RANCHO DOMINGUEZ, Calif., Dec. 3, 2002 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported double-digit growth in revenues, operating income and net income for the three months ended October 31, 2002, over the corresponding period a year ago.
Gross revenues for the 2003 fiscal third quarter increased 36 percent to $321.5 million from $235.6 million in last year's comparable period. Net revenues grew 35 percent to $107.5 million in the current third quarter from $79.6 million a year earlier. Standard Corporation, which was acquired effective October 1, 2002, contributed gross revenues of $12.7 million during the third quarter of fiscal 2003. Without the contribution from Standard, gross revenues would have advanced 31 percent and net revenues would have advanced 19 percent for the three months ended October 31, 2002.
"All regions contributed to the growth in revenues, even in a difficult economic environment," said UTi's Chief Executive Officer Roger I. MacFarlane. "Gross revenues in Europe increased 45 percent, helped by our Grupo SLi acquisition at the beginning of the year, and Africa performed exceptionally well, given a 22 percent decline in the South African rand during the period from a year ago. Asia Pacific was up 51 percent, boosted by heightened airfreight driven by the West Coast port labor disputes. Americas' results also benefited from the company's acquisition of Standard."
UTi's fiscal 2003 third quarter results reflect growth across all revenue categories. With this year's acquisition of Standard and Grupo SLi, contract logistics is now UTi's second largest net revenue category, contributing 19 percent of net revenues. Airfreight contributed 39 percent of net revenues, ocean freight 16 percent and customs brokerage 15 percent for the period.
The company posted a 50 percent increase in operating income in the current third quarter to $14.2 million, compared with $9.5 million in the corresponding fiscal 2002 period. Results for the current third quarter do not include any amortization of goodwill, but include estimated amortization expense related to the estimated fair value of intangible assets acquired with Standard. A year ago, third quarter results included $1.5 million for amortization of goodwill. Excluding the amortization of goodwill and other intangible assets, UTi's operating profit margin was 13.3 percent, down from 13.8 percent for the same period a year ago. Without Standard, which has historically operated at lower margin levels than UTi's traditional margins, the operating profit ratio for the fiscal third quarter improved over the prior year quarter. Standard reduced the company's operating margin in the current third quarter and may continue to dampen the company's operating margin going forward. The company is still in the process of determining the final allocation of the purchase price for Standard, which may impact the amortization of intangible assets in the future.
Net income for the third quarter of fiscal 2003 grew 60 percent to $9.5 million, or $0.37 per diluted share, from $5.9 million, or $0.23 per diluted share, in the prior-year corresponding period, which included amortization of goodwill equivalent to $0.06 per diluted share. Net income for the current third quarter reflects an effective tax rate of 28 percent, compared with 29 percent for the fiscal 2002 third quarter.
"We continue to focus on our NextLeap initiatives that make up our five-year strategic operating plan," MacFarlane said. "Our acquisitions of Standard and Grupo SLi underscore our emphasis on expanding UTi's logistics solutions under NextLeap. We continue to invest in the future of UTi and now have approximately 500 full-time sales personnel positioned around the globe. In line with our NextLeap commitment to become the primary logistics partner to our global customers, we have strengthened our sales organization with specialists who focus on providing global solutions to our customers from our expanded range of services."
MacFarlane added: "As we enter the fourth quarter, we are uncertain of the full impact on UTi's business from the tentatively resolved West Coast port labor dispute. We have seen in recent weeks a drop in both airfreight demand and pricing in our Asia to U.S. lane segment. We also do not see any change in the seasonality factor of our fourth quarter, which includes December and January -- both traditionally weak international trading months. Furthermore, the global business environment remains uncertain at best. Nevertheless, we are optimistic in our outlook for UTi's performance in fiscal 2004 as we continue to drive operating improvements and realize full year contributions from our acquisition of Standard."
For the nine-month period ended October 31, 2002, gross revenues improved 24 percent to $832.0 million from $670.0 million for the corresponding period a year ago. Net revenues totaled $272.0 million, a 17 percent increase over $232.8 million in the comparable period a year ago. Excluding the results of Standard, gross revenues advanced 22 percent and net revenues grew 11 percent, comparing the current year-to-date over the comparable prior-year period.
Operating income advanced 44 percent to $33.6 million from $23.3 million in the corresponding nine-month period a year ago. The company's operating profit margin improved 60 basis points to 12.4 percent, compared with 11.8 percent for the fiscal 2002 nine months, excluding the amortization of goodwill and other intangible assets.
Net income year-to-date increased 43 percent to $22.0 million, or $0.85 per diluted share. This compares with $15.4 million, or $0.60 per diluted share, a year ago, which includes the amortization of goodwill equivalent to $0.16 per diluted share.
At October 31, 2002, UTi reported total cash and cash equivalents, net of bank lines of credit and short-term bank borrowings, of $12 million. Through the first nine months of fiscal 2003, UTi generated $17 million in free cash flow.
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 on Tuesday, December 3, 2002, at 11:00 a.m. EST (8:00 a.m. PST) to review the company's financials and operations for the third quarter and nine-month period ended October 31, 2002. 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 week through 8:00 p.m. EST, Tuesday, December 10, 2002, at both Web sites. A telephonic playback of the conference call also will be available from 1:00 p.m. EST, Tuesday, December 3, through 8:00 p.m. EST, Friday, December 6, by calling (800) 633-8284 (domestic) or (402) 977-9140 (international) and using Reservation No. 21043595.
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 submissions and 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 Nine Months Ended
October 31, October 31,
2002 2001 2002 2001
------------------ -----------------
(Unaudited)
Gross revenues:
Airfreight forwarding $ 174,389 $ 129,941 $ 457,499 $ 368,394
Ocean freight
Forwarding 76,082 66,578 209,405 192,718
Customs brokerage 17,275 14,395 46,773 42,894
Contract logistics 25,850 6,435 51,321 17,773
Other 27,925 18,256 67,000 48,215
--------- --------- --------- ---------
Total gross revenues $ 321,521 $ 235,605 $ 831,998 $ 669,994
========= ========= ========= =========
Net revenues:
Airfreight forwarding $ 42,431 $ 36,955 $ 115,043 $ 110,404
Ocean freight
Forwarding 17,079 15,415 48,515 43,386
Customs brokerage 16,476 14,015 44,423 41,562
Contract logistics 20,612 4,243 36,150 10,993
Other 10,931 9,009 27,860 26,441
--------- --------- --------- ---------
Total net revenues 107,529 79,637 271,991 232,786
--------- --------- --------- ---------
Staff costs 52,436 39,571 136,044 118,864
Depreciation 2,790 2,338 7,617 6,993
Amortization of goodwill
and other intangible
assets 70 1,507 70 4,165
Other operating expenses 37,995 26,745 94,664 79,499
--------- --------- --------- ---------
Operating income 14,238 9,476 33,596 23,265
Interest expense, net (46) (297) (426) (949)
Losses on foreign
exchange (394) (369) (709) (460)
--------- --------- --------- ---------
Pretax income 13,798 8,810 32,461 21,856
Income tax expense (3,891) (2,524) (9,185) (5,676)
--------- --------- --------- ---------
Income before minority
interests 9,907 6,286 23,276 16,180
Minority interests (437) (355) (1,310) (820)
--------- --------- --------- ---------
Net income $ 9,470 $ 5,931 $ 21,966 $ 15,360
========= ========= ========= =========
Diluted earnings per
ordinary share $ 0.37 $ 0.23 $ 0.85 $ 0.60
Number of weighted-
average diluted
shares outstanding
used for per share
calculations 25,822,416 25,292,731 25,797,360 25,442,559
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
October 31, January 31,
2002 2002
---------- ----------
(Unaudited)
ASSETS
Cash and cash equivalents
(including restricted cash of
$4,000 and $0 as of
October 31, 2002 and
January 31, 2002, respectively) $ 69,365 $ 87,594
Trade receivables, net 239,709 180,866
Deferred income tax assets 1,831 1,890
Other current assets 44,493 21,628
---------- ----------
Total current assets 355,398 291,978
Property, plant and equipment, net 39,666 31,185
Goodwill and other intangible assets,
net 115,108 76,611
Investments 1,074 215
Deferred income tax assets 1,647 1,431
Other non-current assets 3,808 3,191
---------- ----------
Total assets $ 516,701 $ 404,611
========== ==========
LIABILITIES & SHAREHOLDERS' EQUITY
Bank lines of credit $ 45,957 $ 21,062
Short-term borrowings 11,728 11,518
Current portion of capital
lease obligations 2,248 1,780
Trade payables and other accrued
Liabilities 223,951 173,113
Income taxes payable 8,871 4,743
Deferred income tax liabilities 460 842
---------- ----------
Total current liabilities 293,215 213,058
Long-term liabilities:
Long-term borrowings 186 1,192
Capital lease obligations 6,547 5,726
Deferred income taxes 1,703 1,566
Retirement fund obligations 840 693
---------- ----------
Total long-term liabilities 9,276 9,177
Minority interests 2,796 2,522
Shareholders' equity:
Common stock 210,835 207,143
Retained earnings 56,645 36,608
Accumulated other comprehensive
loss (56,066) (63,897)
---------- ----------
Total shareholders' equity 211,414 179,854
---------- ----------
Total liabilities and
shareholders' equity $ 516,701 $ 404,611
========== ==========
UTi Worldwide Inc.
Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended
October 31,
2002 2001
-----------------------
(Unaudited)
OPERATING ACTIVITIES:
Net income $ 21,966 $ 15,360
Adjustments to reconcile net income
to net cash provided by operations:
Stock compensation costs 137 143
Depreciation 7,617 6,993
Amortization of goodwill and
other intangible assets 70 4,165
Deferred income taxes (291) 280
Loss/(gain) on disposal of
property, plant and equipment 129 (195)
Other 1,349 765
Changes in operating assets
and liabilities:
(Increase)/decrease in
trade receivables and other
current assets (41,014) 11,347
Increase/(decrease) in trade
payables and other current
liabilities 35,703 (9,234)
---------- ----------
Net cash provided by operating
activities 25,666 29,624
---------- ----------
INVESTING ACTIVITIES:
Purchases of property, plant and
equipment (7,113) (5,335)
Proceeds from disposal of property,
plant and equipment 365 726
Acquisition of subsidiaries and
contingent earn-out payments (54,756) (7,067)
Other (442) 63
---------- ----------
Net cash used in investing
Activities (61,946) (11,613)
---------- ----------
FINANCING ACTIVITIES:
Increase/(decrease) in bank lines of
credit 24,894 (23,991)
Increase/(decrease) in short-term
borrowings 181 (1,055)
Long-term borrowings -- advanced -- 135
Long-term borrowings -- repaid (1,109) (225)
Repayments of capital lease obligations (2,515) (856)
Decrease in minority interests (935) (472)
Net proceeds from the issuance of
ordinary shares 555 203
Dividends paid (1,929) (1,924)
Other (1,172) --
---------- ----------
Net cash provided by/(used in)
financing activities 17,970 (28,185)
---------- ----------
Net decrease in cash and cash
equivalents (18,310) (10,174)
Cash and cash equivalents at beginning
of period 87,594 98,372
Effect of foreign exchange rate
changes on cash and cash equivalents 81 (4,801)
---------- ----------
Cash and cash equivalents at end
of period $ 69,365 $ 83,397
========== ==========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three Months Ended October 31, 2002
-----------------------------------
(Unaudited)
Europe Amer- Asia- Africa Corp- Total
icas Pacific orate
------ ------ ------- ------ ------ ------
Gross
revenues
from
external
customers $ 99,422 $ 82,110 $ 102,159 $ 37,830 $ -- $ 321,521
======== ======== ========= ======== ====== =========
Net
Revenues $ 26,013 $ 37,450 $ 19,623 $ 24,443 $ -- $ 107,529
Staff costs 14,341 20,364 7,818 8,819 1,094 52,436
Depreciation 889 782 502 465 152 2,790
Amortization
of intangible
assets -- 70 -- -- -- 70
Other
operating
expenses 7,540 14,056 5,105 10,162 1,132 37,995
-------- -------- ---------- ------- ------ --------
Operating
income/
(loss) $3,243 $ 2,178 $ 6,198 $ 4,997 $(2,378) 14,238
======== ======== ========= ======= =======
Interest
expense,
net (46)
Losses on
foreign
exchange (394)
---------
Pretax income 13,798
Income tax
expense (3,891)
---------
Income before
minority
interests $ 9,907
=========
Three Months Ended October 31, 2001
-----------------------------------
(Unaudited)
Europe Amer- Asia- Africa Corp- Total
icas Pacific orate
------ ------ ------- ------ ------ ------
Gross
revenues
from
external
customers $ 68,743 $ 65,066 $ 67,451 $ 34,345 $ -- $235,605
======== ======== ======== ======== ====== ========
Net revenues $ 15,995 $ 24,629 $ 16,339 $ 22,674 $ -- $ 79,637
Staff costs 8,832 14,820 6,649 8,241 1,029 39,571
Depreciation 641 644 428 552 73 2,338
Amortization
of goodwill 148 924 364 71 -- 1,507
Other
operating
expenses 4,572 8,043 4,697 9,480 (47) 26,745
-------- -------- -------- ------- ------ -------
Operating
income/(loss) $ 1,802 $ 198 $ 4,201 $ 4,330 $(1,055) 9,476
======== ======== ========= ======= =======
Interest
expense, net (297)
Losses on
foreign
exchange (369)
--------
Pretax income 8,810
Income tax
expense (2,524)
--------
Income before
minority
interests $ 6,286
========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Nine Months Ended October 31, 2002
----------------------------------
(Unaudited)
Europe Amer- Asia- Africa Corp- Total
icas Pacific orate
------ ------ ------- ------ ------ ------
Gross
revenues
from
external
cust-
omers $ 271,889 $ 212,213 $ 246,688 $ 101,208 $ -- $831,998
======== ======== ======== ======== ====== ========
Net
Revenues $ 72,742 $ 82,792 $ 51,804 $ 64,653 $ -- $271,991
Staff
costs 39,068 47,384 21,630 24,793 3,169 136,044
Depreciation 2,492 1,923 1,448 1,337 417 7,617
Amortization
of
intangible
assets -- 70 -- -- -- 70
Other
operating
expenses 20,918 28,405 14,555 27,185 3,601 94,664
-------- -------- -------- ------- ------ -------
Operating
income/
(loss) $ 10,264 $ 5,010 $ 14,171 $ 11,338 $(7,187) 33,596
======== ======== ========= ======== =======
Interest
expense,
net (426)
Losses on
foreign
exchange (709)
--------
Pretax
income 32,461
Income tax
expense (9,185)
--------
Income
before
minority
interests $ 23,276
========
Nine Months Ended October 31, 2001
----------------------------------
(Unaudited)
Europe Amer- Asia- Africa Corp- Total
icas Pacific orate
------ ------ ------- ------ ------ ------
Gross
revenues
from
external
customers $ 195,338 $ 199,807 $ 178,026 $ 96,823 $ -- $669,994
======== ======== ======== ======== ====== =======
Net
revenues $ 46,188 $ 72,607 $ 45,149 $ 68,842 $ -- $232,786
Staff costs 25,995 43,912 19,520 26,276 3,161 118,864
Depreciation 1,795 1,902 1,213 1,835 248 6,993
Amortization
of goodwill 482 2,485 971 227 -- 4,165
Other
operating
expenses 12,449 22,589 13,607 30,873 (19) 79,499
------- -------- -------- ------- ------ -------
Operating
income/
(loss) $ 5,467 $ 1,719 $ 9,838 $ 9,631 $(3,390) 23,265
======== ======== ========= ======== =======
Interest
expense,
net (949)
Losses on
foreign
exchange (460)
--------
Pretax
income 21,856
Income tax
expense (5,676)
--------
Income
before
minority
interests $ 16,180
========
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 Nine Months Ended
October 31, October 31,
2002 2001 2002 2001
------------------ ------------------
Operating income:
As reported $ 14,238 $ 9,476 $ 33,596 $ 23,265
Add back
amortization
of goodwill -- 1,507 -- 4,165
--------- -------- -------- --------
Adjusted
operating
income $ 14,238 $ 10,983 $ 33,596 $ 27,430
========= ======== ======== ========
Net income:
As reported $ 9,470 $ 5,931 $ 21,966 $ 15,360
Add back
amortization
of goodwill,
net of tax -- 1,445 -- 3,982
--------- -------- -------- --------
Adjusted net
Income $ 9,470 $ 7,376 $ 21,966 $ 19,342
========= ======== ======== ========
Diluted earnings
per share:
As reported $ 0.37 $ 0.23 $ 0.85 $ 0.60
Add back
amortization
of goodwill,
net of tax -- 0.06 -- 0.16
--------- -------- -------- --------
Adjusted
diluted
earnings per
share $ 0.37 $ 0.29 $ 0.85 $ 0.76
========= ======== ======== ========