
was amended to increase the number of shares available for award by an
additional 1,520,000 and 1,500,000 shares of common stock in May 1994 and
October 1996, respectively. The 1992 Plan permits awards of non-qualified stock
options and incentive stock options within the meaning of Section 422 of the
Internal Revenue Code, as well as stock appreciation rights, restricted stock,
and performance awards entitling the recipient to receive cash or common stock
in the future following attainment of performance goals determined by the
committee administering the 1992 Plan.
 
     The majority of options granted under the Company's 1992 Plan are
exercisable one-third each on the day after the first, second and third
anniversary of the original grant. The majority of restricted stock vests 100%
on the day after the fifth or seventh anniversary of the original grant. Both
options and stock were granted at a price equal to fair market value on the
respective dates of grant except for 240,000 shares of options which were
granted at 90% of fair market value at date of grant. Total stock-based
compensation expense of approximately $3,520; $3,300; and $917 was recorded in
1998, 1997, and 1996, respectively.
 
                                      F-13
<PAGE>   32
                             FRITZ COMPANIES, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     Each employee stock option assumed by the Company under the Intertrans
merger agreement will continue to have and be subject to, the same terms and
conditions set forth in the relevant Intertrans stock option plans. The
Intertrans plans required stock options granted to key employees be at a price
not less than the stock's fair market value on the respective dates of grant.
The majority of options granted are exercisable one-third after first
anniversary date of the grant, two-thirds after two years and are fully
exercisable three years from date of grant. No options have been granted under
this plan since the merger on May 30, 1995.
 
     Effective February 1993, the Company adopted the Non-Employee Director
Restricted Stock Plan (Director Plan) with an aggregate of 50,000 shares of
common stock for issuance to outside directors as a portion of their annual
compensation, which vest six months from date of grant. Shares issued to outside
directors under the Director Plan were 4,468 and 2,490 during 1998 and 1997,
respectively. Separately, 1,200 restricted shares were granted in 1996 to
non-employee directors under the 1992 Plan and vest three years from date of
grant.
 
     The Company adopted SFAS No. 123, "Accounting for Stock-Based
Compensation," and exercised the election to continue to apply the provisions of
APB No. 25, "Accounting for Stock Issued to Employees," to its stock option
plans. Accordingly, compensation expense has only been recognized in the
Consolidated Statements of Operations in connection with the shares related to
options granted at 90% of fair market value on the respective dates of grant.
Compensation expense was $161; $161; and $161 in 1998, 1997, and 1996,
respectively. Had compensation expense of the Company's stock-based compensation
plans been determined using the fair value based method described in SFAS 123 in
1998, 1997 and 1996, the Company's pro forma net income and earnings per share
would have been:
 
<TABLE>
<CAPTION>
                                                      YEAR ENDED MAY 31,
                                                  ---------------------------
                                                   1998      1997      1996
                                                  -------    -----    -------
<S>                                               <C>        <C>      <C>
NET INCOME:
     As reported................................  $18,090    $ 308    $25,001
     Pro forma..................................  $17,180    $(192)   $24,614
                                                  -------    -----    -------
EARNINGS PER SHARE:
     Basic --
       As reported..............................  $   .51    $ .01    $   .73
       Pro forma................................  $   .48    $(.01)   $   .72
                                                  -------    -----    -------
     Diluted --
       As reported..............................  $   .50    $ .01    $   .71
       Pro forma................................  $   .48    $(.01)   $   .70
                                                  -------    -----    -------
</TABLE>
 
     The fair value of each option grant is estimated based on the date of grant
using the Black-Scholes option-pricing model with the following weighted-average
assumptions:
 
<TABLE>
<CAPTION>
                                                      TWELVE MONTHS ENDED MAY
                                                                31,
                                                      -----------------------
                                                      1998     1997     1996
                                                      -----    -----    -----
<S>                                                   <C>      <C>      <C>
Expected volatility.................................  40.00%   40.00%   40.00%
Risk-free interest rates for terms of:
  2 years...........................................   5.71%    6.45%    5.84%
  3 years...........................................   5.81%    6.60%    5.95%
  4 years...........................................   5.86%    6.66%    6.01%
Dividend yield......................................      0        0        0
Expected option life in years.......................      1        1        1
</TABLE>
 
                                      F-14
<PAGE>   33
                             FRITZ COMPANIES, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     Stock option activity was as follows:
 
<TABLE>
<CAPTION>
                                                      TWELVE MONTHS ENDED MAY 31,
                                                 --------------------------------------
                                                    1998          1997          1996
                                                 ----------    ----------    ----------
<S>                                              <C>           <C>           <C>
Outstanding, beginning of period...............   1,509,000     2,135,000     1,680,000
Stock split....................................          --            --     1,119,000
Granted........................................     660,000       300,000       327,000
Canceled.......................................    (158,000)     (761,000)      (64,000)
Exercised......................................     (51,000)     (165,000)     (927,000)
                                                 ----------    ----------    ----------
Outstanding, end of period.....................   1,960,000     1,509,000     2,135,000
                                                 ==========    ==========    ==========
Options exercisable............................   1,115,000     1,137,000     1,228,000
                                                 ==========    ==========    ==========
Restricted stock activity
Outstanding, beginning of period...............     372,000       320,000        56,000
Stock split....................................          --            --        55,000
Granted........................................     187,000        69,000       212,000
Canceled.......................................     (20,000)      (17,000)       (3,000)
                                                 ----------    ----------    ----------
Outstanding, end of period.....................     539,000       372,000       320,000
                                                 ==========    ==========    ==========
Restricted stock exercisable...................     184,000        67,000         3,000
                                                 ==========    ==========    ==========
Weighted Average Exercise Price:
Outstanding, beginning of period...............  $    13.25    $    16.96    $    14.04
Granted........................................       10.39          8.86         25.42
Canceled.......................................       14.74         21.68         18.80
Exercised......................................        7.90         14.21         11.54
Outstanding, end of period.....................       12.04         13.25         16.96
Weighted average fair value of options
  granted......................................  $     3.60    $     3.17    $     9.80
                                                 ==========    ==========    ==========
</TABLE>
 
     The relevant information regarding stock options outstanding at May 31,
1998:
 
<TABLE>
<CAPTION>
                       OPTIONS OUTSTANDING                               OPTIONS EXERCISABLE
-----------------------------------------------------------------   -----------------------------
                    NUMBER      WEIGHTED AVERAGE      WEIGHTED         NUMBER         WEIGHTED
   RANGE OF      OUTSTANDING       REMAINING          AVERAGE       EXERCISABLE       AVERAGE
EXERCISE PRICE   MAY 31, 1998   CONTRACTUAL LIFE   EXERCISE PRICE   MAY 31, 1998   EXERCISE PRICE
---------------  ------------   ----------------   --------------   ------------   --------------
<S>              <C>            <C>                <C>              <C>            <C>
$ 6.85 to  8.13     439,000        6.7 years           $ 7.83          279,000         $ 7.66
  8.50 to 10.06      41,000        6.6 years             9.31           18,000           9.57
          10.13     543,000        9.2 years            10.13               --             --
 10.56 to 11.88      73,000        7.9 years            11.23           20,000          11.00
 12.04 to 28.63     864,000        6.0 years            15.57          798,000          15.56
                  ---------                                          ---------
$ 6.85 to 28.63   1,960,000        7.1 years           $12.04        1,115,000         $13.40
                  =========        =========           ======        =========         ======
</TABLE>
 
     The number of shares available for issuance under the 1992 Plan as of May
31, 1998 was 1,132,895 shares.
 
     On April 25, 1997, the Company conducted a discretionary repricing exchange
program for all options issued under the 1992 Omnibus Equity Incentive Plan,
other than those issued to certain senior officers. Options issued under
Intertrans stock option plans were not eligible for repricing. Under the terms
of the program, option holders could elect to exchange outstanding options for
half of that number of options at an option price equal to fair market value on
April 25, 1997. Fair market value as of that date was $8.125 per
 
                                      F-15
<PAGE>   34
                             FRITZ COMPANIES, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
share. A total of 482,000 previously issued options were exchanged for 241,000
new options issued in connection with the program.
 
     The Company initiated a three-year stock retention program whereby selected
managers and administrative personnel were awarded a total of 33,192 shares
effective September 1, 1996 and 27,036 shares effective July 31, 1997 at no cost
to the employee. The employees receiving the stock award would be entitled to a
final stock grant of approximately 27,000 shares effective July 31, 1998,
provided they maintain their employee status as of July 31, 1998.
 
     Effective July 1, 1996, the Company adopted an Employee Stock Purchase Plan
(ESPP). A maximum of 200,000 shares of common stock is available for issuance
pursuant to the ESPP. To be eligible to participate in the Plan an employee must
have completed one year of service and have been scheduled to work more than
twenty hours per week. Certain highly compensated employees may be excluded from
participation at the discretion of the Compensation Committee of the Board of
Directors.
 
     The ESPP purchases stock based on the lower of 100% of market value on the
business day preceding the first day of the quarter in which the stock is
purchased or 90% of the average closing price on the pre-set, quarterly purchase
date. Approximately 14.1% of eligible employees have participated in the Plan
since its inception. During 1998 the Company sold shares at a weighted average
issue price of $10.84.
 
     Under SFAS 123, compensation expense is recognized for the fair value of
the employees' purchase rights if the discount from market price is greater than
5%. This was estimated using the Black-Scholes option-pricing model with the
following assumptions for 1998: expected volatility -- 40%; weighted average
risk-free interest rate -- 5.18%; dividend yield -- zero; and purchase term -- 3
months. The weighted average fair value of those purchase rights granted in 1998
was $87. This compensation cost has been included in calculating the pro forma
net income and earnings per share.
 
NOTE 11. RETIREMENT PLAN
 
     The Company has a 401(k) retirement plan covering substantially all U.S.
employees. The Company has recorded matching contributions in the amount of
$689; $594; and $540 in 1998, 1997, and 1996, respectively.
 
NOTE 12. QUARTERLY FINANCIAL DATA (UNAUDITED)
 
     The following table sets forth selected quarterly financial data for the
years ended May 31, 1998 and 1997:
 
<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED
                                       ------------------------------------------------------
                                       AUGUST 31,    NOVEMBER 31,    FEBRUARY 28,    MAY 31,
                                          1997           1997            1998          1998
                                       ----------    ------------    ------------    --------
<S>                                    <C>           <C>             <C>             <C>
Revenue..............................   $326,699       $343,611        $307,210      $322,563
Net revenue..........................    139,239        145,164         132,282       141,582
Income from operations...............      6,723         10,546           1,672         6,872
Net income...........................      3,806          6,885           2,636         4,763
Net income per share -- Basic........        .11            .19             .07           .13
Net income per share -- Diluted......        .11            .19             .07           .13
</TABLE>
 
                                      F-16
<PAGE>   35
                             FRITZ COMPANIES, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED
                                       ------------------------------------------------------
                                       AUGUST 31,    NOVEMBER 30,    FEBRUARY 28,    MAY 31,
                                          1996           1996            1997          1997
                                       ----------    ------------    ------------    --------
<S>                                    <C>           <C>             <C>             <C>
Revenue..............................   $270,490       $306,464        $270,341      $309,475
Net Revenue..........................    129,717        130,777         117,971       130,906
Income from operations...............     12,363         14,699         (24,728)          524
Net income (loss)....................      7,791          9,255         (16,831)           93
Net income (loss) per
  share -- Basic.....................        .22            .26            (.48)           --
Net income (loss) per
  share -- Diluted...................        .22            .26            (.48)           --
</TABLE>
 
                                      F-17
<PAGE>   36
 
                          INDEPENDENT AUDITORS' REPORT
 
Board of Directors and Stockholders
Fritz Companies, Inc.:
 
     We have audited the accompanying consolidated balance sheets of Fritz
Companies, Inc. and subsidiaries as of May 31, 1998 and 1997, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the years in the three-year period ended May 31, 1998. In connection
with our audits of the consolidated financial statements, we also audited the
related consolidated Financial Statement Schedule II as of and for the years
ended May 31, 1998, 1997 and 1996. These consolidated financial statements and
financial statement schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.
 
     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
     In our opinion, such consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Fritz
Companies, Inc. and subsidiaries as of May 31, 1998 and 1997, and the results of
their operations and their cash flows for each of the years in the three-year
period ended May 31, 1998, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.
 
KPMG Peat Marwick LLP
San Francisco, California
June 30, 1998
 
                                      F-18
<PAGE>   37
 
                                  SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS
                FOR THE YEARS ENDED MAY 31, 1998, 1997 AND 1996
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                          NET WRITE-OFFS
                                                   BALANCE                   CHARGED
                                                  BEGINNING    CHARGES     TO RESERVES     BALANCE AT END
                                                  OF PERIOD   TO INCOME     AND OTHER        OF PERIOD
                                                  ---------   ---------   --------------   --------------
<S>                                               <C>         <C>         <C>              <C>
FOR THE YEAR ENDED MAY 31, 1998
  Allowance for doubtful accounts...............   $22,292     $ 8,740       $(7,800)         $23,232
                                                   =======     =======       =======          =======
FOR THE YEAR ENDED MAY 31, 1997
  Allowance for doubtful accounts...............   $ 6,401     $23,786       $(7,895)         $22,292
                                                   =======     =======       =======          =======
FOR THE YEAR ENDED MAY 31, 1996
  Allowance for doubtful accounts...............   $ 4,512     $ 5,583       $(3,694)         $ 6,401
                                                   =======     =======       =======          =======
</TABLE>
 
                                      F-19
<PAGE>   38
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
EXHIBIT                                                                    PAGE
-------                                                                    ----
<S>        <C>                                                             <C>
 2.1       Agreement and Plan of Reorganization entered by and among
           the Registrant, Fritz Air Freight and Intertrans Corporation
           and Amendment No. 1 thereto dated as of April 12, 1995.
           (Incorporated by reference to Exhibit 2.1 to Form 8-K dated
           February 14, 1995 filed on or about February 21, 1995 and to
           Appendix A to the Joint Proxy Statement/Prospectus filed on
           or about April 13, 1995, respectively.).....................
 3.1       Registrant's Restated Certificate of Incorporation.
           (Incorporated by reference to Exhibit 3.1 to Registration
           Statement No. 33-50808, filed on August 17, 1992.)..........
 3.2       Registrant's Bylaws, as heretofore amended. (Incorporated by
           reference to Exhibit 3.2 to Registration Statement No.
           33-50808, filed on August 17, 1992.)........................
 3.2.1     Amendment to Article II, Section 1(b) of Registrant's
           Bylaws. (Incorporated by reference to Exhibit 3.2.1 to
           Registration Statement No. 33-50808, filed on August 17,
           1992.)......................................................
 4.1       Specimen certificate of Registrant's Common Stock.
           (Incorporated by reference to Exhibit 4.1 to Registration
           Statement No. 33-50808, filed on August 17, 1992.)..........
10.1       Multicurrency Credit Agreement among the Registrant, several
           financial Institutions which are from time to time parties
           to this Agreement (collectively, the "Banks"; individually,
           a "Bank"), and Bank of America National Trust and Savings
           Association, as letter of credit issuing bank, swingline
           bank, and agent for the Banks dated as of December 15, 1995.
           (Incorporated by reference to Exhibit 10.1 to Registrant's
           Form 10-Q for the quarter ended February 29, 1996.).........
10.1.1     First Amendment to First Amended and Restated Credit
           Agreement between Registrant and Bank of America National
           Trust and Savings Association dated as of September 23,
           1994. (Incorporated by reference to Exhibit 10.1.1 to Form
           10-Q for the quarter ended September 30, 1994.).............
10.1.2     Third Amendment to First Amended and Restated Credit
           Agreement between Registrant and Bank of America National
           Trust and Savings Association dated as of August 30, 1995.
           (Incorporated by reference to Exhibit 10.1.2 to Form 10-Q
           for the quarter ended August 31, 1995.).....................
10.1.3     Fourth Amendment to First Amended and Restated Credit
           Agreement between Registrant and Bank of America National
           Trust and Savings Association dated as of September 14,
           1995. (Incorporated by reference to Exhibit 10.1.3 to Form
           10-Q for the quarter ended August 31, 1995.)................
10.1.4     Third Amendment to Multicurrency Credit Agreement between
           Registrant and Bank of America National Trust and Savings
           Association dated as of February 28, 1997. (Incorporated by
           reference to Exhibit 10.1 to Form 10-Q for the quarter ended
           February 28, 1997.).........................................
10.2       Credit Agreement between Registrant and Bank of America
           National Trust and Savings Association dated as of December
           15, 1995. (Incorporated by reference to Exhibit 10.1 to
           Registrant's Form 10-Q for the quarter ended February 29,
           1996.)......................................................
10.3       First Amendment to Credit Agreement between Registrant and
           Bank of America National Trust and Savings Association dated
           as of February 28, 1996. (Incorporated by reference to
           Exhibit 10.1 to Registrant's Form 10-Q for the quarter ended
           February 29, 1996.).........................................
10.4       Service Agreement dated February 25, 1992 between Federal
           Express Corporation and the Registrant. (Incorporated by
           reference to Exhibit 10.4 to Registration Statement No.
           33-50808, filed on August 17, 1992.)........................
</TABLE>
 
                                      F-20
<PAGE>   39
 
<TABLE>
<CAPTION>
EXHIBIT                                                                    PAGE
-------                                                                    ----
<S>        <C>                                                             <C>
10.5       Customs Brokerage Service Agreement dated February 28, 1992
           between Federal Express Corporation and the Registrant.
           (Incorporated by reference to Exhibit 10.5 to Registration
           Statement No. 33-70674, filed October 22, 1993.)*...........
10.6       Subchapter S Termination Agreement between Registrant and
           Lynn C. Fritz. (Incorporated by reference to Exhibit 10.6 to
           Registration Statement No. 33-50808, filed on August 17,
           1992.)......................................................
10.7       Form of Indemnification Agreement between Registrant and
           Lynn C. Fritz. (Incorporated by reference to Exhibit 10.7 to
           Registration Statement No. 33-50808, filed on August 17,
           1992.)......................................................
10.8       Fritz Companies, Inc. Salary Investment and Retirement Plan,
           and amendments thereto. (Incorporated by reference to
           Exhibit 10.8 to Registration Statement No. 33-50808, filed
           on August 17, 1992.)*.......................................
10.9       1992 Omnibus Equity Incentive Plan, as amended.
           (Incorporated by reference to Exhibit 10.9 to Registration
           Statement No. 33-50808, filed on August 17, 1992.)*.........
10.10      Contract of Sale between the Registrant and Sanjaylyn
           Company dated as of March 1, 1985. (Incorporated by
           reference to Exhibit 10.10 to Registration Statement No. 33-
           50808, filed on August 17, 1992.)...........................
10.11      Employment and Deferred Compensation Agreement between the
           Registrant and Arthur J. Fritz, Sr. dated as of January 1,
           1983, and amendment thereto dated as of July 31, 1989.
           (Incorporated by reference to Exhibit 10.11 to Registration
           Statement No. 33-50808, filed on August 17, 1992.)..........
10.12      Lease Agreement between the Registrant and Sanjaylyn
           Company, dated June 14, 1991, and Addendum to Lease
           Agreement dated December 1, 1991. (Incorporated by reference
           to Exhibit 10.12 to Registration Statement No. 33-50808,
           filed August 17, 1992.).....................................
10.13      Lease Agreement between the Registrant and Sanjaylyn
           Company, dated July 2 1991. (Incorporated by reference to
           Exhibit 10.13 to Registration Statement No. 33-50808, filed
           on August 17, 1992.)........................................
10.14      Memorandum Lease between Registrant and Sanjaylyn Company,
           effective April 1, 1979, and Addendum to Lease Agreement,
           dated February 14, 1990. (Incorporated by reference to
           Exhibit 10.14 to Registration Statement No. 33-50808, filed
           on August 17, 1992.)........................................
10.15      Lease Agreement between Registrant and Sanjaylyn Company,
           dated February 22, 1991. (Incorporated by reference to
           Exhibit 10.15 to Registration Statement No. 33-50808, filed
           on August 17, 1992.)........................................
10.16      Nonemployee Director Restricted Stock Plan. (Incorporated by
           reference to Exhibit A to the definitive proxy materials of
           Registrant, filed on or about April 10, 1993.)*.............
10.17      Lease Agreement between Registrant and Lynn C. Fritz, dated
           September 1, 1993. (Incorporated by reference to Exhibit
           10.17 to Registration Statement No. 33-70674, filed on
           October 22, 1993.)..........................................
10.18      Lease Agreement between Registrant and Lynn C. Fritz, dated
           October 4, 1993. (Incorporated by reference to Exhibit 10.18
           to Form 10-K for the year ended December 31, 1993.).........
10.19      Withdrawal Agreement between Arthur J. Fritz, Jr. and Sandra
           F. Davis, Lynn C. Fritz and Sanjaylyn Company, dated March
           31, 1993. (Incorporated by reference to Exhibit 10.18 to
           Registration Statement No. 33-70674, filed on October 22,
           1993.)......................................................
</TABLE>
 
                                      F-21
<PAGE>   40
 
<TABLE>
<CAPTION>
EXHIBIT                                                                    PAGE
-------                                                                    ----
<S>        <C>                                                             <C>
10.20      Customs Service Agreement dated February 28, 1994 between
           Federal Express Corporation and the Registrant.
           (Incorporated by reference to Exhibit 10.20 to Form 10-K for
           the year ended December 31, 1993.)..........................
10.21      Employment Agreement between Registrant and Dennis Pelino
           dated June 1, 1995. (Incorporated by reference to Exhibit
           10.21 to Form 10-Q for the quarter ended August 31,
           1995.)......................................................
10.22      Purchase Agreement between Registrant and Gestion J.L.G.,
           Inc. dated as of April 29, 1994. (Incorporated by reference
           to Exhibit 1.2 to Form 8-K dated May 2, 1994 filed on or
           about May 16, 1994.)........................................
10.23      Addendum to the purchase agreements between the Registrant
           and Gestion J.L.G., Inc. dated as of April 26, 1994.
           (Incorporated by reference to Exhibit 10.23 to Form 10-Q for
           the quarter ended September 30, 1994.)......................
10.24      Note Purchase Agreement between the Registrant and various
           other parties dated April 15, 1996 for $75,000,000 of 6.43%
           notes due April 15, 2003. (Incorporated by reference to
           Exhibit 10.24 to Form 10-K for the year ended May 31,
           1996.)......................................................
10.25      First Amendment dated as of July 3, 1996 among the
           Registrant, the several financial institutions
           (collectively, the "Banks"; individually, a "Bank") party to
           the Multicurrency Credit Agreement, dated as of December 15,
           1995, among the Registrant, the Banks, and Bank of America
           National Trust and Savings Association, as agent for the
           Banks. (Incorporated by reference to Exhibit 10.25 to From
           10-K for the year ended May 31, 1996.)......................
10.26      Second Amendment Agreement, dated as of May 31, 1996 among
           the Registrant the several financial institutions
           (collectively, the "Banks"; individually, a "Bank") party to
           the Multicurrency Credit Agreement, dated as of December 15,
           1995, as amended, among the Registrant, the Banks, and Bank
           of America National Trust and Savings Association, as agent
           for the Banks. (Incorporated by reference to Exhibit 10.26
           to Form 10-K for the year ended May 31, 1996.)..............
10.27      Fritz Companies, Inc. Employee Stock Purchase Plan.
           (Incorporated by reference to Exhibit 10.26 to the
           Registration Statement on Form S-8 No. 33-07639 filed on
           July 3, 1996.)..............................................
10.28      Employment and Performance Based Retention Plan between the
           Registrant and Dennis L. Pelino dated as of October 31,
           1996. (Incorporated by reference to Exhibit 10.28 to Form
           10-Q for the quarter ended November 30, 1996.)**............
10.29      Employment between the Registrant and Ronald W. Womack dated
           as of October 2, 1996. (Incorporated by reference to Exhibit
           10.29 to Form 10-Q for the quarter ended November 30,
           1996.)......................................................
10.30      Term Loan Facility agreement dated June 18, 1997 between
           Standard Chartered Bank and the Registrant totaling $13.9
           million (denominated in Singapore dollars), maturity is five
           years from date of agreement, payments are scheduled
           quarterly beginning thirty-nine months from the date of the
           agreement, interest rate equivalent to the Singapore
           Interbank Offer Rate (SIBOR) plus 50 to 70 basis points
           depending on the amount borrowed, and is collateralized by
           certain property owned by the Company.......................
10.31      Syndicated multi-currency credit facility agreement dated
           March 27, 1998 for $100 million maturing on March 27,
           2001........................................................
10.32      First Amendment Agreement dated March 1, 1998 to the Note
           Purchase Agreement dated April 15, 1996 for $75 million of
           6.43% senior notes due April 15, 2003.......................
11.1       Statement regarding computation of per share earnings.......
22.1       Subsidiaries of the Registrant..............................
</TABLE>
 
                                      F-22
<PAGE>   41
 
<TABLE>
<CAPTION>
EXHIBIT                                                                    PAGE
-------                                                                    ----
<S>        <C>                                                             <C>
23.1       Consent of KPMG Peat Marwick LLP on Form S-8 Registration
           Statement No. 33-57238, 33-78472, 33-93070, 333-15921 and
           333-07639, and on Form S-4 Registration Statement No.
           33-70674....................................................
27         Financial Data Schedule.....................................
</TABLE>
 
---------------
*  Indicates, as required by Item 14(a)(3), a management contract of
   compensatory plan required to be filed as an exhibit to this Form 10-K.
 
** Confidential Treatment is being requested for portions of this Exhibit.
 
                                      F-23