RANCHO DOMINGUEZ, Calif., Sept. 10, 2003 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported continued gains in gross and net revenues, operating income and net income for the three- and six-month periods ended July 31, 2003.
For the fiscal 2004 second quarter, gross revenues increased 32 percent to $362.0 million from $274.8 million in the corresponding period a year ago. Net revenues rose 65 percent to $144.9 million from $87.5 million in the second fiscal quarter last year. Standard Corporation, which was acquired effective October 1, 2002, contributed $40.1 million to both gross and net revenues during the current second quarter.
"We are very pleased to have achieved quarter-over-quarter gross and net revenue gains across all service categories in the second fiscal quarter of 2004," said Roger I. MacFarlane, chief executive officer of UTi Worldwide. "Although the global economic environment remained sluggish, UTi's airfreight forwarding operations posted a 26 percent increase in second quarter net revenues from the prior year. Despite greater volume in Asia Pacific where our airfreight forwarding yields are lower than the company's average, and reduced airfreight volume in Europe, UTi's team improved its airfreight yields to 29 percent during the current quarter from 25 percent a year ago.
"Ocean freight net revenues advanced 14 percent over last year's second quarter principally due to stronger volumes and the net effect of price increases on Trans-Pacific trade lanes. Net revenues for customs brokerage grew 11 percent compared with a year ago driven by record numbers of both air and ocean shipments. The acquisition of Standard in October 2002 continues to benefit our contract logistics service, which grew to $47.1 million from $8.9 million a year ago and contributed 33 percent of consolidated net revenues," MacFarlane said.
UTi's global network again achieved gross and net revenue gains in all geographic regions over the prior-year period. The Americas, benefiting from the Standard acquisition, recorded a 176 percent increase in net revenues from a year ago. Asia Pacific net revenues rose 22 percent. Europe and Africa posted second quarter net revenue increases of 26 percent and 25 percent, respectively, helped by the weaker U.S. dollar as compared to last year's second quarter.
Operating income grew 31 percent to $15.0 million in the fiscal 2004 second quarter from $11.4 million a year earlier. Operating margin, which is operating income as a percentage of net revenues, equaled 10.4 percent in the current second quarter, compared with 13.1 percent in the second quarter of fiscal 2003. Operating margin in the current second quarter was reduced by the inclusion of Standard Corporation, which traditionally operates at a lower operating margin when compared to other UTi operations. Excluding the operating income of Standard, the company's operating profit ratio, equaled 13.3 percent in the fiscal 2004 second quarter, compared with 13.1 percent in the corresponding prior-year period. Management believes this metric is a key operating indicator to allow a better comparison of the company's current performance against its historical performance, and the attached schedule shows a reconciliation of this measure to UTi's operating income as presented in U.S. GAAP.
Net income for the fiscal 2004 second quarter rose 48 percent to $11.4 million, or $0.36 per diluted share, based on 31.4 million weighted average shares outstanding, compared with prior-year second quarter net income of $7.7 million, or $0.30 per diluted share, based on 25.9 million weighted average shares outstanding. UTi's follow-on offering of 4.6 million ordinary shares in December 2002 resulted in a higher weighted average number of shares outstanding for the current second quarter compared with the corresponding prior-year period.
"As we look forward to the balance of the year, we must keep in mind that last year's third and fourth quarters benefited from extraordinary airfreight volumes in response to the West Coast port lockout in the U.S. To meet our customers' needs at the time, we expanded our air charter program in Hong Kong and China and handled volume that was converted from ocean to air, which positively affected our results. We do not expect a repeat of these unusual circumstances this year, nor its consequential impact on our growth rate," MacFarlane said.
For the six-month period ended July 31, 2003, gross revenues rose 35 percent to $688.8 million from $510.5 million for the same period a year ago. Net revenues totaled $276.3 million, a 68 percent increase over $164.5 million in the comparable prior-year period. Standard Corporation contributed $75.2 million to both gross and net revenues during the six-month period ended July 31, 2003. Operating income for the first half of fiscal 2004 advanced 35 percent to $26.1 million from $19.4 million in the corresponding period a year earlier. Operating margin (operating income as a percentage of net revenues) equaled 9.5 percent in the current six-month period, compared with 11.8 percent a year ago, again reflecting the impact of Standard Corporation. Net income for the fiscal 2004 first half increased 55 percent to $19.4 million, or $0.62 per diluted share, based on 31.3 million weighted average shares outstanding. This compares with net income in the corresponding period a year ago of $12.5 million, or $0.48 per diluted share, based on 25.8 million weighted average shares outstanding.
As of July 31, 2003, the company reported total cash and cash equivalents, net of outstanding bank lines of credit and short-term bank borrowings, of $115 million, compared with $126 million at January 31, 2003. This decrease is due to in part to the increase in working capital as a result of higher volumes, capital expenditures and spending on acquisitions and contingent earn-out payments.
"Solid execution of six quarters of UTi's five-year NextLeap strategy has resulted in improved revenues, operating income and net income for shareholders," MacFarlane said. "Even as global trade volumes remain softer than expected, we continue to partner with our customers to deliver quantified value from UTi's customized supply chain solutions. Our confidence in UTi's market position is demonstrated by our ongoing investment in the skills and talent of our global sales and customer management organization."
About UTi Worldwide
UTi Worldwide Inc. is an international, non-asset based supply chain management company providing air and ocean freight forwarding, contract logistics, customs brokerage and other logistics-related services. The company serves a large and diverse base of global and local companies, including customers operating in industries with unique supply chain requirements such as the pharmaceutical, 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 optimize the operation of its customers' global supply chains.
Investor Conference Call
UTi management will host an investor conference call today, Wednesday, September 10, 2003, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company's financials and operations for the second quarter ended July 31, 2003. The call will be open to all interested investors through a live, listen-only audio Web broadcast via the Internet at www.go2uti.com and www.companyboardroom.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 10:00 a.m. PDT, Wednesday, September 10, through 5:00 p.m. PDT, Friday, September 12, by calling 800-633-8284 (domestic) or 402-977-9140 (international) and using Reservation No. 21159077.
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 growth strategy and integration of acquisitions. 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; 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 those in Africa, Asia and Europe; risks of international operations; the success and effects of new strategies; disruptions caused by epidemics, 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. The historical results achieved by the company are not necessarily indicative of its future prospects. 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,
2003 2002 2003 2002
---------- ---------- ---------- ----------
(Unaudited) (Unaudited)
Gross revenues:
Airfreight
forwarding $ 167,971 $ 152,053 $ 327,052 $ 283,110
Ocean freight
forwarding 88,589 70,375 162,911 133,323
Customs brokerage 17,207 15,501 32,241 29,498
Contract logistics 56,601 14,057 107,908 25,471
Other 31,657 22,833 58,701 39,075
---------- ---------- ---------- ----------
Total gross revenues $ 362,025 $ 274,819 $ 688,813 $ 510,477
========== ========== ========== ==========
Net revenues:
Airfreight
forwarding $ 48,216 $ 38,331 $ 93,146 $ 72,612
Ocean freight
forwarding 18,931 16,608 34,989 31,436
Customs brokerage 16,183 14,531 30,448 27,947
Contract logistics 47,139 8,880 90,517 15,538
Other 14,390 9,183 27,178 16,929
---------- ---------- ---------- ----------
Total net revenues 144,859 87,533 276,278 164,462
---------- ---------- ---------- ----------
Staff costs 80,134 43,988 150,554 83,608
Depreciation and
amortization 3,751 2,490 7,219 4,827
Amortization of
intangible assets 158 -- 306 --
Other operating
expenses 45,778 29,609 92,068 56,669
---------- ---------- ---------- ----------
Operating income 15,038 11,446 26,131 19,358
Interest income/
(expense), net 373 (10) 509 (380)
Gains/(losses) on
foreign exchange 453 56 324 (315)
---------- ---------- ---------- ----------
Pretax income 15,864 11,492 26,964 18,663
Income tax expense (4,070) (3,216) (6,754) (5,294)
---------- ---------- ---------- ----------
Income before
minority interests 11,794 8,276 20,210 13,369
Minority interests (378) (537) (820) (873)
---------- ---------- ---------- ----------
Net income $ 11,416 $ 7,739 $ 19,390 $ 12,496
========== ========== ========== ==========
Basic earnings per
ordinary share $ 0.38 $ 0.31 $ 0.64 $ 0.49
Diluted earnings per
ordinary share $ 0.36 $ 0.30 $ 0.62 $ 0.48
Number of weighted-
average shares
outstanding used for
per share calculations
Basic 30,232,198 25,274,891 30,194,917 25,267,661
Diluted 31,432,216 25,877,748 31,306,056 25,823,315
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
July 31, January 31,
2003 2003
--------- ---------
(Unaudited)
ASSETS
Cash and cash equivalents (including
restricted cash of $4,000) $ 149,574 $ 168,125
Trade receivables, net 275,091 247,893
Deferred income tax assets 4,089 1,592
Other current assets 34,620 30,492
--------- ---------
Total current assets 463,374 448,102
Property, plant and equipment, net 49,880 44,566
Goodwill and other intangible assets, net 131,302 125,641
Investments 822 847
Deferred income tax assets 2,228 1,227
Other non-current assets 9,004 6,692
--------- ---------
Total assets $ 656,610 $ 627,075
========= =========
LIABILITIES & SHAREHOLDERS' EQUITY
Bank lines of credit $ 31,804 $ 33,458
Short-term borrowings 2,772 9,121
Current portion of capital lease obligations 2,320 2,539
Trade payables and other accrued liabilities 248,409 236,548
Income taxes payable 10,024 8,083
Deferred income tax liabilities 995 489
--------- ---------
Total current liabilities 296,324 290,238
Long-term bank borrowings 102 199
Capital lease obligations 7,324 7,111
Deferred income tax liabilities 1,957 1,643
Retirement fund obligations 1,111 1,016
Minority interests 3,404 2,699
Commitments and contingencies
Shareholders' equity:
Common stock 312,815 311,161
Retained earnings 80,473 63,973
Accumulated other comprehensive loss (46,900) (50,965)
--------- ---------
Total shareholders' equity 346,388 324,169
--------- ---------
Total liabilities and
shareholders' equity $ 656,610 $ 627,075
========= =========
UTi Worldwide Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Six Months Ended
July 31,
2003 2002
--------- ---------
(Unaudited)
OPERATING ACTIVITIES:
Net income $ 19,390 $ 12,496
Adjustments to reconcile net income to net cash
provided by operating activities:
Stock compensation costs 87 91
Depreciation and amortization 7,219 4,827
Amortization of intangible assets 306 --
Deferred income taxes 1,490 49
(Gain)/loss on disposal of property,
plant and equipment (47) 121
Other 820 873
Changes in operating assets and liabilities:
Increase in trade receivables and other
current assets (20,776) (21,817)
Increase in trade payables and other
accrued liabilities 5,341 18,600
--------- ---------
Net cash provided by operating activities 13,830 15,240
--------- ---------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (9,018) (4,542)
Proceeds from disposal of property,
plant and equipment 312 307
Increase in other non-current assets (1,077) (25)
Acquisition of subsidiaries and
contingent earn-out payments (8,044) (6,606)
Purchases of other investments (170) --
--------- ---------
Net cash used in investing activities (17,997) (10,866)
--------- ---------
FINANCING ACTIVITIES:
Decrease in bank lines of credit (1,653) (7,259)
Decrease in short-term borrowings (6,346) (57)
Long-term bank borrowings - repaid (116) (968)
Capital lease obligations - repaid (1,739) (2,263)
Decrease in minority interests (327) (170)
Proceeds from issuance of ordinary shares 1,567 426
Dividends paid (2,890) (1,929)
--------- ---------
Net cash used in financing activities (11,504) (12,220)
--------- ---------
Net decrease in cash and cash equivalents (15,671) (7,846)
Cash and cash equivalents at
beginning of period 168,125 87,594
Effect of foreign exchange rate changes (2,880) (483)
--------- ---------
Cash and cash equivalents at end of period $ 149,574 $ 79,265
========= =========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three Months Ended July 31, 2003
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
------- ------- ------- ------- ------- -------
Gross revenue
from external
customers $104,435 $114,281 $96,169 $47,140 $ -- $362,025
======= ======= ======= ======= ======= =======
Net revenue $31,513 $65,147 $21,147 $27,052 $ -- $144,859
Staff costs 18,132 38,518 8,897 13,198 1,389 80,134
Depreciation and
amortization 1,074 1,022 550 742 363 3,751
Amortization of
intangible
assets -- 149 -- 9 -- 158
Other operating
expenses 9,174 21,432 5,412 8,357 1,403 45,778
------- ------- ------- ------- ------- -------
Operating
income/(loss) $ 3,133 $ 4,026 $ 6,288 $ 4,746 $(3,155) 15,038
======= ======= ======= ======= =======
Interest
income, net 373
Gain on foreign
exchange 453
-------
Pretax income 15,864
Income tax expense (4,070)
-------
Income before
minority interests $ 11,794
=======
Three Months Ended July 31, 2002
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
------- ------- ------- ------- ------- -------
Gross revenues
from external
customers $93,229 $68,561 $79,375 $33,654 $ -- $274,819
======= ======= ======= ======= ======= =======
Net revenues $24,927 $23,634 $17,340 $21,632 $ -- $87,533
Staff costs 13,341 13,771 7,175 8,585 1,116 43,988
Depreciation and
amortization 844 503 487 462 194 2,490
Other operating
expenses 7,050 7,406 4,912 9,264 977 29,609
------- ------- ------- ------- ------- -------
Operating
income/(loss) $ 3,692 $ 1,954 $ 4,766 $ 3,321 $(2,287) 11,446
======= ======= ======= ======= =======
Interest
expense, net (10)
Gains on foreign
exchange 56
-------
Pretax income 11,492
Income tax expense (3,216)
-------
Income before
minority interests $ 8,276
=======
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Six Months Ended July 31, 2003
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
------- ------- ------- ------- ------- -------
Gross revenue
from external
customers $203,368 $217,395 $180,002 $88,048 $ -- $688,813
======= ======= ======= ======= ======= =======
Net revenue $58,997 $122,446 $40,258 $54,577 $ -- $276,278
Staff costs 34,383 71,688 17,060 24,788 2,635 150,554
Depreciation and
amortization 2,115 2,002 1,062 1,404 636 7,219
Amortization of
intangible
assets -- 297 -- 9 -- 306
Other operating
expenses 17,691 41,026 10,319 20,561 2,471 92,068
------- ------- ------- ------- ------- -------
Operating
income/(loss) $ 4,808 $ 7,433 $11,817 $ 7,815 $(5,742) 26,131
======= ======= ======= ======= =======
Interest
income, net 509
Gain on foreign
exchange 324
-------
Pretax income 26,964
Income tax expense (6,754)
-------
Income before
minority interests $ 20,210
=======
Six Months Ended July 31, 2002
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
------- ------- ------- ------- ------- -------
Gross revenues
from external
customers $172,467 $130,103 $144,529 $63,378 $ -- $510,477
======= ======= ======= ======= ======= =======
Net revenues $46,729 $45,342 $32,181 $40,210 $ -- $164,462
Staff costs 24,727 27,020 13,812 15,974 2,075 83,608
Depreciation and
amortization 1,603 1,141 946 872 265 4,827
Other operating
expenses 13,378 14,349 9,450 17,023 2,469 56,669
------- ------- ------- ------- ------- -------
Operating
income/(loss) $ 7,021 $ 2,832 $ 7,973 $ 6,341 $(4,809) 19,358
======= ======= ======= ======= =======
Interest
expense, net (380)
Losses on
foreign exchange (315)
-------
Pretax income 18,663
Income tax expense (5,294)
-------
Income before
minority interests $13,369
=======
UTi Worldwide Inc.
Reconciliation of Non-U.S. GAAP Measure to U.S. GAAP Measure
(in thousands)
Three Months Ended Six Months Ended
July 31, July 31,
2003 2002 2003 2002
-------- -------- -------- --------
(Unaudited) (Unaudited)
OPERATING PROFIT RATIO
Operating income,
per U.S. GAAP $ 15,038 $ 11,446 $ 26,131 $ 19,358
Less: Operating income for
Standard Corporation,
per U.S. GAAP 1,154 -- 3,044 --
-------- -------- -------- --------
Adjusted operating income $ 13,884 $ 11,446 $ 23,087 $ 19,358
======== ======== ======== ========
Divided by:
Net revenue,
per U.S. GAAP $144,859 $ 87,533 $276,278 $164,462
Less: Net revenue for
Standard Corporation,
per U.S. GAAP 40,145 -- 75,201 --
-------- -------- -------- --------
Adjusted net revenue $104,714 $ 87,533 $201,077 $164,462
======== ======== ======== ========
Operating Profit Ratio,
a non-U.S. GAAP measure 13.3% 13.1% 11.5% 11.8%
======== ======== ======== ========