LONG BEACH, Calif., June 2, 2011 (GLOBE NEWSWIRE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported financial results for its fiscal 2012 first quarter ended April 30, 2011.
Fiscal First Quarter 2012 vs. 2011 Results:
- Revenues were $1,198.7 million, an increase of 14 percent from $1,055.2 million.
- Net revenues (revenues minus purchased transportation costs) were $410.6 million, an increase of 12 percent from $365.7 million.
- Net income attributable to UTi Worldwide Inc. was $8.7 million, or $0.08 per diluted share, in the first quarter of fiscal 2012.
- Transformation and facility exit costs totaled $6.5 million, or $4.6 million after taxes, in the first quarter of fiscal 2012.
- Excluding these costs, adjusted net income attributable to UTi Worldwide Inc. was $13.3 million, or $0.13 per diluted share, compared to $10.1 million, or $0.10 per diluted share.
Eric W. Kirchner, chief executive officer, said, "Net revenues in the fiscal 2012 first quarter increased over the same period last year primarily because of higher airfreight volumes and contract logistics activity. Airfreight volumes were strong as we continued to win new business in an improved market. Contract logistics and distribution revenues were higher in the first quarter due to an increase in existing business activity and new business. Net revenue per unit of cargo also increased in the first quarter, reflecting declines in carrier spot rates compared to the same period last year. Operating expenses in the fiscal 2012 first quarter included transformation-related costs as well as costs associated with the exit of certain underutilized contract logistics facilities in Europe. We view these actions as important steps toward achieving our long-term targets."
Revenues increased 13.6 percent in the 2012 fiscal first quarter compared to the prior-year first quarter primarily due to increased airfreight volumes, higher fuel surcharges, which the company passes through to clients, and greater contract logistics activity. Net revenues increased 12.3 percent in the first quarter primarily due to increased volumes and higher net revenue per unit of cargo. Currency trends positively impacted both revenue and net revenue in the first quarter. On an organic, constant currency basis, adjusted net revenues increased 7.9 percent compared to the first quarter last year.
Operating expenses in the first quarter of fiscal 2012, excluding purchased transportation costs, were $391.8 million. The fiscal 2012 first quarter operating expenses include transformation costs of $3.6 million comprising severance of $2.0 million and costs related to the company's new financial system of $1.6 million. In addition, the company recorded $2.9 million in severance and facility exit costs relating to the closure of underutilized contract logistics facilities in Europe described above. Excluding these items, which total $6.5 million, adjusted operating expenses in the fiscal 2012 first quarter were $385.3 million, an increase of 11.1 percent compared to the same period last year. On an organic, constant currency basis, adjusted operating expenses in the fiscal 2012 first quarter were 6.9 percent higher than the same period last year.
The company reported operating income in the fiscal 2012 first quarter of $18.8 million. Excluding the transformation and facility exit costs of $6.5 million described above, adjusted operating income was $25.3 million, which represented 6.2 percent of net revenues. This compares to operating income in the year-ago first quarter of $19.0 million, or 5.2 percent of net revenues. The adjusted operating income and margin increases primarily reflect the higher volumes and net revenue per unit of cargo improvement in freight forwarding, as well as increased volumes in contract logistics compared to the same period last year.
Investor Conference Call:
UTi management will host an investor conference call today, June 2, 2011, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company's financial results for the fiscal 2012 first quarter. Investment professionals are invited to participate in the live call by dialing 800-762-8779 (domestic) or 480-629-9771 (international) using conference ID 4438598. The call will be open to all interested investors through a live, listen-only audio Internet broadcast at www.go2uti.com and www.earnings.com. For those who are not available to listen to the live broadcast, the call will be archived for one year at both Web sites. A telephonic playback of the conference call also will be available from approximately 11:00 a.m. PDT, today, through June 5, 2011, by calling 800-406-7325 (domestic) or 303-590-3030 (international) and using replay passcode 4438598.
About UTi Worldwide:
UTi Worldwide Inc. is an international, non-asset-based supply chain services and solutions company providing air and ocean freight forwarding, contract logistics, customs brokerage, distribution, inbound logistics, truckload brokerage and other supply chain management services. The company serves a large and diverse base of global and local companies, including clients operating in industries with unique supply chain requirements such as the pharmaceutical, retail, apparel, chemical, automotive and technology industries. The company seeks to use its global network, proprietary information technology systems, relationships with transportation providers, and expertise in outsourced logistics services to deliver competitive advantage to each of its clients' supply chains.
Use of Non-GAAP Financial Information:
This press release includes "non-GAAP financial measures" within the meaning of the Securities and Exchange Commission rules. UTi believes that meaningful analysis of its financial performance requires an understanding of the factors underlying that performance and the company's judgments about the likelihood that particular factors will repeat. Short-term patterns and long-term trends may be obscured by the impact of certain items. For this reason, the company has referred to adjusted operating expenses, which are adjusted to exclude purchased transportation costs, as well as transformation and facility exit costs, and to adjusted net income and adjusted operating income, which are adjusted to exclude transformation and facility exit costs. The company also has referred to organic, constant-currency revenue and net revenue growth, which are adjusted to exclude the impact of acquisitions made since the beginning of the comparative period and the impact of currency fluctuations between comparable periods; and to organic, constant-currency adjusted operating expenses, which are adjusted to exclude purchased transportation costs, the impact of acquisitions made since the beginning of the comparative period and the impact of currency fluctuations between comparable periods. This information is among the information the company uses as a basis for evaluating company performance on a comparable basis over time, allocating resources and planning and forecasting of future periods. The company has also provided this information because such adjustments make performance information more comparable to prior disclosures for investors, and may enhance the ability of investors to analyze the company's performance. This information is not intended to be considered in isolation or as a substitute for, or superior to, the relevant measures prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the tables at the end of this press release.
Safe Harbor Statement:
Certain statements in this news release may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The company intends that all such statements be subject to the "safe-harbor" provisions contained in those sections. Such forward-looking statements may include, but are not limited to, the statements about the future impact of the company's efforts to exit certain underutilized contract logistics facilities on the company's margins, the outlook for the future and other statements not of an historical nature. Many important factors may cause the company's actual results to differ materially from those discussed in any such forward-looking statements, including but not limited to the economic volatility that has materially impacted trade volumes, transportation capacity, pricing dynamics and overall margins; the financial condition of many of the company's customers; planned or unplanned consequences of the company's sales initiatives, procurement initiatives and business transformation efforts; the demand for the company's services; the impact and related costs associated with reorganization efforts and/or cost reduction measures undertaken by the company; increased competition; the impact of volatile fuel costs and changes in foreign exchange rates; changes in the company's effective tax rates; industry consolidation making it more difficult to compete against larger companies; general economic, political and market conditions, including those in Africa, Asia and EMENA; work stoppages or slowdowns or other material interruptions in transportation services; risks of international operations; risks associated with, and costs and expenses the company will incur as a result of, the ongoing publicly announced U.S. Department of Justice and other governmental investigations into the pricing practices of the air cargo transportation industry and other similar or related investigations and lawsuits; disruptions caused by epidemics, natural disasters, conflicts, wars and terrorism; and the other risks and uncertainties described in "Risk Factors" and "Forward-looking Statements" in the company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and described in the company's other filings with the Securities and Exchange Commission. Although UTi believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, the company cannot assure the reader that the results contemplated in forward-looking statements will be realized in the timeframe anticipated or at all. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by UTi or any other person that UTi's objectives or plans will be achieved. Accordingly, investors are cautioned not to place undue reliance on the company's forward-looking statements. UTi undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
(Tables Follow)
| UTi Worldwide Inc. | ||
| Condensed Consolidated Statements of Income | ||
| (in thousands, except share and per share amounts) | ||
| Three months ended April 30, | ||
| 2011 | 2010 | |
| Revenues: | (Unaudited) | (Unaudited) |
| Airfreight forwarding | $ 439,029 | $ 367,692 |
| Ocean freight forwarding | 281,578 | 271,832 |
| Customs brokerage | 30,253 | 25,435 |
| Contract logistics | 198,979 | 177,010 |
| Distribution | 129,353 | 117,374 |
| Other | 119,513 | 95,813 |
| Total revenues | 1,198,705 | 1,055,156 |
| Operating expenses: | ||
| Purchased transportation costs: | ||
| Airfreight forwarding | 350,177 | 293,542 |
| Ocean freight forwarding | 234,235 | 227,186 |
| Customs brokerage | 1,554 | 1,570 |
| Contract logistics | 45,153 | 35,723 |
| Distribution | 87,859 | 79,117 |
| Other | 69,150 | 52,270 |
| Staff costs | 233,345 | 207,001 |
| Depreciation | 12,441 | 11,412 |
| Amortization of intangible assets | 3,455 | 3,344 |
| Severance and restructuring charges | 4,849 | — |
| Other operating expenses | 137,694 | 125,039 |
| Total operating expenses | 1,179,912 | 1,036,204 |
| Operating income | 18,793 | 18,952 |
| Interest expense, net | (4,224) | (4,119) |
| Other income, net | 176 | 844 |
| Pretax income | 14,745 | 15,677 |
| Provision for income taxes | 4,235 | 4,936 |
| Net income | 10,510 | 10,741 |
| Net income attributable to noncontrolling interests | 1,767 | 667 |
| Net income attributable to UTi Worldwide Inc. | $ 8,743 | $ 10,074 |
|
Basic earnings per common share attributable to UTi Worldwide Inc. common shareholders |
$ 0.09 |
$ 0.10 |
|
Diluted earnings per common share attributable to UTi Worldwide Inc. common shareholders |
$ 0.08 |
$ 0.10 |
|
Number of weighted-average common shares outstanding used for per share calculations |
||
| Basic shares | 102,110,811 | 100,071,923 |
| Diluted shares | 104,015,880 | 101,528,328 |
| UTi Worldwide Inc. | |||
| Condensed Consolidated Balance Sheets | |||
| (in thousands) | |||
|
April 30, 2011 |
January 31, 2011 |
||
| (Unaudited) | |||
| Assets | |||
| Cash and cash equivalents | $ 304,997 | $ 326,795 | |
| Trade receivables, net | 1,027,723 | 879,842 | |
| Deferred income taxes | 22,238 | 20,400 | |
| Other current assets | 141,874 | 131,295 | |
| Total current assets | 1,496,832 | 1,358,332 | |
| Property, plant and equipment, net | 205,014 | 175,700 | |
| Goodwill and other intangible assets, net | 537,522 | 515,578 | |
| Investments | 1,159 | 1,102 | |
| Deferred income taxes | 31,093 | 29,526 | |
| Other non-current assets | 36,293 | 32,467 | |
| Total assets | $ 2,307,913 | $ 2,112,705 | |
| Liabilities & Equity | |||
| Bank lines of credit | $ 198,910 | $ 170,732 | |
| Short-term borrowings | 7,724 | 7,238 | |
| Current portion of long-term borrowings | 43,448 | 34,232 | |
| Current portion of capital lease obligations | 16,673 | 16,232 | |
| Trade payables and other accrued liabilities | 907,755 | 822,887 | |
| Income taxes payable | 8,819 | 8,521 | |
| Deferred income taxes | 3,976 | 3,881 | |
| Total current liabilities | 1,187,305 | 1,063,723 | |
| Long-term borrowings, excluding current portion | 72,160 | 61,230 | |
| Capital lease obligations, excluding current portion | 19,179 | 19,158 | |
| Deferred income taxes | 31,047 | 30,487 | |
| Other non-current liabilities | 39,377 | 37,943 | |
| Commitments and contingencies | |||
| UTi Worldwide Inc. shareholders' equity: | |||
| Common stock | 489,193 | 484,884 | |
| Retained earnings | 446,050 | 437,307 | |
| Accumulated other comprehensive income/(loss) | 7,879 | (35,116) | |
| Total UTi Worldwide Inc. shareholders' equity | 943,122 | 887,075 | |
| Noncontrolling interests | 15,723 | 13,089 | |
| Total equity | 958,845 | 900,164 | |
| Total liabilities and equity | $ 2,307,913 | $ 2,112,705 | |
| UTi Worldwide Inc. | ||
| Condensed Consolidated Statements of Cash Flows | ||
| (in thousands) | ||
|
Three months ended April 30, |
||
| 2011 | 2010 | |
| (Unaudited) | ||
| Operating Activities: | ||
| Net income | $ 10,510 | $ 10,741 |
|
Adjustments to reconcile net income to net cash used in operating activities: |
||
| Share-based compensation costs, net | 3,698 | 1,683 |
| Depreciation | 12,441 | 11,412 |
| Amortization of intangible assets | 3,455 | 3,344 |
| Amortization of debt issuance costs | 782 | 713 |
| Deferred income taxes | (1,717) | (859) |
| Uncertain tax positions | 168 | 145 |
| Excess tax benefit from share-based compensation | (398) | (251) |
| Loss on disposal of property, plant and equipment | 54 | 32 |
| Provision for doubtful accounts | 1,089 | 730 |
| Other | 398 | 239 |
| Net changes in operating assets and liabilities | (74,113) | (56,409) |
| Net cash used in operating activities | (43,633) | (28,480) |
| Investing Activities: | ||
| Purchases of property, plant and equipment | (3,935) | (5,064) |
| Proceeds from disposal of property, plant and equipment | 906 | 488 |
| Purchases of software and other intangible assets | (5,153) | (587) |
| Net increase in other non-current assets | (1,620) | (781) |
| Other | (4) | (95) |
| Net cash used in investing activities | (9,806) | (6,039) |
| Financing Activities: | ||
| Net borrowings under bank lines of credit | 17,835 | 23,257 |
| Net increase in short-term borrowings | 57 | 963 |
| Proceeds from issuance of long-term borrowings | 198 | 55 |
| Repayment of long-term borrowings | (1,787) | (300) |
| Repayment of capital lease obligations | (4,373) | (7,086) |
| Contingent consideration paid | (26) | — |
| Acquisition of noncontrolling interest | (1,168) | — |
| Dividends paid to noncontrolling interests | (157) | (34) |
| Net proceeds from issuance of ordinary shares | 1,334 | 3,189 |
| Excess tax benefit from share-based compensation | 398 | 251 |
| Net cash provided by financing activities | 12,311 | 20,295 |
|
Effect of foreign exchange rate changes on cash and cash equivalents |
19,330 |
4,161 |
| Net decrease in cash and cash equivalents | (21,798) | (10,063) |
| Cash and cash equivalents at beginning of period | 326,795 | 350,784 |
| Cash and cash equivalents at end of period | $ 304,997 | $ 340,721 |
| UTi Worldwide Inc. | |||||
| Segment Reporting | |||||
| (in thousands) | |||||
| (Unaudited) | |||||
| Three months ended April 30, 2011 | |||||
| Freight Forwarding |
Contract Logistics and Distribution |
Corporate | Total | ||
| Revenues |
$ 829,753 |
$ 368,952 |
$ — |
$ 1,198,705 |
|
| Purchased transportation costs | 645,250 | 142,878 | — | 788,128 | |
| Staff costs | 109,667 | 116,713 | 6,965 | 233,345 | |
| Depreciation | 4,388 | 7,394 | 659 | 12,441 | |
| Amortization of intangible assets | 1,086 | 1,719 | 650 | 3,455 | |
| Severance and restructuring charges | 1,973 | 2,876 | — | 4,849 | |
| Other operating expense | 48,664 | 83,756 | 5,274 | 137,694 | |
| Total operating expenses | 811,028 | 355,336 | 13,548 | 1,179,912 | |
| Operating income/(loss) | $ 18,725 | $ 13,616 | $ (13,548) | 18,793 | |
| Interest expense, net | (4,224) | ||||
| Other income, net | 176 | ||||
| Pretax income | 14,745 | ||||
| Provision for income taxes | 4,235 | ||||
| Net income | 10,510 | ||||
| Net income attributable to noncontrolling interests | 1,767 | ||||
| Net income attributable to UTi Worldwide Inc. | $ 8,743 | ||||
| UTi Worldwide Inc. | |||||
| Segment Reporting | |||||
| (in thousands) | |||||
| (Unaudited) | |||||
| Three months ended April 30, 2010 | |||||
| Freight Forwarding |
Contract Logistics and Distribution |
Corporate | Total | ||
| Revenues |
$ 721,774 |
$ 333,382 |
$ — |
$ 1,055,156 |
|
| Purchased transportation costs | 562,335 | 127,073 | — | 689,408 | |
| Staff costs | 94,390 | 106,977 | 5,634 | 207,001 | |
| Depreciation | 3,832 | 7,228 | 352 | 11,412 | |
| Amortization of intangible assets | 1,030 | 2,314 | — | 3,344 | |
| Other operating expenses | 46,370 | 73,024 | 5,645 | 125,039 | |
| Total operating expenses | 707,957 | 316,616 | 11,631 | 1,036,204 | |
| Operating income/(loss) | $ 13,817 | $ 16,766 | $ (11,631) | 18,952 | |
| Interest expense, net | (4,119) | ||||
| Other income, net | 844 | ||||
| Pretax income | 15,677 | ||||
| Provision for income taxes | 4,936 | ||||
| Net income | 10,741 | ||||
| Net income attributable to noncontrolling interests | 667 | ||||
| Net income attributable to UTi Worldwide Inc. | $ 10,074 | ||||
| UTi Worldwide Inc. | ||||||
| Geographic Reporting | ||||||
| (in thousands) | ||||||
| (Unaudited) | ||||||
| Three months ended April 30, 2011 | ||||||
|
Freight Forwarding Revenue |
Contract Logistics and Distribution Revenue |
Freight Forwarding Net Revenue |
Contract Logistics and Distribution Net Revenue |
Operating (Loss)/Income |
Transformation and facility exit costs |
|
| EMENA | $ 273,831 | $ 56,471 | $ 64,970 | $ 38,025 | $ (3,571) | $ 3,798 |
| Americas | 176,057 | 202,725 | 45,609 | 99,373 | 3,726 | 1,051 |
| Asia Pacific | 257,588 | 13,046 | 48,171 | 8,850 | 13,804 | — |
| Africa | 122,277 | 96,710 | 25,753 | 79,826 | 18,382 | — |
| Corporate | — | — | — | — | (13,548) | 1,612 |
| Total | $ 829,753 | $ 368,952 | $ 184,503 | $ 226,074 | $ 18,793 | $ 6,461 |
| Three months ended April 30, 2010 | ||||||
|
Freight Forwarding Revenue |
Contract Logistics and Distribution Revenue |
Freight Forwarding Net Revenue |
Contract Logistics and Distribution Net Revenue |
Operating Income/(Loss) |
||
| EMENA | $ 230,394 | $ 65,194 | $ 58,813 | $ 39,649 | $ 2,787 | |
| Americas | 150,100 | 173,304 | 40,772 | 90,531 | 4,888 | |
| Asia Pacific | 255,062 | 9,187 | 38,737 | 6,620 | 8,885 | |
| Africa | 86,218 | 85,697 | 21,117 | 69,509 | 14,023 | |
| Corporate | — | — | — | — | (11,631) | |
| Total | $ 721,774 | $ 333,382 | $ 159,439 | $ 206,309 | $ 18,952 | |
| UTi Worldwide Inc. | |||
| Supplemental Financial Information – Reconciliation to US GAAP | |||
| (in thousands, except per share amounts) | |||
| (Unaudited) | |||
| Three months ended April 30, 2011 | |||
| US GAAP | Adjustment |
Non US GAAP |
|
| Revenue | $ 1,198,705 | $ — | $ 1,198,705 |
| Purchased transportation costs | 788,128 | — | 788,128 |
| Staff costs (1) | 233,345 | (503) | 232,842 |
| Depreciation and amortization (1) | 12,441 | (466) | 11,975 |
| Amortization of intangible assets | 3,455 | — | 3,455 |
| Severance and restructuring charges (2) | 4,849 | (4,849) | — |
| Other operating expenses (1) | 137,694 | (643) | 137,051 |
| Operating income | 18,793 | 6,461 | 25,254 |
| Interest expense, net | (4,224) | — | (4,224) |
| Other income, net | 176 | — | 176 |
| Pretax income | 14,745 | 6,461 | 21,206 |
| Provision for income taxes | 4,235 | 1,856 | 6,091 |
| Net income |
10,510 |
4,605 |
15,115 |
| Net income attributable to noncontrolling interests | 1,767 | — | 1,767 |
| Net income attributable to UTi Worldwide Inc. | $ 8,743 | $ 4,605 | $ 13,348 |
| Basic earnings per share | $ 0.09 | $ 0.13 | |
| Diluted earnings per share | $ 0.08 | $ 0.13 | |
|
(1) During the quarter ended April 30, 2011, the company recorded other transformation-related costs totaling $1,612 that are related to its new financial system. These costs are comprised of $503 of staff costs, amortization of capitalized software costs of $466 and consulting fees of $643. |
|||
|
(2) During the quarter ended April 30, 2011, the company recorded severance and restructuring charges totaling $4,849, which were comprised of $1,973 in severance costs related to transformation activities and $2,876 in severance and facility exit costs associated with the closure of certain underutilized contract logistics facilities in Europe. |
|||
| UTi Worldwide Inc. | |||||
| Revenue Growth Reconciliation | |||||
| (in thousands) | |||||
| (Unaudited) | |||||
| Set forth below is a reconciliation of our organic growth in our revenues and net revenues over the corresponding prior-year period. | |||||
| Revenues | Net Revenues | ||||
| Three months ended April 30, 2010 | $ 1,055,156 | $ 365,748 | |||
| Add: Acquisitions impact (3) | 2,634 | —% | 192 | —% | |
| Add: Currency impact (4) | 42,420 | 4% | 15,613 | 4% | |
| Organic growth | 98,495 | 9% | 29,024 | 8% | |
| Three months ended April 30, 2011 | $ 1,198,705 | $ 410,577 | |||
| (3) Relates to revenues and net revenues in the current period for businesses acquired from May 2010. | |||||
|
(4) Represents the fluctuations in foreign currency exchange rates when balances are translated on constant currency basis into U.S. dollars. The company makes constant currency computations using actual results computed at the foreign currency exchange rates for the comparative prior period. |
|||||
| UTi Worldwide Inc. | |||
| Total Operating Expense Reconciliation | |||
| (in thousands) | |||
| (Unaudited) | |||
| Set forth below is a reconciliation of our organic growth in our operating expenses over the corresponding prior-year period. | |||
| Three months ended | |||
| April 30, 2011 | April 30, 2010 | ||
| Total operating expenses | $ 1,179,912 | $ 1,036,204 | |
| Less: Purchased transportation costs | 788,128 | 689,408 | |
| Adjusted operating expenses | $ 391,784 | 346,796 | |
| Reconciliation of adjusted operating expenses | |||
| Add: Acquisition impact (5) | 300 | —% | |
| Add: Currency impact (6) | 14,385 | 4% | |
|
Add: Severance and restructuring charges (7) Add: Transformation financial system costs (8) |
4,849 1,612 |
1% —% |
|
| Add: Organic impact | 23,842 | 7% | |
|
Adjusted operating expenses for the three months ended April 30, 2011 |
$ 391,784 |
||
|
(5) Relates to operating expenses in the current period for businesses acquired from May 2010. |
|||
|
(6) Represents the fluctuations in foreign currency exchange rates when balances are translated on constant currency basis into U.S. dollars. The company makes constant currency computations using actual results computed at the foreign currency exchange rates for the comparative prior period. |
|||
|
(7) Includes $1,973 in severance costs related to transformation activities and $2,876 in severance and other costs associated with the exit of certain underutilized contract logistics facilities in Europe. |
|||
|
(8) Represents other transformation-related costs associated with the company's new financial system. |
|||