RANCHO DOMINGUEZ, Calif., Dec. 10, 2003 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported, for the seventh consecutive quarter, increases in revenues and income for the three-month period ended October 31, 2003, compared with year-earlier results.
Gross revenues for the fiscal 2004 third quarter rose 24 percent to $398.7 million from $321.5 million in the corresponding prior-year period. Net revenues grew 46 percent to $156.5 million from $107.5 million in the third fiscal quarter a year ago. Standard Corporation, which was acquired effective October 1, 2002, contributed $39.0 million to both gross and net revenues during the full three months of the current third quarter. This compares with a revenue contribution from Standard of $12.7 million in the last month of the fiscal 2003 third quarter.
"These results represent another solid quarter of net revenue gains over the prior year," said Roger I. MacFarlane, chief executive officer of UTi Worldwide. "We are particularly pleased with UTi's airfreight forwarding operations, which recorded a 23 percent increase in third quarter net revenues from a year earlier. This increase was realized even with last year's unusually high airfreight volumes in response to the West Coast port lock-out. In addition, we achieved an improvement in airfreight yields to 27 percent during the current quarter, compared with 24 percent in the fiscal 2003 third quarter."
Ocean freight net revenues advanced 12 percent over last year's third quarter and net revenues for customs brokerage grew 5 percent compared with a year ago. The acquisition of Standard in October 2002 continues to bolster contract logistics net revenues, which totaled $50.7 million, compared with $20.6 million in the fiscal 2003 third quarter.
UTi's global network also achieved gross and net revenue gains over the prior-year period across all geographic regions. The Americas, with a full three months contribution from Standard, recorded a 77 percent increase in net revenues from the year-ago third quarter, which included one month's contribution from Standard. Asia Pacific net revenues grew 20 percent. Africa and Europe posted third quarter net revenue increases of 43 percent and 23 percent, respectively. Both benefited by the weaker U.S. dollar, compared with last year's exchange rates.
Operating income in the fiscal 2004 third quarter increased 26 percent to $18.0 million from $14.2 million in the fiscal 2003 third quarter. Operating margin, which is operating income as a percentage of net revenues, equaled 11.5 percent in the current third quarter, compared with 13.2 percent in the fiscal 2003 third quarter. Operating margins in the current third quarter were reduced by the inclusion of Standard for the full quarter, which traditionally operates at a lower operating margin, compared with other UTi operations. Excluding the operating income of Standard, the company's operating profit ratio remained level at 14.1 percent for both the fiscal 2003 and 2004 third quarters. Management believes this measurement 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 measurement to UTi's operating income as presented under U.S. GAAP.
Net income for the fiscal 2004 third quarter advanced 39 percent to $13.2 million, or $0.42 per diluted share, based on 31.5 million weighted average shares outstanding. This compares with last year's third quarter net income of $9.5 million, or $0.37 per diluted share, based on 25.8 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 third quarter, compared with the corresponding prior-year period.
"The year-over-year increases in revenues, operating income and net income for UTi throughout the first seven of 20 quarters in our NextLeap strategy underscore the soundness of our vision and resolve and the dedication of UTi's employees worldwide," MacFarlane said. "We continue to focus on investing in the skills and talent of our global sales and customer management organization, and on revenue growth, operating margins and cash flow. We believe these efforts will better position us to gain additional market share and become the primary logistics partner with more of our strategic customers."
For the nine-month period ended October 31, 2003, gross revenues advanced 31 percent to $1.1 billion from $832.0 million for the same period a year ago. Net revenues rose 59 percent to $432.8 million from $272.0 million in the comparable prior-year period. Standard contributed $114.2 million to both gross and net revenues during the nine-month period ended October 31, 2003, compared with $12.7 million in the corresponding period last year. Operating income for the year-to-date period totaled $44.1 million, a 31 percent increase over $33.6 million in the first nine months of fiscal 2003. Operating margin (operating income as a percentage of net revenues) equaled 10.2 percent in the current nine-month period, compared with 12.4 percent a year ago, again reflecting the impact of a full nine-months contribution from Standard. Net income for the fiscal 2004 nine-month period increased 48 percent to $32.6 million, or $1.04 per diluted share, based on 31.4 million weighted average shares outstanding. This com
pares with net income in the corresponding period a year ago of $22.0 million, or $0.85 per diluted share, based on 25.8 million weighted average shares outstanding.
At October 31, 2003, the company reported total cash and cash equivalents, net of outstanding bank lines of credit and short-term bank borrowings, of $129 million, compared with $126 million at January 31, 2003.
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, December 10, 2003, at 8:00 a.m. PST (11:00 a.m. EST) to review the company's financials and operations for the third quarter ended October 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.fulldisclosure.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. PST, Wednesday, December 10, through 5:00 p.m. PST, Friday, December 12, by calling 800-633-8284 (domestic) or 402-977-9140 (international) and using Reservation No. 21166839.
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 Nine Months Ended ----------------------- ----------------------- October 31, October 31, ----------------------- ----------------------- 2003 2002 2003 2002 ---------- ---------- ---------- ----------- (Unaudited) (Unaudited) Gross revenues: Airfreight forwarding $ 195,149 $ 174,389 $ 522,201 $ 457,499 Ocean freight forwarding 93,319 76,082 256,230 209,405 Customs brokerage 17,189 17,275 49,430 46,773 Contract logistics 61,447 25,850 169,355 51,321 Other 31,622 27,925 90,323 67,000 ---------- ---------- ---------- ---------- Total gross revenues $ 398,726 $ 321,521 $1,087,539 $ 831,998 ========== ========== ========== ========== Net revenues: Airfreight forwarding $ 52,230 $ 42,431 $ 145,376 $ 115,043 Ocean freight forwarding 19,114 17,079 54,103 48,515 Customs brokerage 17,370 16,476 47,818 44,423 Contract logistics 50,668 20,612 141,185 36,150 Other 17,163 10,931 44,341 27,860 ---------- ---------- ---------- ---------- Total net revenues 156,545 107,529 432,823 271,991 ---------- ---------- ---------- ---------- Staff costs 81,206 52,436 231,760 136,044 Depreciation and amortization 3,531 2,790 10,750 7,617 Amortization of intangible assets 178 70 484 70 Other operating expenses 53,657 37,995 145,725 94,664 ---------- ---------- ---------- ---------- Operating income 17,973 14,238 44,104 33,596 Interest income/ (expense), net 458 (46) 967 (426) Losses on foreign exchange (336) (394) (12) (709) ---------- ---------- ---------- ---------- Pretax income 18,095 13,798 45,059 32,461 Provision for income taxes (4,419) (3,891) (11,173) (9,185) ---------- ---------- ---------- ---------- Income before minority interests 13,676 9,907 33,886 23,276 Minority interests (498) (437) (1,318) (1,310) ---------- ---------- ---------- ---------- Net income $ 13,178 $ 9,470 $ 32,568 $ 21,966 ========== ========== ========== ========== Basic earnings per ordinary share $ 0.43 $ 0.37 $ 1.08 $ 0.87 Diluted earnings per ordinary share $ 0.42 $ 0.37 $ 1.04 $ 0.85 Number of weighted-average shares outstanding used for per share calculations Basic shares 30,301,508 25,346,730 30,236,777 25,315,265 Diluted shares 31,539,692 25,822,416 31,392,561 25,797,360 UTi Worldwide Inc. Condensed Consolidated Balance Sheets (in thousands) October 31, January 31, 2003 2003 ----------- ----------- (Unaudited) ASSETS Cash and cash equivalents (including restricted cash of $4,000) $ 165,890 $ 168,125 Trade receivables, net 302,024 247,893 Deferred income tax assets 4,164 1,592 Other current assets 36,144 30,492 --------- --------- Total current assets 508,222 448,102 Property, plant and equipment, net 52,814 44,566 Goodwill and other intangible assets, net 141,591 125,641 Investments 1,128 847 Deferred income tax assets 2,221 1,227 Other non-current assets 9,571 6,692 --------- --------- Total assets $ 715,547 $ 627,075 ========= ========= LIABILITIES & SHAREHOLDERS' EQUITY Bank lines of credit $ 34,351 $ 33,458 Short-term borrowings 2,471 9,121 Current portion of capital lease obligations 2,109 2,539 Trade payables and other accrued liabilities 281,433 236,548 Income taxes payable 11,778 8,083 Deferred income tax liabilities 383 489 --------- --------- Total current liabilities 332,525 290,238 Long-term bank borrowings 96 199 Capital lease obligations 7,668 7,111 Deferred income tax liabilities 2,100 1,643 Retirement fund obligations 1,219 1,016 Minority interests 3,752 2,699 Commitments and contingencies Shareholders' equity: Common stock 313,814 311,161 Retained earnings 93,651 63,973 Accumulated other comprehensive loss (39,278) (50,965) --------- --------- Total shareholders' equity 368,187 324,169 --------- --------- Total liabilities and shareholders' equity $ 715,547 $ 627,075 ========= ========= UTi Worldwide Inc. Condensed Consolidated Statements of Cash Flows (in thousands) Nine Months Ended October 31, ------------------------ 2003 2002 ----------- ---------- (Unaudited) OPERATING ACTIVITIES: Net income $ 32,568 $ 21,966 Adjustments to reconcile net income to net cash provided by operating activities: Stock compensation costs 130 137 Depreciation and amortization 10,750 7,617 Amortization of intangible assets 484 70 Deferred income taxes 1,009 (291) Gain on disposal of property, plant and equipment 194 129 Other 1,318 1,349 Changes in operating assets and liabilities: Increase in trade receivables and other current assets (40,113) (41,014) Increase in trade payables and other accrued liabilities 30,271 35,703 --------- --------- Net cash provided by operating activities 36,611 25,666 --------- --------- INVESTING ACTIVITIES: Purchases of property, plant and equipment (13,759) (7,113) Proceeds from disposal of property, plant and equipment 584 365 Increase in other non-current assets (794) -- Acquisition of subsidiaries and contingent earn-out payments (14,269) (54,756) Other (444) (442) --------- --------- Net cash used in investing activities (28,682) (61,946) --------- --------- FINANCING ACTIVITIES: Increase in bank lines of credit 893 24,894 Decrease in short-term borrowings (6,368) (991) Long-term bank borrowings - repaid (130) (1,109) Capital lease obligations - repaid (2,608) (2,515) Decrease in minority interests (338) (935) Proceeds from issuance of ordinary shares 2,523 555 Dividends paid (2,890) (1,929) --------- --------- Net cash (used in)/provided by financing activities (8,918) 17,970 --------- --------- Net decrease in cash and cash equivalents (989) (18,310) Cash and cash equivalents at beginning of period 168,125 87,594 Effect of foreign exchange rate changes (1,246) 81 --------- --------- Cash and cash equivalents at end of period $ 165,890 $ 69,365 ========= ========= UTi Worldwide Inc. Segment Reporting (in thousands) Three Months Ended October 31, 2003 (Unaudited) ------------------------------------------------------- Asia Europe Americas Pacific Africa Corporate Total --------- -------- -------- -------- --------- -------- Gross revenue from external customers $ 104,961 $ 119,629 $118,309 $ 55,827 $ -- $398,726 ========= ========= ======== ======== ======== ======== Net revenue $ 31,882 $ 66,221 $ 23,543 $ 34,899 $ -- $156,545 Staff costs 18,367 37,343 9,547 14,871 1,078 81,206 Depreciation and amortization 1,085 990 476 787 193 3,531 Amortization of intangible assets -- 149 -- 29 -- 178 Other operating expenses 9,346 22,807 5,693 14,260 1,551 53,657 --------- --------- -------- ------- -------- -------- Operating income/ (loss) $ 3,084 $ 4,932 $ 7,827 $ 4,952 $ (2,822) 17,973 ========= ======== ======== ======== ========= Interest income, net 458 Losses on foreign exchange (336) -------- Pretax income 18,095 Provision for income taxes (4,419) -------- Income before minority interests $ 13,676 ======== Three Months Ended October 31, 2002 (Unaudited) ------------------------------------------------------ Asia Europe Americas Pacific Africa Corporate Total -------- -------- -------- -------- --------- -------- 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 and amortization 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 Provision for income taxes (3,891) -------- Income before minority interests $ 9,907 ======== UTi Worldwide Inc. Segment Reporting (in thousands) Nine Months Ended October 31, 2003 (Unaudited) ------------------------------------------------------- Asia Europe Americas Pacific Africa Corporate Total --------- -------- -------- -------- --------- -------- Gross revenue from external customers $308,329 $337,024 $298,311 $143,875 $ -- $1,087,539 ======== ======== ======== ======== ======== ========== Net revenue $ 90,879 $188,667 $ 63,801 $ 89,476 $ -- $ 432,823 Staff costs 52,750 109,031 26,607 39,659 3,713 231,760 Depreciation and amortization 3,200 2,992 1,538 2,191 829 10,750 Amortization of intangible assets -- 446 -- 38 -- 484 Other operating expenses 27,037 63,833 16,012 34,821 4,022 145,725 -------- -------- -------- -------- --------- --------- Operating income/ (loss) $ 7,892 $ 12,365 $ 19,644 $ 12,767 $ (8,564) 44,104 ======== ======== ======== ======== ========= Interest income, net 967 Losses on foreign exchange (12) ---------- Pretax income 45,059 Provision for income taxes (11,173) ---------- Income before minority interests $ 33,886 ========== Nine Months Ended October 31, 2002 (Unaudited) ------------------------------------------------------ Asia Europe Americas Pacific Africa Corporate Total -------- -------- -------- -------- --------- -------- Gross revenues from external customers $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 and amortization 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 Provision for income taxes (9,185) -------- Income before minority interests $ 23,276 ======== UTi Worldwide Inc. Reconciliation of Non-U.S. GAAP Measure to U.S. GAAP Measure (in thousands) Three Months Ended Nine Months Ended ------------------- ------------------ October 31, October 31, ------------------- ------------------ 2003 2002 2003 2002 --------- --------- --------- -------- (Unaudited) (Unaudited) OPERATING PROFIT RATIO Operating income, per U.S. GAAP $ 17,973 $ 14,238 $ 44,104 $ 33,596 Less: Operating income for Standard Corporation, per U.S. GAAP 1,445 828 4,489 828 -------- -------- -------- -------- Adjusted operating income $ 16,528 $ 13,410 $ 39,615 $ 32,768 ======== ======== ======== ======== Divided by: Net revenue, per U.S. GAAP $156,545 $107,529 $432,823 $271,991 Less: Net revenue for Standard Corporation, per U.S. GAAP 38,987 12,728 114,188 12,728 -------- -------- -------- -------- Adjusted net revenue $117,558 $ 94,801 $318,635 $259,263 ======== ======== ======== ======== Operating Profit Ratio, a non- U.S. GAAP measure 14.1% 14.1% 12.4% 12.6% ======== ======== ======== ========