LONG BEACH, Calif., Sept. 6, 2007 (PRIME NEWSWIRE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported financial results for its second fiscal quarter ended July 31, 2007, reflecting continued revenue growth over the prior-year comparative quarter.
For the second quarter of fiscal 2008, gross revenues grew 17 percent to $1.0 billion, from $890.1 million in the corresponding prior-year period. Net revenues in the fiscal 2008 second quarter rose 20 percent to $366.8 million from $305.4 million in the same period a year ago. The gross and net revenue gains for the fiscal 2008 second quarter were attributed to organic growth across all geographic regions, as well as contributions from acquisitions made by the company since May 1, 2006. The company's gross and net revenues, excluding acquisitions, grew 14 percent in the fiscal 2008 second quarter over the prior-year period, despite an industry-wide softening in freight volumes from China to North America.
Operating income in the second quarter of fiscal 2008 totaled $43.3 million. This compares with operating income of $50.5 million in the fiscal 2007 second quarter, which included a $10.8 million positive impact related to the accounting treatment of earn-out payments associated with the company's Grupo SLi acquisition. Operating income as a percentage of net revenues for the second quarter of fiscal 2008 was 11.8 percent.
"Most areas of our business showed progress in the second quarter as we focused on managing costs while continuing to grow revenue across multiple business lines," said Roger I. MacFarlane, chief executive officer of UTi Worldwide. "We are pleased with our operating margin improvement from the first quarter of this year, particularly given the tougher growth environment in the China to North America trade lane. In addition to actions already taken, we further tightened cost management processes and controls. Improving operating margins remains a top priority as one of the five platforms under our new five-year strategy called CLIENTasONE."
Net income in the fiscal 2008 second quarter was $27.7 million, or $0.28 per diluted share. This compares with net income of $34.5 million, or $0.35 per diluted share, in the fiscal 2007 second quarter, which included a $10.8 million, or $0.11 per diluted share, positive impact related to the accounting treatment of earn-out payments associated with the company's Grupo SLi acquisition.
Fiscal 2008 Six-Month Results
For the six-month period ended July 31, 2007, gross revenues increased 20 percent to $2.0 billion, from $1.7 billion for the same period a year ago. Net revenues rose 22 percent to $702.9 million in the first half of fiscal 2008, compared with $577.0 million in the first half of fiscal 2007.
Operating income for the first six months of fiscal 2008 totaled $74.7 million, versus $80.5 million in the comparable prior-year period. Net income for the first half of fiscal 2008 was $45.8 million, or $0.46 per diluted share. This compares with $53.8 million, or $0.54 per diluted share, in the first half of fiscal 2007. Both operating income and net income for the first half of fiscal 2007 included a positive impact of $13.7 million, or $0.14 per diluted share, related to the accounting treatment of the company's Grupo SLi acquisition-related earn-out payments.
"Guided by the clear vision articulated in CLIENTasONE, the focus remains on delivering improved performance and shareholder value, and we are confidently moving forward through the challenges of the current environment. UTi's entire team worldwide is fully committed to our long-term strategy of providing world-class services and integrated solutions that control and optimize each of our client's supply chains," MacFarlane said.
Fiscal 2008 Earnings Per Share Guidance
Based on the current operating environment which indicates to a slower rate of revenue growth in the China to North America trade lane and the continued weakness in the U.S. domestic trucking market, the company revised its previously stated fiscal 2008 full-year earnings per share guidance to the range of $1.09 to $1.15 per diluted share from $1.14 to $1.22 per diluted share. The company also reiterated its position that providing guidance for fiscal 2008 is not an indication of a change in practice in regard to providing guidance in future years.
Investor Conference Call
UTi management will host an investor conference call today, September 6, 2007, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company's financials and operations for the fiscal 2008 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 11:00 a.m. PDT, today, through September 13, 2007, by calling 800-642-1687 (domestic) or 706-645-9291 (international) and using replay passcode 13540024.
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. We believe that meaningful analysis of our financial performance requires an understanding of the factors underlying that performance and our 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, we have referred to gross and net revenue growth adjusted to exclude the impact of acquisitions made since the beginning of the comparative period. 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. This information is not intended to be considered in isolation or as a substitute for gross and net revenue growth calculated in accordance with U.S. GAAP.
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, CLIENTasONE, the company's long-term strategy, the company's discussion of its financial goals, including but not limited to margin improvement and the company's earnings per share guidance. Many important factors may cause the company's actual results to differ materially from those discussed in any such forward-looking statements, including integration risks associated with acquisitions, the ability to retain customers and management of acquisition targets; a challenging operating environment; increased competition; the impact of higher fuel costs; 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; 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 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, we cannot assure you 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 our 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.
UTi Worldwide Inc.
Condensed Consolidated Income Statement
(in thousands, except share and per share amounts)
Three months ended Six months ended
July 31, July 31,
---------------------- ------------------------
2007 2006 2007 2006
------ ------ ------ -----
(Unaudited)
Gross revenues:
Airfreight
forwarding $ 388,107 $341,532 $ 732,253 $ 649,102
Ocean freight
forwarding 265,124 234,216 497,414 440,749
Customs
brokerage 24,007 22,019 45,890 41,824
Contract
logistics 160,382 114,684 301,897 223,845
Distribution 124,637 124,554 243,486 202,350
Other 83,344 53,068 169,399 105,903
---------- -------- ---------- ----------
Total gross
revenues $1,045,601 $890,073 $1,990,339 $1,663,773
========== ======== ========== ==========
Net revenues:
Airfreight
forwarding $ 94,014 $ 81,485 $ 179,260 $ 156,374
Ocean freight
forwarding 42,775 36,281 79,750 67,810
Customs
brokerage 23,239 21,636 44,397 40,795
Contract
logistics 137,738 101,499 259,480 194,593
Distribution 35,088 40,952 70,601 69,970
Other 33,994 23,558 69,401 47,497
---------- -------- ---------- ----------
Total net
revenues 366,848 305,411 702,889 577,039
Staff costs 195,916 150,346 380,633 298,229
Depreciation
and
amortization 9,850 7,785 19,237 15,221
Amortization
of intangible
assets 2,053 2,192 4,038 4,043
Other operating
expenses 115,716 94,590 224,250 179,066
---------- -------- ---------- ----------
Operating
income 43,313 50,498 74,731 80,480
Interest
expense, net (3,738) (3,686) (7,829) (6,553)
Losses on
foreign exchange (166) (253) (534) (68)
---------- -------- ---------- ----------
Pretax income 39,409 46,559 66,368 73,859
Provision for
income taxes 10,921 10,602 18,888 17,696
---------- -------- ---------- ----------
Income before
minority
interests 28,488 35,957 47,480 56,163
Minority
interests (821) (1,453) (1,693) (2,335)
---------- -------- ---------- ----------
Net income (1) $ 27,667 $ 34,504 $ 45,787 $ 53,828
========== ======== ========== ==========
Basic earnings
per share $ 0.28 $ 0.36 $ 0.46 $ 0.56
Diluted earnings
per share $ 0.28 $ 0.35 $ 0.46 $ 0.54
Number of
weighted-
average shares
outstanding
used for per
share calculations:
Basic
shares 99,065,970 96,300,764 98,885,454 95,897,315
Diluted
shares 100,315,526 99,817,022 100,261,800 99,397,847
(1) In connection with our December 2006 restatement, net income for
the three and six months ended July 31, 2006 was increased by
$10,808 and $13,540, respectively, of non-cash items.
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
July 31, January 31,
2007 2007
------------ -----------
(Unaudited)
ASSETS
Cash and cash equivalents $ 273,244 $ 278,408
Trade receivables, net 763,316 662,804
Deferred income tax assets 13,673 10,889
Other current assets 65,450 57,563
------------ -----------
Total current assets 1,115,683 1,009,664
Property, plant and equipment, net 134,123 127,990
Goodwill and other intangible
assets, net 503,896 490,884
Investments 3,605 3,096
Deferred income tax assets 11,244 12,725
Other non-current assets 19,266 15,511
------------ -----------
Total assets $ 1,787,817 $ 1,659,870
============ ===========
LIABILITIES & SHAREHOLDERS' EQUITY
Bank lines of credit $ 74,383 $ 79,057
Short-term borrowings 1,277 2,808
Current portion of capital lease
obligations 15,861 13,550
Trade payables and other accrued
liabilities 660,208 603,575
Income taxes payable 21,355 15,333
Deferred income tax liabilities 3,059 3,954
------------ -----------
Total current liabilities 776,143 718,277
Long-term borrowings 211,086 211,458
Capital lease obligations 22,502 24,099
Deferred income tax liabilities 31,981 30,291
Retirement fund obligations 7,556 7,549
Other long-term liabilities 14,178 12,078
Minority interests 17,706 18,844
Commitments and contingencies
Shareholders' equity:
Common stock 427,775 419,111
Retained earnings 303,778 266,136
Accumulated other comprehensive
loss (24,888) (47,973)
------------ -----------
Total shareholders' equity 706,665 637,274
------------ -----------
Total liabilities and
shareholders' equity $ 1,787,817 $ 1,659,870
============ ===========
UTi Worldwide Inc.
Consolidated Statements of Cash Flows
(in thousands)
Six months ended
July 31,
-----------------------
2007 2006
--------- ---------
(Unaudited)
OPERATING ACTIVITIES:
Net income $ 45,787 $ 53,828
Adjustments to reconcile net income to net
cash used in operating activities:
Share-based compensation costs/
(benefits), net 1,304 (8,667)
Depreciation and amortization 19,237 15,221
Amortization of intangible assets 4,038 4,043
Deferred income taxes (1,857) (890)
Tax benefit relating to exercise of stock
options 296 800
Excess tax benefits from share-based
compensation (243) (717)
Loss/(gain) on disposal of property,
plant and equipment 6 (205)
Minority interest and other (20) 2,424
Changes in operating assets and
liabilities:
Increase in trade receivables (80,243) (105,237)
Increase in other current assets (5,435) (4,883)
Increase in trade payables 24,933 25,254
Increase in accrued liabilities and
other current liabilities 15,918 26,544
--------- ---------
Net cash provided by operating
activities 23,721 7,515
INVESTING ACTIVITIES:
Purchases of property, plant and
equipment (14,164) (10,881)
Proceeds from disposal of property, plant
and equipment 971 1,151
Decrease/(increase) in other
non-current assets 85 (5,948)
Acquisitions and contingent earn-out
payments (4,256) (199,284)
Other (501) (1,165)
--------- ---------
Net cash used in investing activities (17,865) (216,127)
FINANCING ACTIVITIES:
Decrease in borrowings under bank lines of
credit (3,166) (26,661)
Decrease in short-term borrowings (1,623) (1,148)
Proceeds from issuing of long-term
borrowings -- 199,325
Repayment of long-term borrowings (419) (1,887)
Repayments of capital lease obligations (9,427) (4,260)
Net proceeds from issuance of ordinary
shares 7,093 7,548
Excess tax benefits from share-based
compensation 243 717
Dividends paid (5,925) (5,775)
--------- ---------
Net cash (used in)/provided by financing
activities (13,224) 167,859
Effect of foreign exchange rate changes on
cash and cash equivalents 2,204 (10,229)
--------- ---------
Net decrease in cash and cash equivalents (5,164) (50,982)
Cash and cash equivalents at beginning of
period 278,408 246,510
--------- ---------
Cash and cash equivalents at end of
period $ 273,244 $ 195,528
========= =========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three months ended July 31, 2007
------------------------------------------------
Americas
Contract
Americas Logistics
Freight and Asia
EMENA Forwarding Distribution Pacific
--------- ---------- ------------ ---------
Gross revenue $ 260,500 $ 151,032 $ 208,026 $ 119,349
========= ========= ========= =========
Net revenue $ 83,605 $ 43,427 $ 120,166 $ 24,231
Staff costs 44,697 24,282 68,089 11,230
Depreciation and
amortization 1,967 601 3,279 547
Amortization of
intangible assets -- -- 1,783 --
Other operating
expenses 25,313 12,147 36,071 5,450
--------- --------- --------- ---------
Operating
income/(loss) $ 11,628 $ 6,397 $ 10,944 $ 7,004
========= ========= ========= =========
Interest expense,
net
Losses on foreign
exchange
Pretax income
Provision for
income taxes
Income before
minority
interests
Three months ended July 31, 2007
---------------------------------------------------
Global
Greater Specialized
China Africa Solutions Corporate Total
--------- ---------- --------- --------- ----------
Gross revenue $ 145,471 $ 142,660 $ 18,563 $ -- $1,045,601
========= ========= ======== ======== ==========
Net revenue $ 20,596 $ 58,247 $ 16,576 $ -- $ 366,848
Staff costs 7,693 26,577 7,830 5,518 195,916
Depreciation and
amortization 597 1,962 411 486 9,850
Amortization of
intangible assets 113 -- 157 -- 2,053
Other operating
expenses 5,854 20,261 6,127 4,493 115,716
--------- --------- -------- -------- ----------
Operating
income/(loss) $ 6,339 $ 9,447 $ 2,051 $(10,497) 43,313
========= ========= ======== ========
Interest expense,
net (3,738)
Losses on foreign
exchange (166)
----------
Pretax income 39,409
Provision for
income taxes 10,921
----------
Income before
minority
interests $ 28,488
==========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three months ended July 31, 2006
------------------------------------------------
Americas
Contract
Americas Logistics
Freight and Asia
EMENA Forwarding Distribution Pacific
--------- ---------- ------------ ---------
Gross revenue $ 215,863 $ 124,517 $ 175,462 $ 106,370
========= ========= ========= =========
Net revenue $ 63,942 $ 38,587 $ 95,025 $ 19,806
Staff costs 24,430 23,190 53,740 9,934
Depreciation and
amortization 1,611 537 2,185 418
Amortization of
intangible assets -- -- 1,915 --
Other operating
expenses 17,829 9,987 28,961 4,745
--------- --------- --------- ---------
Operating
income/(loss) $ 20,072 $ 4,873 $ 8,224 $ 4,709
========= ========= ========= =========
Interest expense,
net
Losses on foreign
exchange
Pretax income
Provision for
income taxes
Income before
minority
interests
Three months ended July 31, 2006
---------------------------------------------------
Global
Greater Specialized
China Africa Solutions Corporate Total
--------- ---------- --------- --------- ---------
Gross revenue $ 123,579 $ 130,195 $ 14,087 $ -- $ 890,073
========= ========= ======== ======== ==========
Net revenue $ 18,897 $ 53,717 $ 15,437 $ -- $ 305,411
Staff costs 6,527 23,295 6,179 3,051 150,346
Depreciation and
amortization 440 1,794 289 511 7,785
Amortization of
intangible assets 114 -- 163 -- 2,192
Other operating
expenses 4,975 18,946 5,094 4,053 94,590
--------- --------- -------- -------- ----------
Operating
income/(loss) $ 6,841 $ 9,682 $ 3,712 $ (7,615) 50,498
========= ========= ======== ========
Interest expense,
net (3,686)
Losses on foreign
exchange (253)
----------
Pretax income 46,559
Provision for
income taxes 10,602
----------
Income before
minority
interests $ 35,957
==========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Six months ended July 31, 2007
------------------------------------------------
Americas
Contract
Americas Logistics
Freight and Asia
EMENA Forwarding Distribution Pacific
--------- ---------- ------------ ---------
Gross revenue $ 500,006 $ 285,642 $ 403,956 $ 226,407
========= ========= ========= =========
Net revenue $ 159,457 $ 82,953 $ 232,970 $ 46,243
Staff costs 88,122 47,343 130,450 22,098
Depreciation and
amortization 3,884 1,201 6,474 1,061
Amortization of
intangible assets -- -- 3,502 --
Other operating
expenses 47,307 23,245 71,702 10,682
--------- --------- --------- ---------
Operating
income/(loss) $ 20,144 $ 11,164 $ 20,842 $ 12,402
========= ========= ========= =========
Interest expense,
net
Losses on foreign
exchange
Pretax income
Provision for
income taxes
Income before
minority
interests
Six months ended July 31, 2007
---------------------------------------------------
Global
Greater Specialized
China Africa Solutions Corporate Total
--------- ---------- --------- --------- ----------
Gross revenue $ 263,720 $ 275,118 $ 35,490 $ -- $1,990,339
========= ========= ======== ======== ==========
Net revenue $ 38,853 $ 110,923 $ 31,490 $ -- $ 702,889
Staff costs 15,053 51,590 14,798 11,179 380,633
Depreciation and
amortization 1,202 3,711 798 906 19,237
Amortization of
intangible assets 224 -- 312 -- 4,038
Other operating
expenses 11,690 39,420 11,283 8,921 224,250
--------- --------- -------- -------- ----------
Operating
income/(loss) $ 10,684 $ 16,202 $ 4,299 $(21,006) 74,731
========= ========= ======== ========
Interest expense,
net (7,829)
Losses on foreign
exchange (534)
----------
Pretax income 66,368
Provision for
income taxes 18,888
----------
Income before
minority
interests $ 47,480
==========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Six months ended July 31, 2006
-------------------------------------------------
Americas
Contract
Americas Logistics
Freight and Asia
EMENA Forwarding Distribution Pacific
--------- ---------- ------------ --------
Gross revenue $ 399,956 $ 238,272 $ 302,522 $208,119
========= ========= ========= ========
Net revenue $ 118,271 $ 73,269 $ 175,839 $ 38,686
Staff costs 53,293 44,966 102,410 18,670
Depreciation
and
amortization 3,019 1,075 4,252 835
Amortization
of intangible -- -- 3,468 --
assets
Other
operating
expenses 33,936 19,770 51,133 9,122
--------- --------- --------- --------
Operating
income/(loss) $ 28,023 $ 7,458 $ 14,576 $ 10,059
========= ========= ========= ========
Interest
expense, net
Losses on
foreign
exchange
Pretax income
Provision for
income taxes
Income before
minority
interests
Six months ended July 31, 2006
--------------------------------------------------------
Global
Greater Specialized
China Africa Solutions Corporate Total
-------- -------- ----------- --------- ----------
Gross revenue $229,510 $252,032 $33,362 $ -- $1,663,773
======== ======== ======= ========= ==========
Net revenue $ 35,654 $105,499 $29,821 $ -- $ 577,039
Staff costs 12,723 47,513 12,079 6,575 298,229
Depreciation
and
amortization 858 3,532 635 1,015 15,221
Amortization
of
intangible
assets 229 -- 346 -- 4,043
Other
operating
expenses 9,629 38,684 9,742 7,050 179,066
-------- -------- ------- --------- ---------
Operating
income/
(loss) $ 12,215 $ 15,770 $ 7,019 $ (14,640) 80,480
Interest
expense,
net (6,553)
Losses on
foreign
exchange (68)
--------
Pretax
income 73,859
Provision for
income taxes 17,696
--------
Income
before
minority
interests $ 56,163
========
UTi Worldwide Inc.
Revenue Growth Reconciliation
(in thousands)
(Unaudited)
Set forth below is a reconciliation of our growth, excluding
acquisitions, in our gross and net revenues over the corresponding
prior-year period.
Growth
excluding
acquisitions
------------
GROSS REVENUES:
Three months ended July 31, 2007
(as reported) $ 1,045,601
Less: Acquisitions impact (2) (27,334)
-----------
Three months ended July 31, 2007
(as adjusted) $ 1,018,267
===========
Three months ended July 31, 2006 $ 890,073 14%
=========== ====
NET REVENUES:
Three months ended July 31, 2007
(as reported) $ 366,848
Less: Acquisitions impact (3) (18,342)
-----------
Three months ended July 31, 2007
(as adjusted) $ 348,506
===========
Three months ended July 31, 2006 $ 305,411 14%
=========== ====
(2) Represents gross revenues attributable to acquisitions that were
completed on or after May 1, 2006.
(3) Represents net revenues attributable to acquisitions that were
completed on or after May 1, 2006.
UTi Worldwide Inc.
Revenue Growth Reconciliation
(in thousands)
(Unaudited)
Set forth below is a reconciliation of our growth, excluding
acquisitions, in our gross and net revenues over the corresponding
prior-year period.
Growth
excluding
acquisitions
------------
GROSS REVENUES:
Six months ended July 31, 2007
(as reported) $ 1,990,339
Less: Acquisitions impact (4) (98,118)
-----------
Six months ended July 31, 2007
(as adjusted) $ 1,892,221
===========
Six months ended July 31, 2006 $ 1,663,773 14%
=========== ====
NET REVENUES:
Six months ended July 31, 2007
(as reported) $ 702,889
Less: Acquisitions impact (5) (45,385)
-----------
Six months ended July 31, 2007
(as adjusted) $ 657,504
===========
Six months ended July 31, 2006 $ 577,039 14%
=========== ====
(4) Represents gross revenues attributable to acquisitions that were
completed on or after February 1, 2006.
(5) Represents net revenues attributable to acquisitions that were
completed on or after February 1, 2006.