RANCHO DOMINGUEZ, Calif., Sept. 7, 2006 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported financial results for the three- and six-month periods ended July 31, 2006.
For the second quarter of fiscal 2007, gross revenues increased 30 percent to $890.1 million from $686.2 million in the prior-year second quarter. Net revenues increased 28 percent to $305.4 million from $238.3 in the prior-year second quarter. Revenue growth for the fiscal 2007 second quarter reflects continued organic growth across all geographic regions and as well as contributions from Market Industries, Ltd., which the company acquired in March 2006. After adjusting for the impact of currency fluctuations on the comparison of UTi's results and after excluding contributions from the acquisitions made since June 1, 2005, the company estimates that its gross and net revenues from organic operations increased 14 percent and 17 percent, respectively, in the fiscal 2007 second quarter, when compared with the corresponding period a year ago.
"The integration of Market Industries is progressing well, and we continue to see cross-selling opportunities, especially with the addition of truck brokerage solutions to our capabilities," said Roger I. MacFarlane, chief executive officer of UTi Worldwide. "We are also beginning to see a positive impact in our business as the result of our recent investments in sales personnel. Although the majority of the anticipated benefits from this initiative are expected to be realized on a longer-term basis as previously announced, we are encouraged by favorable early returns."
Operating income in the second quarter of fiscal 2007 totaled $39.7 million, compared with $33.6 million in the second quarter of fiscal 2006. Operating income included $2.3 million share-based compensation expense in the fiscal 2007 second quarter compared to $0.7 million in the second quarter of fiscal 2006. Operating income as a percentage of net revenues equaled 13.0 percent in the fiscal 2007 second quarter, compared with 14.1 percent in the prior-year second quarter and 10.0 percent in the immediately preceding fiscal 2007 first quarter.
Net income for the fiscal 2007 second quarter totaled $23.7 million, or $0.24 per diluted share, based on 99,817,022 weighted-average shares outstanding. This compares with net income in the prior-year second quarter of $22.3 million, or $0.23 per diluted share, based on 97,773,738 weighted-average shares outstanding, as adjusted for a three-for-one split of the company's ordinary shares effected on March 27, 2006.
In July 2006, the company issued $200.0 million of senior unsecured guaranteed notes and entered into a new senior credit facility that allows for a total of $250.0 million of available borrowings, guarantees and letters of credit. The new credit facility replaced substantially all of the company's previous existing working capital credit facilities. A majority of the net proceeds from the sale of the notes was used to repay the company's $150.0 million short-term credit facility which UTi obtained in connection with its March 2006 acquisition of Market Industries.
"Our team has done an outstanding job of executing our NextLeap strategies that deliver high value to our clients' requirements for global integrated logistics, while at the same time delivering improved operating performance for our shareholders," MacFarlane said. "We remain focused on delivering strong financial performance and at the same time, we believe our many long-term investments underpin our ability to serve the end-to-end supply chain needs of our clients and solidify UTi's competitive position as we prepare for our 'next, NextLeap' journey."
For the six-month period ended July 31, 2006, gross revenues increased 26 percent to $1.7 billion from $1.3 billion for the same period a year ago. Net revenues rose 26 percent to $577.0 million from $459.5 million in the first half of fiscal 2006. Operating income for the fiscal year-to-date period ended July 31, 2006 totaled $66.9 million, an increase of 10 percent from $60.6 million in the comparable prior-year period. Operating income included $5.1 million share-based compensation expense in the first half of fiscal 2007 compared to $2.1 million in the first half of fiscal 2006. Operating income as a percentage of net revenues was 11.6 percent in the six-month period ended July 31, 2006, compared with 13.2 percent in the same period ended July 31, 2005. Net income for the first half of fiscal 2007 was $40.3 million, or $0.41 per diluted share, compared with $40.1 million, or $0.41 per diluted share, in the corresponding period a year ago.
Investor Conference Call
UTi management will host an investor conference call today, September 7, 2006, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company's financials and operations for the fiscal 2007 second quarter. 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 10:00 a.m. PDT, today, through September 14, by calling 888-286-8010 (domestic) or 617-801-6888 (international) and using Replay Passcode 79145696.
About UTi Worldwide
UTi Worldwide Inc. is an international, non-asset-based global integrated logistics 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' global supply chains.
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 statements may include, but are not limited to, the company's discussion of its NextLeap goals and journey, UTi's growth strategies and plans which it is developing for the 'next NextLeap,' the company's anticipated realization of revenue gains from its investments in sales personnel, comments about the company's investments which it believes underpins its ability to serve the end-to-end supply chain needs of its clients, comments about the company's focus on financial performance in the future and any other statements which are not historical facts. Many important factors may cause the company's actual results to differ materially from those discussed in any such forward-looking statements, including increased competition; integration risks associated with acquisitions, including the company's recent acquisition of Market Industries, Ltd. and the possibility that certain expected acquisition related tax consequences will not be realized; the effects of 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 conditions such as inventory build-up, economic slowdowns, and declines in world trade or consumer confidence; the impact of higher fuel costs; work stoppages or slowdowns or other material interruptions in transportation services; risks of international operations; the success and effects of new strategies; disruptions caused by conflicts, wars and terrorism; and the other risks and uncertainties described in the company's 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, there can be no assurance that the results contemplated in forward-looking statements will be realized. 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. UTi undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
UTi Worldwide Inc.
Condensed Consolidated Income Statements
(in thousands, except share and per share amounts)
Three months ended Six months ended
July 31, July 31,
----------------------- -----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
(Unaudited)
Gross revenues:
Airfreight
forwarding $ 341,532 $ 300,786 $ 649,102 $ 579,066
Ocean freight
forwarding 234,216 201,988 440,749 388,623
Customs
brokerage 22,019 20,136 41,824 40,444
Contract
logistics 125,367 110,172 243,986 204,758
Distribution
and other 166,939 53,150 288,112 103,534
---------- ---------- ---------- ----------
Total gross
revenues $ 890,073 $ 686,232 $1,663,773 $1,316,425
========== ========== ========== ==========
Net revenues:
Airfreight
forwarding $ 81,485 $ 71,946 $ 156,374 $ 142,475
Ocean freight
forwarding 36,281 29,288 67,810 54,872
Customs
brokerage 21,636 19,439 40,795 39,002
Contract
logistics 108,678 92,842 208,376 171,622
Distribution
and other 57,331 24,750 103,684 51,492
---------- ---------- ---------- ----------
Total net
revenues 305,411 238,265 577,039 459,463
Staff costs 161,202 125,526 311,966 241,297
Depreciation
and amortization 7,533 5,619 14,969 11,323
Amortization of
intangible
assets 2,192 982 4,043 2,124
Other operating
expenses 94,744 72,490 179,154 144,144
---------- ---------- ---------- ----------
Operating
income 39,740 33,648 66,907 60,575
Interest
expense, net (3,403) (695) (6,450) (1,418)
Losses on
foreign
exchange (253) (536) (68) (462)
---------- ---------- ---------- ----------
Pretax income 36,084 32,417 60,389 58,695
Provision for
income taxes 10,847 9,355 17,678 16,931
---------- ---------- ---------- ----------
Income before
minority
interests 25,237 23,062 42,711 41,764
Minority
interests (1,541) (719) (2,423) (1,652)
---------- ---------- ---------- ----------
Net income $ 23,696 $ 22,343 $ 40,288 $ 40,112
========== ========== ========== ==========
Basic earnings
per share(a) $ 0.25 $ 0.24 $ 0.42 $ 0.43
Diluted earnings
per share(a) $ 0.24 $ 0.23 $ 0.41 $ 0.41
Number of weighted-average
shares outstanding used
for per share calculations:
Basic
shares(a) 96,300,764 93,764,889 95,897,315 93,398,289
Diluted
shares(a) 99,817,022 97,773,738 99,397,847 97,683,183
(a) All periods presented have been adjusted for a three-for-one
split of UTi's ordinary shares effected on March 27, 2006.
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
July 31, January 31,
2006 2006
----------- -----------
(Unaudited)
ASSETS
Cash and cash equivalents $ 195,528 $ 246,510
Trade receivables, net 635,162 497,990
Deferred income tax assets 8,680 8,517
Other current assets 55,324 39,172
----------- -----------
Total current assets 894,694 792,189
Property, plant and equipment,
net 110,090 80,443
Goodwill and other intangible
assets, net 568,149 369,371
Investments 2,065 1,050
Deferred income tax assets 7,705 4,027
Other non-current assets 19,839 11,684
----------- -----------
Total assets $ 1,602,542 $ 1,258,764
=========== ===========
LIABILITIES & SHAREHOLDERS' EQUITY
Bank lines of credit $ 71,864 $ 95,177
Short-term borrowings 2,962 4,441
Current portion of capital lease
obligations 8,186 6,189
Trade payables and other accrued
liabilities 530,901 465,100
Income taxes payable 20,057 22,904
Deferred income tax liabilities 2,971 1,694
----------- -----------
Total current liabilities 636,941 595,505
Long-term borrowings 212,146 13,775
Capital lease obligations 18,219 16,068
Deferred income tax liabilities 27,605 11,593
Retirement fund obligations 5,901 5,124
Other long-term liabilities 10,953 4,960
Minority interests 24,551 25,219
Commitments and contingencies
Shareholders' equity:
Common stock 410,273 359,835
Retained earnings 288,065 253,573
Accumulated other comprehensive
loss (32,112) (26,888)
----------- -----------
Total shareholders' equity 666,226 586,520
----------- -----------
Total liabilities and
shareholders' equity $ 1,602,542 $ 1,258,764
=========== ===========
UTi Worldwide Inc.
Consolidated Statements of Cash Flows
(in thousands)
Six months ended
July 31,
-------------------------
2006 2005
--------- ---------
(Unaudited)
OPERATING ACTIVITIES:
Net income $ 40,288 $ 40,112
Adjustments to reconcile net income
to net cash used in operating
activities:
Share-based compensation costs 5,070 2,073
Depreciation and amortization 14,969 11,323
Amortization of intangible assets 4,043 2,124
Deferred income taxes 30 (3,419)
Tax benefit relating to exercise
of stock options 800 2,333
Excess tax benefits from share-based
compensation (717) --
Gain on disposal of property, plant
and equipment (205) (95)
Other 2,424 1,617
Changes in operating assets and
liabilities:
Increase in trade receivables (105,237) (55,532)
Increase in other current assets (5,517) (3,362)
Increase in trade payables 25,692 19,644
Increase in other current
liabilities 25,875 19,008
--------- ---------
Net cash provided by operating
activities 7,515 35,826
INVESTING ACTIVITIES:
Purchases of property, plant and
equipment (10,881) (9,020)
Proceeds from disposal of property,
plant and equipment 1,151 316
Increase in other non-current assets (5,948) (768)
Acquisitions and contingent earn-out
payments (199,284) (36,006)
Other (1,165) (754)
--------- ---------
Net cash used in investing
activities (216,127) (46,232)
FINANCING ACTIVITIES:
Decrease in bank lines of credit (26,661) (4,787)
Decrease in short-term borrowings (1,148) (417)
Increase in long-term borrowings 586 13,715
Repayment of long-term borrowings (1,887) (310)
Net proceeds from issuance of senior
notes 198,739 --
Repayments of capital lease
obligations (4,260) (2,324)
Decrease in minority interests -- (474)
Net proceeds from issuance of
ordinary shares 7,548 6,151
Excess tax benefits from share-based
compensation 717 --
Dividends paid (5,775) (4,672)
--------- ---------
Net cash provided by financing
activities 167,859 6,882
Effect of foreign exchange rate
changes (10,229) (9,838)
--------- ---------
Net decrease in cash and cash
equivalents (50,982) (13,362)
Cash and cash equivalents at
beginning of period 246,510 178,132
--------- ---------
Cash and cash equivalents at end
of period $ 195,528 $ 164,770
========= =========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three months ended July 31, 2006
---------------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
-------- -------- -------- -------- ------- --------
Gross revenue
from external
customers $215,863 $299,979 $229,949 $144,282 $ -- $890,073
======== ======== ======== ======== ======= ========
Net revenue $ 63,942 $133,612 $ 38,703 $ 69,154 $ -- $305,411
Staff costs 35,246 76,930 16,171 29,804 3,051 161,202
Depreciation
and
amortization 1,611 2,722 858 1,831 511 7,533
Amortization
of
intangible
assets -- 1,915 114 163 -- 2,192
Other
operating
expenses 17,828 39,034 9,631 24,198 4,053 94,744
-------- -------- -------- -------- ------- --------
Operating
income/
(loss) $ 9,257 $ 13,011 $ 11,929 $ 13,158 $(7,615) 39,740
======== ======== ======== ======== =======
Interest
expense, net (3,403)
Losses on
foreign
exchange (253)
--------
Pretax income 36,084
Provision
for income
taxes 10,847
--------
Income before
minority
interests $ 25,237
========
Three months ended July 31, 2005
---------------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
-------- -------- -------- -------- ------- --------
Gross revenue
from external
customers $179,212 $171,172 $207,406 $128,442 $ -- $686,232
======== ======== ======== ======== ======= ========
Net revenue $ 52,280 $ 92,056 $ 34,076 $ 59,853 $ -- $238,265
Staff costs 27,655 55,472 14,138 25,487 2,774 125,526
Depreciation
and
amortization 1,411 1,126 772 1,867 443 5,619
Amortization
of intangible
assets -- 735 78 169 -- 982
Other
operating
expenses 14,308 25,712 8,152 21,685 2,633 72,490
-------- -------- -------- -------- ------- --------
Operating
income/
(loss) $ 8,906 $ 9,011 $ 10,936 $ 10,645 $(5,850) 33,648
======== ======== ======== ======== =======
Interest
expense, net (695)
Losses on
foreign
exchange (536)
--------
Pretax income 32,417
Provision for
income taxes 9,355
--------
Income before
minority
interests $ 23,062
========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Six months ended July 31, 2006
---------------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
-------- -------- -------- -------- ------- --------
Gross revenue
from external
customers $399,956 $540,794 $437,629 $285,394 $ -- $1,663,773
======== ======== ======== ======== ======= ========
Net revenue $118,271 $249,108 $ 74,340 $135,320 $ -- $577,039
Staff costs 67,030 147,376 31,393 59,592 6,575 311,966
Depreciation
and
amortization 3,019 5,327 1,693 3,915 1,015 14,969
Amortization
of intangible
assets -- 3,468 229 346 -- 4,043
Other
operating
expenses 33,935 70,748 18,662 48,759 7,050 179,154
-------- -------- -------- -------- ------- --------
Operating
income/
(loss) $ 14,287 $ 22,189 $ 22,363 $ 22,708 $(14,640) 66,907
======== ======== ======== ======== =======
Interest
expense, net (6,450)
Losses on
foreign
exchange (68)
--------
Pretax income 60,389
Provision
for income
taxes 17,678
--------
Income before
minority
interests $ 42,711
========
Six months ended July 31, 2005
---------------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
-------- -------- -------- -------- ------- --------
Gross revenue
from external
customers $341,195 $327,950 $389,120 $258,160 $ -- $1,316,425
======== ======== ======== ======== ======= ========
Net revenue $101,908 $172,480 $ 62,803 $122,272 $ -- $459,463
Staff costs 54,816 102,003 26,599 52,854 5,025 241,297
Depreciation
and
amortization 2,826 2,242 1,465 3,852 938 11,323
Amortization
of intangible
assets -- 1,691 78 355 -- 2,124
Other
operating
expenses 27,770 50,411 15,413 45,736 4,814 144,144
-------- -------- -------- -------- ------- --------
Operating
income/
(loss) $ 16,496 $ 16,133 $ 19,248 $ 19,475 $(10,777) 60,575
======== ======== ======== ======== =======
Interest
expense, net (1,418)
Losses on
foreign
exchange (462)
--------
Pretax income 58,695
Provision for
income
taxes 16,931
--------
Income before
minority
interests $ 41,764
========
UTi Worldwide Inc.
Supplemental Financial Information
(in thousands)
Three months ended Six months ended
July 31, July 31,
------------------- ----------------------
2006 2005 2006 2005
--------- -------- ---------- ----------
(Unaudited)
Forwarding, Customs
Brokerage & Other:
Gross revenue from
external customers $629,667 $549,616 $1,191,567 $1,057,210
========= ======== ========== ==========
Net revenue $149,260 $128,049 $ 283,037 $ 252,909
Staff costs 77,723 65,746 151,179 131,315
Depreciation and
amortization 3,378 3,238 6,555 6,498
Other operating expenses 37,393 33,386 74,174 69,301
--------- -------- ---------- ----------
Operating income $ 30,766 $ 25,679 $ 51,129 $ 45,795
========= ======== ========== ==========
Contract Logistics,
Distribution & Other:
Gross revenue from
external customers $260,406 $136,616 $ 472,206 $ 259,215
========= ======== ========== ==========
Net revenue $156,151 $110,216 $ 294,002 $ 206,554
Staff costs 80,428 57,006 154,212 104,957
Depreciation and
amortization 3,644 1,938 7,399 3,887
Amortization of intangible
assets 2,192 982 4,043 2,124
Other operating expenses 53,298 36,471 97,930 70,029
--------- -------- ---------- ----------
Operating income $ 16,589 $ 13,819 $ 30,418 $ 25,557
========= ======== ========== ==========