RANCHO DOMINGUEZ, Calif., Sept. 4, 2002 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported double-digit growth in revenues, operating income and net income for its fiscal 2003 second quarter ended July 31, 2002 over the corresponding prior-year period.
Gross revenues for the second quarter increased 25 percent to $274.8 million from $219.4 million in last year's corresponding three months. Net revenues advanced 11 percent to $87.5 million from $79.0 million in the second quarter of fiscal 2002. Declines in airfreight yields, compared with the prior-year second quarter, dampened net revenue growth on these higher gross revenue levels. Additionally, on a constant currency basis using exchange rates in effect for the second quarter a year ago, gross revenues would have advanced 29 percent to $282.0 million, and net revenues would have been up 17 percent to $92.5 million.
Operating income rose 35 percent in the current second quarter to $11.4 million from $8.5 million posted in the corresponding fiscal 2002 period. All regions except Africa contributed to the significant growth in operating income. The growth in Africa's results was masked by a 25 percent decline in the South African Rand from a year ago. Results for the current second quarter include no amortization of goodwill, as a result of the company's adoption of SFAS 142, effective February 1, 2002. A year ago, second quarter results included $1.4 million for amortization of goodwill. UTi's operating profit margin improved 60 basis points to 13.1 percent compared with 12.5 percent for the same period a year ago, excluding the amortization of goodwill in last year's second quarter.
Net income for the second quarter of fiscal 2003 rose 43 percent to $7.7 million, or $0.30 per diluted share. This compares with $5.4 million, or $0.21 per diluted share, in the prior-year corresponding period, which includes the amortization of goodwill equivalent to $0.05 per diluted share. Net income for the current second quarter reflects an effective tax rate of 28 percent compared with 28.7 percent for the fiscal 2002 second quarter.
"We are beginning to reap the benefits of sales efforts made over the past 12 months," said UTi's Chief Executive Officer Roger I. MacFarlane. "During the past year, we have focused on cost control measures while aggressively pursuing additional market share. We have already realized operating margin improvement through cost controls, and our revenues are now reflecting the investments we have made in developing major customer relationships. We are now two quarters into our five-year NextLeap strategic plan, and our employees are clearly delivering progress against each of our key growth metrics, including net revenue growth and operating margin improvement."
MacFarlane added, "The strength of our global network was evidenced this quarter, with gross revenue gains compared with a year ago of 50% in Europe, 43% in Asia Pacific, and slightly higher gross revenues in Africa, despite steep currency declines in that region. Although gross revenues in the Americas for this quarter were flat compared with the corresponding quarter last year, we are encouraged by the 11 percent gross revenue increase in that region for the current quarter over the first quarter of fiscal 2003, given the tough export market in the U.S. Also, while Europe benefited from our strategic acquisition of Grupo SLi earlier in the year, excluding SLi, the European region produced solid organic growth with a 34 percent increase in gross revenues.
"We are also encouraged by growth across all lines of our business, with airfreight and ocean freight volumes reaching record levels, especially boosted by strong volumes from Asia to the U.S. Despite yield pressures created by tightening capacity in Asia, our airfreight yield of 25 percent softened only slightly from the preceding fiscal 2003 first quarter. In addition, our contract logistics business is becoming an increasingly important growth driver for our company," MacFarlane added.
For the six-month period ended July 31, 2002, gross revenues improved 18 percent to $510.5 million from $434.4 million for the same period last year. Net revenues totaled $164.5 million, a 7 percent increase over $153.1 million in the comparable period a year ago. On a constant currency basis using exchange rates in effect for the first half of fiscal 2002, gross revenues would have advanced 22 percent to $528.9 million and net revenues would have been $176.1 million, reflecting a growth rate of 15 percent over the year-ago period.
For the first half of fiscal 2003, operating income advanced 40 percent to $19.4 million from $13.8 million in the corresponding period a year earlier. The company's operating profit margin improved 110 basis points to 11.8 percent compared with 10.7 percent for the same period a year ago, excluding the amortization of goodwill.
Net income increased 33 percent for the first half of fiscal 2003 to $12.5 million, or $0.48 per diluted share. This compares with $9.4 million, or $0.37 per diluted share, a year ago, which includes the amortization of goodwill equivalent to $0.10 per diluted share.
As of July 31, 2002, UTi reported total cash and cash equivalents, net of bank lines of credit and short-term bank borrowings, of $55.5 million. Through the first half of fiscal 2003, UTi generated $9.1 million in free cash flow.
About UTi Worldwide
UTi Worldwide Inc. is a global, non-asset based supply chain management business providing logistics services and planning and optimization solutions. The company's services include freight forwarding, customs brokerage, contract logistics and services such as coordination of shipping and storage of raw materials, supplies, components and finished goods. Through its supply chain planning and optimization services, the company assists clients in designing and implementing systems that improve predictability and visibility and reduce the overall costs of their supply chains. The company has a global and diverse customer base ranging from large multinational enterprises to smaller local businesses. For more information about the company visit its Web site at www.go2uti.com.
Investor Conference Call
UTi management will host an investor conference call on Wednesday, September 4, 2002, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company's financials and operations for the second quarter and first half of fiscal 2003. The call will be open to all interested investors through a live, listen-only audio broadcast available over the Internet at www.go2uti.com and www.companyboardroom.com. For those who are not able to listen to the live broadcast, the call will be archived for two weeks through 5:00 p.m. PDT, Wednesday, September 18, 2002 at both Web sites. A telephonic playback of the conference call also will be available from approximately 10:00 a.m. PDT, Wednesday, September 4, through 5:00 p.m. PDT, Friday, September 6, by calling 800-642-1687 (domestic) or 706-645-9291 (international) and using Reservation No. 5313225.
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 inventory build-up, economic slowdowns and consumer confidence; 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. 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,
2002 2001 2002 2001
---------- ---------- ---------- ----------
(Unaudited)
Gross revenues:
Airfreight
forwarding $ 152,053 $ 117,761 $ 283,110 $ 238,453
Ocean freight
forwarding 70,375 66,021 133,323 126,140
Customs brokerage 15,501 15,025 29,498 28,499
Contract
logistics and
other 36,890 20,610 64,546 41,297
---------- ---------- ---------- ----------
Total gross
revenues $ 274,819 $ 219,417 $ 510,477 $ 434,389
========== ========== ========== ==========
Net revenues:
Airfreight
forwarding $ 38,331 $ 37,396 $ 72,612 $ 73,449
Ocean freight
forwarding 16,608 14,574 31,436 27,971
Customs brokerage 14,531 14,492 27,947 27,547
Contract
logistics and
other 18,063 12,511 32,467 24,18
---------- ---------- ---------- ----------
Total net
revenues 87,533 78,973 164,462 153,149
---------- ---------- ---------- ----------
Staff costs 43,988 40,043 83,608 79,293
Depreciation 2,490 2,349 4,827 4,655
Amortization of
goodwill -- 1,395 -- 2,658
Other operating
expenses 29,609 26,701 56,669 52,754
---------- ---------- ---------- ----------
Operating income 11,446 8,485 19,358 13,789
Interest expense,
net (10) (437) (380) (652)
Gains/(losses) on
foreign exchange 56 (12) (315) (91)
---------- ---------- ---------- ----------
Pretax income 11,492 8,036 18,663 13,046
Income tax expense (3,216) (2,304) (5,294) (3,152)
---------- ---------- ---------- ----------
Income before
minority
interests 8,276 5,732 13,369 9,894
Minority interests (537) (323) (873) (465)
---------- ---------- ---------- ----------
Net income $ 7,739 $ 5,409 $ 12,496 $ 9,429
========== ========== ========== ==========
Diluted earnings
per ordinary
share $ 0.30 $ 0.21 $ 0.48 $ 0.37
Number of
weighted-average
diluted shares
outstanding
used for per
share
calculations 25,877,748 25,555,520 25,823,315 25,540,340
---------- ---------- ---------- ----------
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
July 31, January 31,
2002 2002
--------- ---------
(Unaudited)
ASSETS
Cash and cash equivalents $ 79,265 $ 87,594
Trade receivables, net 216,000 180,866
Deferred income tax assets 1,490 1,890
Other current assets 25,279 21,628
--------- ---------
Total current assets 322,034 291,978
Property, plant and equipment, net 36,371 31,185
Goodwill 82,777 76,611
Investments 259 215
Deferred income tax assets 1,623 1,431
Other non-current assets 3,670 3,191
--------- ---------
Total assets $ 446,734 $ 404,611
========= =========
LIABILITIES & SHAREHOLDERS' EQUITY
Bank lines of credit $ 13,802 $ 21,062
Short-term borrowings 12,256 11,518
Current portion of capital
lease obligations 2,427 1,780
Trade payables and other
accrued liabilities 200,328 173,113
Income taxes payable 6,805 4,743
Deferred income tax liabilities 466 842
--------- ---------
Total current liabilities 236,084 213,058
Long-term liabilities:
Long-term borrowings 359 1,192
Capital lease obligations 6,817 5,726
Deferred income taxes 1,681 1,566
Retirement fund obligations 820 693
--------- ---------
Total long-term liabilities 9,677 9,177
Minority interests 3,076 2,522
Shareholders' equity:
Common stock 207,660 207,143
Retained earnings 47,175 36,608
Accumulated other
comprehensive loss (56,938) (63,897)
--------- ---------
Total shareholders' equity 197,897 179,854
--------- ---------
Total liabilities and
shareholders' equity $ 446,734 $ 404,611
========= =========
UTi Worldwide Inc.
Consolidated Statements of Cash Flows
(in thousands)
Six Months Ended
July 31,
2002 2001
-------- --------
(Unaudited)
OPERATING ACTIVITIES:
Net income $ 12,496 $ 9,429
Adjustments to reconcile net
income to net cash
provided by operations:
Stock compensation costs 91 95
Depreciation 4,827 4,655
Amortization of goodwill -- 2,658
Deferred income taxes 49 127
Loss/(gain) on disposal of
property, plant and equipment 121 (52)
Other 873 340
Changes in operating assets
and liabilities:
(Increase)/decrease in trade
receivables and other
current assets (21,817) 18,452
Increase/(decrease) in trade
payables and other
current liabilities 18,600 (17,177)
-------- --------
Net cash provided by
operating activities 15,240 18,527
-------- --------
INVESTING ACTIVITIES:
Purchases of property,
plant and equipment (4,542) (3,305)
Proceeds from disposal of
property, plant and equipment 307 428
Acquisition of subsidiaries and
contingent earn-out payments (6,606) (4,853)
Other (25) 240
-------- --------
Net cash used in investing
activities (10,866) (7,490)
-------- --------
FINANCING ACTIVITIES:
Decrease in bank lines of credit (7,259) (15,461)
Long-term borrowings - advanced -- 135
Long-term borrowings - repaid (968) (39)
Repayments of capital lease obligations (2,263) (567)
Decrease in minority interests (170) (401)
Net proceeds from the issuance
of ordinary shares 426 --
Dividends paid (1,929) (1,924)
Other (57) 16
-------- --------
Net cash used in financing
activities (12,220) (18,241)
-------- --------
Net decrease in cash and
cash equivalents (7,846) (7,204)
Cash and cash equivalents at
beginning of period 87,594 98,372
Effect of foreign exchange rate
changes on cash and cash
equivalents (483) (1,615)
-------- --------
Cash and cash equivalents
at end of period $ 79,265 $ 89,553
======== ========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three Months Ended July 31, 2002
(Unaudited)
Europe Americas AsiaPacific
-------- -------- --------
Gross revenues from external
customers $ 93,229 $ 68,561 $ 79,375
======== ======== ========
Net revenues $ 24,927 $ 23,634 $ 17,340
Staff costs 13,341 13,771 7,175
Depreciation 844 503 487
Other operating expenses 7,050 7,406 4,912
-------- -------- --------
Operating income/(loss) $ 3,692 $ 1,954 $ 4,766
======== ======== ========
Africa Corporate Total
-------- -------- --------
Gross revenues from external
customers $ 33,654 $ -- $274,819
======== ======== ========
Net revenues $ 21,632 $ -- $ 87,533
Staff costs 8,585 1,116 43,988
Depreciation 462 194 2,490
Other operating expenses 9,264 977 29,609
-------- -------- --------
Operating income/(loss) $ 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
========
Three Months Ended July 31, 2001
(Unaudited)
Europe Americas AsiaPacific
-------- -------- --------
Gross revenues from external
customers $ 62,027 $ 68,959 $ 55,470
======== ======== ========
Net revenues $ 15,317 $ 24,010 $ 15,452
Staff costs 8,533 14,662 6,643
Depreciation 574 623 405
Amortization of goodwill 185 829 303
Other operating expenses 4,043 7,014 4,766
-------- -------- --------
Operating income/(loss) $ 1,982 $ 882 $ 3,335
======== ======== ========
Africa Corporate Total
-------- -------- --------
Gross revenues from external
customers $ 32,961 $ -- $219,417
======== ======== ========
Net revenues $ 24,194 $ -- $ 78,973
Staff costs 9,167 1,038 40,043
Depreciation 646 101 2,349
Amortization of goodwill 78 -- 1,395
Other operating expenses 10,972 (94) 26,701
-------- -------- --------
Operating income/(loss) $ 3,331 $ (1,045) 8,485
======== ========
Interest expense, net (437)
Losses on foreign
exchange (12)
--------
Pretax income 8,036
Income tax expense (2,304)
--------
Income before minority
interests $ 5,732
========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Six Months Ended July 31, 2002
(Unaudited)
Europe Americas AsiaPacific
--------- --------- ---------
Gross revenues from
external customers $ 172,467 $ 130,103 $ 144,529
========= ========= =========
Net revenues $ 46,729 $ 45,342 $ 32,181
Staff costs 24,727 27,020 13,812
Depreciation 1,603 1,141 946
Other operating expenses 13,378 14,349 9,450
--------- --------- ---------
Operating income/(loss) $ 7,021 $ 2,832 $ 7,973
========= ========= =========
Africa Corporate Total
--------- --------- ---------
Gross revenues from external
customers $ 63,378 $ -- $ 510,477
========= ========= =========
Net revenues $ 40,210 $ -- $ 164,462
Staff costs 15,974 2,075 83,608
Depreciation 872 265 4,827
Other operating expenses 17,023 2,469 56,669
--------- --------- ---------
Operating income/(loss) $ 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
=========
Six Months Ended July 31, 2001
(Unaudited)
Europe Americas AsiaPacific
--------- --------- ---------
Gross revenues from
external customers $ 126,595 $ 134,741 $ 110,575
========= ========= =========
Net revenues $ 30,193 $ 47,978 $ 28,810
Staff costs 17,163 29,092 12,871
Depreciation 1,154 1,258 785
Amortization of goodwill 334 1,561 607
Other operating expenses 7,877 14,546 8,910
--------- --------- ---------
Operating income/(loss) $ 3,665 $ 1,521 $ 5,637
========= ========= =========
Africa Corporate Total
--------- --------- ---------
Gross revenues from external
customers $ 62,478 $ -- $ 434,389
========= ========= =========
Net revenues $ 46,168 $ -- $ 153,149
Staff costs 18,035 2,132 79,293
Depreciation 1,283 175 4,655
Amortization of goodwill 156 -- 2,658
Other operating expenses 21,393 28 52,754
--------- --------- ---------
Operating income/(loss) $ 5,301 $ (2,335) 13,789
========= =========
Interest expense, net (652)
Losses on foreign exchange (91)
---------
Pretax income 13,046
Income tax expense (3,152)
---------
Income before minority interests $ 9,894
=========
UTi Worldwide Inc.
Amortization Impact of Adoption of SFAS No. 142
"Goodwill and Other Intangible Assets"
(in thousands, except per share amounts)
Three months ended Six months ended
July 31, July 31,
----------------- -----------------
2002 2001 2002 2001
------- ------- ------- -------
Operating income:
As reported $11,446 $ 8,485 $19,358 $13,789
Add back amortization
of goodwill -- 1,395 -- 2,658
------- ------- ------- -------
Adjusted operating income $11,446 $ 9,880 $19,358 $16,447
======= ======= ======= =======
Net income:
As reported $ 7,739 $ 5,409 $12,496 $ 9,429
Add back amortization of
goodwill, net of tax -- 1,337 -- 2,537
------- ------- ------- -------
Adjusted net income $ 7,739 $ 6,746 $12,496 $11,966
======= ======= ======= =======
Diluted earnings per share:
As reported $ 0.30 $ 0.21 $ 0.48 $ 0.37
Add back amortization of
goodwill, net of tax -- 0.05 -- 0.10
------- ------- ------- -------
Adjusted diluted earnings
per share $ 0.30 $ 0.26 $ 0.48 $ 0.47