RANCHO DOMINGUEZ, Calif., April 2, 2003 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported strong growth in gross and net revenues, operating income and net income for the fiscal fourth quarter ended January 31, 2003.
For the fiscal 2003 fourth quarter, gross revenues increased 54 percent to $338.1 million from $219.8 million in the comparable prior-year period. Net revenues advanced to $132.8 million from $71.8 million in the fourth quarter of fiscal 2002. Standard Corporation, which was acquired effective October 1, 2002, contributed $36.7 million to both gross and net revenues during the three-month period ended January 31, 2003.
With the addition of Standard and Grupo SLi, acquired in late January 2002, UTi's contract logistics net revenues grew nearly ten-fold to $43.4 million in the fiscal 2003 fourth quarter from $4.0 million a year ago. The company also achieved increased net revenues of 33 percent, 18 percent and 34 percent, respectively, for its airfreight, ocean freight and customs brokerage business categories in the fiscal 2003 fourth quarter compared with a year ago.
"Despite the ongoing difficult economic environment, UTi achieved double-digit gains across all geographic regions and revenue categories, increasing net revenues by 85 percent during the fourth quarter of fiscal 2003 compared with last year," said Roger I. MacFarlane, chief executive officer of UTi Worldwide. "In addition to the contribution of Standard, the Americas' results also benefited from increased volumes of air and ocean imports from Asia to the U.S. versus the prior year. Asia Pacific posted a 26 percent increase in net revenues, benefiting from extra airfreight demand driven by the West Coast port labor disputes. In Europe, fourth quarter net revenues increased 65 percent, reflecting both the contribution of Grupo SLi and organic growth. Africa continued to show improvement, posting an increase in net revenues of 38 percent for the quarter, helped, in part, by the strengthening South African rand compared with a year ago."
Operating income grew 86 percent in the fiscal 2003 fourth quarter to $11.9 million from $6.4 million in the corresponding period a year ago. Operating income as a percentage of net revenues increased to 9.0 percent in the fiscal 2003 fourth quarter from 8.9 percent in the corresponding prior-year period. As shown in the attached schedule, excluding the amortization of goodwill and other intangible assets and the impact of the acquisition of Standard, the company's operating profit ratio, which management believes is a key operating indicator for measuring its current performance against its historical performance, increased 110 basis points to 11.7 percent in the fiscal 2003 fourth quarter, compared with the prior-year fourth quarter.
Net income for the fourth quarter of fiscal 2003 increased 93 percent to $7.3 million, or $0.26 per diluted share based on 28.7 million weighted average shares outstanding, compared with prior-year fourth quarter net income of $3.8 million, or $0.15 per diluted share based on 25.5 million shares outstanding. The follow-on offering of 4.6 million UTi ordinary shares in December 2002 resulted in a higher weighted average number of shares outstanding for the fiscal 2003 fourth quarter compared with the same period last year.
"We are particularly pleased with the strong operating profit performances in Africa, Asia Pacific and the Americas," MacFarlane said. "Africa's operating profit was up 35 percent; Asia Pacific posted an increase of 96 percent; and the Americas, benefiting from Standard, advanced more than ten-fold. In Europe, our operating profit was negatively impacted by our roadfreight forwarding business in Sweden and Ireland, which has now been reorganized."
Full Year Review
For the year ended January 31, 2003, gross revenues rose 31 percent to $1.2 billion from $889.8 million last year, while net revenues improved 33 percent to $404.8 million in fiscal 2003 from $304.6 million the prior year.
The company posted a 53 percent increase in operating income to $45.5 million for the year, compared with $29.7 million in fiscal 2002. Operating income as a percentage of net revenues increased to 11.2 percent in fiscal 2003 from 9.7 percent in the corresponding prior-year period. As shown in the attached schedule, excluding the amortization of goodwill and other intangible assets and the impact of the acquisition of Standard, the company's operating profit ratio improved to 12.4 percent, compared with 11.5 percent last year. For fiscal 2003, net income increased 53 percent to $29.3 million, or $1.11 per diluted share, from $19.2 million, or $0.75 per diluted share.
MacFarlane noted: "Fiscal 2003 marked a year of significant achievements in UTi's first year of its NextLeap journey, the company's five-year strategic plan. We delivered solid growth and financial performance in a year filled with economic uncertainties. We made great strides toward reaching our long-term objective of global integrated logistics, with Standard and Grupo SLi strengthening UTi's range of services. We also completed a follow-on offering, which provides us with greater resources and flexibility to execute our growth plans.
"Undoubtedly, the year was impacted by the unusual circumstances in Asia Pacific due to the West Coast port labor dispute, but it also provided an opportunity for UTi to demonstrate the strength of its global network and the soundness of its non-asset based business model," MacFarlane added. "These results are a credit to the dedication and commitment of UTi's employees, now numbering more than 10,000 around the world.
"As we begin the second year of our NextLeap journey, the global business environment continues to grow more uncertain, especially with the armed conflict in Iraq and other geopolitical issues. While UTi's exposure in the Middle East is very small, we are unsure at this time of the full impact on our business from the war. We have recently seen some weakening of volumes in trade demand, particularly in the Asian imports to the U.S. We expect these factors to affect our results in the first part of the current year, particularly our first fiscal quarter, which remains the seasonally weakest of the year. Nevertheless, we are optimistic in our full year outlook for UTi's performance as we continue to seek to build revenues, drive operating improvements, realize a full year contribution from our acquisition of Standard and attract global customers."
Strengthened by UTi's follow-on offering during the year, as of January 31, 2003, the company reported total cash and cash equivalents, net of bank lines of credit and short-term bank borrowings, of $125.5 million, after funding acquisitions and earn-out payments of $62.9 million. The company generated $49.6 million in operating cash flow for fiscal 2003 and $34.5 million in free cash flow, a measurement management believes is useful because it indicates cash available after paying for capital expenditures and dividends as calculated on the attached schedule.
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, April 2, 2003, at 8:00 a.m. PST (11:00 a.m. EST) to review the company's financials and operations for the fourth quarter and year-end periods and to discuss future outlook. 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 6:00 p.m. PDT, Wednesday, April 16, 2003 on both Web sites. A telephonic playback of the conference call also will be available during that same timeframe by calling 800-633-8284 (domestic) or 402-977-9140 (international) and using Reservation No. 21137328.
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 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 Twelve Months Ended
------------------------ ------------------------
January 31, January 31,
------------------------ ------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
(Unaudited)
Gross revenues:
Airfreight
forwarding $ 164,406 $ 123,552 $ 621,905 $ 491,946
Ocean freight
forwarding 74,464 62,554 283,869 255,272
Customs brokerage 17,448 12,981 64,221 55,875
Contract
logistics 49,973 6,083 101,294 23,856
Other 31,771 14,622 98,771 62,837
----------- ----------- ----------- -----------
Total gross
revenues $ 338,062 $ 219,792 $ 1,170,060 $ 889,786
=========== =========== =========== ===========
Net revenues:
Airfreight
forwarding $ 42,450 $ 31,908 $ 157,493 $ 142,312
Ocean freight
forwarding 18,039 15,247 66,554 58,633
Customs brokerage 16,682 12,472 61,105 54,034
Contract
logistics 43,367 3,964 79,517 14,957
Other 12,261 8,182 40,121 34,623
----------- ----------- ----------- -----------
Total net
revenues 132,799 71,773 404,790 304,559
----------- ----------- ----------- -----------
Staff costs 68,927 37,141 204,971 156,005
Depreciation 3,557 2,418 11,174 9,411
Amortization of
goodwill and
other intangible
assets 128 1,174 198 5,339
Other operating
expenses 48,278 24,635 142,942 104,134
----------- ----------- ----------- -----------
Operating income 11,909 6,405 45,505 29,670
Interest expense,
net (60) (261) (486) (1,210)
(Losses)/gains on
foreign exchange (1,016) 477 (1,725) 17
----------- ----------- ----------- -----------
Pretax income 10,833 6,621 43,294 28,477
Income tax
expense (3,307) (2,294) (12,492) (7,970)
----------- ----------- ----------- -----------
Income before
minority
interests 7,526 4,327 30,802 20,507
Minority
interests (198) (529) (1,508) (1,349)
----------- ----------- ----------- -----------
Net income $ 7,328 $ 3,798 $ 29,294 $ 19,158
=========== =========== =========== ===========
Basic earnings
per ordinary
share $ 0.26 $ 0.15 $ 1.13 $ 0.76
Diluted earnings
per ordinary
share $ 0.26 $ 0.15 $ 1.11 $ 0.75
Number of weighted
-average shares
outstanding used
for per share
calculations:
Basic shares 27,740,029 25,244,989 25,932,164 25,233,394
Diluted shares 28,673,009 25,531,846 26,504,401 25,501,864
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
As of January 31,
----------------------
2003 2002
--------- ---------
ASSETS
Cash and cash equivalents $ 168,125 $ 87,594
Trade receivables, net 247,893 180,866
Deferred income tax assets 1,592 1,890
Other current assets 30,492 21,628
--------- ---------
Total current assets 448,102 291,978
Property, plant and equipment, net 44,566 31,185
Goodwill and other intangible
assets, net 125,641 76,611
Investments 847 215
Deferred income tax assets 1,227 1,431
Other non-current assets 6,692 3,191
--------- ---------
Total assets $ 627,075 $ 404,611
========= =========
LIABILITIES & SHAREHOLDERS' EQUITY
Bank lines of credit $ 33,458 $ 21,062
Short-term borrowings 9,121 11,518
Current portion of capital
lease obligations 2,539 1,780
Trade payables and other
accrued liabilities 236,548 173,113
Income taxes payable 8,083 4,743
Deferred income tax liabilities 489 842
--------- ---------
Total current liabilities 290,238 213,058
Long-term bank borrowings 199 1,192
Capital lease obligations 7,111 5,726
Deferred income tax liabilities 1,643 1,566
Retirement fund obligations 1,016 693
Minority interests 2,699 2,522
Commitments and contingencies
Shareholders' equity:
Common stock 311,161 207,143
Retained earnings 63,973 36,608
Accumulated other
comprehensive loss (50,965) (63,897)
--------- ---------
Total shareholders' equity 324,169 179,854
--------- ---------
Total liabilities and
shareholders' equity $ 627,075 $ 404,611
========= =========
UTi Worldwide Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
For the Year Ended
January 31,
----------------------
2003 2002
--------- ---------
OPERATING ACTIVITIES:
Net income $ 29,294 $ 19,158
Adjustments to reconcile net
income to net cash provided by
operating activities:
Stock compensation costs 182 300
Depreciation 11,174 9,411
Amortization of goodwill and
other intangible assets 198 5,339
Deferred income taxes 423 161
Loss/(gain) on disposal of property,
plant and equipment 110 (187)
Other 1,329 1,326
Changes in operating assets and
liabilities:
(Increase)/decrease in trade
receivables and other current
assets (23,564) 23,273
Increase/(decrease) in trade
payables and other accrued
liabilities 30,456 (15,695)
--------- ---------
Net cash provided by operating
activities 49,602 43,086
--------- ---------
INVESTING ACTIVITIES:
Purchases of property, plant and
equipment (13,572) (8,711)
Proceeds from disposal of property,
plant and equipment 430 912
Proceeds from disposal of other
investments 98 63
Acquisition of subsidiaries and
contingent payments (62,944) (21,868)
Purchases of marketable securities (697) (83)
--------- ---------
Net cash used in investing activities (76,685) (29,687)
--------- ---------
FINANCING ACTIVITIES:
Increase/(decrease) in bank lines
of credit 12,396 (14,225)
(Decrease) /increase in short-term
borrowings (3,727) 168
Long-term bank borrowings - advanced -- 116
Long-term bank borrowings - repaid (204) (72)
Capital lease obligations - repaid (3,068) (1,985)
Decrease in minority interests (1,028) (532)
Proceeds from issuance of ordinary shares 100,836 217
Dividends paid (1,929) (1,926)
--------- ---------
Net cash provided by/(used in)
financing activities 103,276 (18,239)
--------- ---------
Net increase/(decrease) in cash
and cash equivalents 76,193 (4,840)
Cash and cash equivalents at beginning
of period 87,594 98,372
Effect of foreign exchange rate changes 4,338 (5,938)
--------- ---------
Cash and cash equivalents at end of period $ 168,125 $ 87,594
========= =========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three Months Ended January 31, 2003
=====================================================
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
======== ======== ======== ======== ======== ========
Gross revenue
from external
customers $100,626 $105,101 $ 90,742 $ 41,593 $ -- $338,062
======== ======== ======== ======== ======== ========
Net revenue $ 26,829 $ 60,692 $ 18,822 $ 26,456 $ -- $132,799
Staff costs 15,796 34,219 7,607 10,470 835 68,927
Depreciation 1,034 925 514 645 439 3,557
Amortization
of intangible
assets -- 128 -- -- -- 128
Other operating
expenses 9,690 21,977 5,426 10,510 675 48,278
-------- -------- -------- -------- -------- --------
Operating
income/
(loss) $ 309 $ 3,443 $ 5,275 $ 4,831 $ (1,949) 11,909
======== ======== ======== ======== ======== ========
Interest
expense,
net (60)
Loss on
foreign
exchange (1,016)
--------
Pretax income 10,833
Income tax
expense (3,307)
--------
Income before
minority
interests $ 7,526
========
Three Months Ended January 31, 2002
=====================================================
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
======== ======== ======== ======== ======== ========
Gross revenue
from external
customers $ 68,942 $ 58,201 $ 64,924 $ 27,725 $ -- $219,792
======== ======== ======== ======== ======== ========
Net revenue $ 16,269 $ 21,438 $ 14,926 $ 19,140 $ -- $ 71,773
Staff costs 9,637 12,702 6,718 7,097 987 37,141
Depreciation 776 560 562 429 91 2,418
Amortization
of goodwill 49 611 461 53 -- 1,174
Other
operating
expenses 3,813 7,270 4,491 7,987 1,074 24,635
-------- -------- -------- -------- -------- --------
Operating
income/(loss) $ 1,994 $ 295 $ 2,694 $ 3,574 $ (2,152) 6,405
======== ======== ======== ======== ======== ========
Interest
expense, net (261)
Gain on foreign
exchange 477
--------
Pretax income 6,621
Income tax
expense (2,294)
--------
Income before
minority
interests $ 4,327
========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Twelve Months Ended January 31, 2003
=======================================================
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
======== ======== ======== ======== ======== ==========
Gross revenue
from external
customers $372,515 $317,314 $337,430 $142,801 $ -- $1,170,060
======== ======== ======== ======== ======== ==========
Net revenue $ 99,571 $143,484 $ 70,626 $ 91,109 $ -- $ 404,790
Staff costs 54,864 81,603 29,237 35,263 4,004 204,971
Depreciation 3,526 2,848 1,962 1,982 856 11,174
Amortization
of intangible
assets -- 198 -- -- -- 198
Other
operating
expenses 30,608 50,382 19,981 37,695 4,276 142,942
-------- -------- -------- -------- -------- ----------
Operating
income/
(loss) $ 10,573 $ 8,453 $ 19,446 $ 16,169 $ (9,136) 45,505
======== ======== ======== ======== ======== ==========
Interest
expense, net (486)
Loss on
foreign
exchange (1,725)
----------
Pretax income 43,294
Income tax
expense (12,492)
----------
Income before
minority
interests $ 30,802
==========
Twelve Months Ended January 31, 2002
=======================================================
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
======== ======== ======== ======== ======== ==========
Gross revenue
from external
customers $264,280 $258,008 $242,950 $124,548 $ -- $ 889,786
======== ======== ======== ======== ======== ==========
Net revenue $ 62,457 $ 94,045 $ 60,075 $ 87,982 $ -- $ 304,559
Staff costs 35,632 56,614 26,238 33,373 4,148 156,005
Depreciation 2,571 2,462 1,775 2,264 339 9,411
Amortization
of goodwill 531 3,096 1,432 280 -- 5,339
Other
operating
expenses 16,262 29,859 18,098 38,860 1,055 104,134
-------- -------- -------- -------- -------- ----------
Operating
income/
(loss) $ 7,461 $ 2,014 $ 12,532 $ 13,205 $ (5,542) 29,670
======== ======== ======== ======== ======== ==========
Interest
expense, net (1,210)
Gain on
foreign
exchange 17
----------
Pretax income 28,477
Income tax
expense (7,970)
----------
Income before
minority
interests $ 20,507
==========
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 Twelve Months Ended
January 31, January 31,
----------------- -----------------
2003 2002 2003 2002
------- ------- ------- -------
Operating income:
As reported $11,909 $ 6,405 $45,505 $29,670
Add back amortization
of goodwill -- 1,174 -- 5,339
------- ------- ------- -------
Adjusted operating
income $11,909 $ 7,579 $45,505 $35,009
======= ======= ======= =======
Net income:
As reported $ 7,328 $ 3,798 $29,294 $19,158
Add back amortization
of goodwill, net of tax -- 1,118 -- 5,100
------- ------- ------- -------
Adjusted net income $ 7,328 $ 4,916 $29,294 $24,258
======= ======= ======= =======
Diluted earnings per share:
As reported $ 0.26 $ 0.15 $ 1.11 $ 0.75
Add back amortization
of goodwill, net of tax -- 0.04 -- 0.20
------- ------- ------- -------
Adjusted diluted earnings
per share $ 0.26 $ 0.19 $ 1.11 $ 0.95
======= ======= ======= =======
UTi Worldwide Inc.
Reconciliation of Non-U.S. GAAP Measures to U.S. GAAP Measures
(in thousands)
Three Months Ended Twelve Months Ended
January 31, January 31,
2003 2002 2003 2002
-------- ------- -------- --------
(Unaudited)
OPERATING PROFIT RATIO
Operating income,
per U.S. GAAP $ 11,909 $ 6,405 $ 45,505 $ 29,670
Less: Operating income
for Standard Corporation,
per U.S. GAAP (760) -- (1,659) --
Add back: Amortization of
goodwill and other
intangible assets, per
U.S. GAAP 128 1,174 198 5,339
-------- ------- -------- --------
Adjusted operating income $ 11,277 $ 7,579 $ 44,044 $ 35,009
======== ======= ======== ========
Divided by:
Net revenue, per U.S. GAAP $132,799 $71,773 $404,790 $304,559
Less: Net revenue for
Standard Corporation,
per U.S. GAAP (36,671) -- (49,399) --
-------- ------- -------- --------
Adjusted net revenue $ 96,128 $71,773 $355,391 $304,559
======== ======= ======== ========
Operating Profit Ratio,
a non- U.S. GAAP measure 11.7% 10.6% 12.4% 11.5%
FREE CASH FLOW
Net cash provided by operating activities,
per U.S. GAAP $ 49,602 $ 43,086
Purchases of property, plant and equipment,
per U.S. GAAP (13,572) (8,711)
Proceeds from disposal of property, plant
and equipment, per U.S. GAAP 430 912
Dividends paid, per U.S. GAAP (1,929) (1,926)
-------- --------
Free Cash Flow, a non- U.S. GAAP measure $ 34,531 $ 33,361
======== ========