RANCHO DOMINGUEZ, Calif., Sept. 7, 2004 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported strong financial results for its three- and six-month periods ended July 31, 2004, posting another record quarter of gross and net revenues and net income.
Gross revenues for the fiscal 2005 second quarter increased 49 percent to $540.4 million from $362.0 million in the prior-year comparable period. Net revenues for the current second quarter rose 29 percent to $186.5 million from $144.9 million in the fiscal 2004 second quarter.
For the second quarter of fiscal 2005, UTi achieved a 27 percent increase in airfreight forwarding net revenues; a 32 percent rise in ocean freight forwarding net revenues; and a 29 percent improvement in contract logistics net revenues, compared with the prior-year second quarter.
"We are pleased with the growth in UTi's global business since the launch of our NextLeap initiative 10 quarters ago," said Roger I. MacFarlane, chief executive officer of UTi Worldwide. "We believe this record underscores the soundness of our five-year strategic plan and the customer-centric focus of UTi's global team."
Operating income increased 56 percent to $23.5 million in the fiscal 2005 second quarter from $15.0 million in the prior-year comparable period. Operating margin, which is operating income expressed as a percentage of net revenues, rose to 12.6 percent in the second quarter for fiscal 2005, compared with 10.4 percent in the fiscal 2004 second quarter.
"Our focus on improved operating margins is evident in the results as each of our geographic regions made solid contributions to the growth in operating income for the second quarter," MacFarlane said.
UTi's operations in Asia Pacific continued to deliver strong performance. The region accounted for the largest contribution to operating income, with operating income in the region increasing 32 percent in the second quarter of fiscal 2005 over the prior-year second quarter on a 22 percent improvement in net revenues. Europe posted a 140 percent increase in operating income in the quarter, compared with the year-earlier second quarter, reflecting particularly strong performances in Spain and Germany. The company attributed the more-than-doubling of operating income in Europe, on a 42 percent increase in net revenues, to improved operating efficiencies resulting from increased volumes through UTi's network of offices. Operating income in the second quarter of fiscal 2005 in the Americas rose 34 percent on a 4 percent increase in net revenues, compared with the fiscal 2004 second quarter. The company attributed the improvement in operating margin in the Americas to increases in freight forwarding in the region during the quarter and to the shedding of lower-margin business in the contract logistics area. Africa, helped in part by the acquisition of International Healthcare Distributors during the second quarter of fiscal 2005, recorded a 46 percent gain in operating income over the prior-year comparable period on a 77 percent increase in net revenues.
Net income for the fiscal 2005 second quarter advanced 42 percent to $16.2 million, or $0.51 per diluted share, from $11.4 million, or $0.36 per diluted share, in the corresponding year-ago period.
"UTi's fiscal 2005 second quarter exemplifies the adaptability of the company's business model as we achieved excellent results, primarily through organic growth, across all business categories and geographic regions, despite a global environment teeming with challenges, both geopolitical and economic," MacFarlane said. "We are particularly pleased with the improvement in operating margins and strong net earnings gains for UTi. As we continue to strengthen our global platform and expand our contract logistics capabilities, we believe we are better positioned than ever to deliver greater value as we become the primary logistics partner to more of our customers."
For the first half of fiscal 2005, gross revenues rose 50 percent to $1.0 billion from $688.8 million for the same prior-year period. Net revenues were up 29 percent for the first half of fiscal 2005, totaling $356.5 million, compared with $276.3 million in the comparable fiscal 2004 period. Operating income for the year-to-date period rose 62 percent to $42.2 million from $26.1 million in the prior-year comparable period. Operating income as a percentage of net revenues improved to 11.8 percent for the current six-month period from 9.5 percent during the prior-year comparable period. Net income for the first half of fiscal 2005 advanced 50 percent to $29.0 million, or $0.91 per diluted share, from $19.4 million, or $0.62 per diluted share, for the first six months of fiscal 2004.
At July 31, 2004, the company reported total cash and cash equivalents, net of outstanding bank lines of credit and short-term bank borrowings, of $123.2 million, compared with $137.2 million at January 31, 2004. This decrease reflects the cash used for the IHD acquisition, which was partially offset by the $24.3 million of cash that the company generated through operating activities in the year-to-date period ended July 31, 2004.
MacFarlane added: "We have enjoyed a healthy first half to the year, reflecting our team's focus on meeting customer needs while not losing sight of our operating margin objectives. We have also benefited from generally improved economic conditions, which we currently expect to continue for the remainder of the year. However, our cautious optimism for prospects in the second half of fiscal 2005 is tempered by several factors that will impinge on costs, including our continued investment in rolling out eMpower5 to our customers worldwide, as well as the escalating fees associated with meeting the testing, compliance and control aspects of Sarbanes-Oxley."
Investor Conference Call
UTi management will host an investor conference call today, Tuesday, September 7, 2004, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company's financials and operations for the fiscal second quarter ended July 31, 2004. The call will be open to all interested parties 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. PDT, Tuesday, September 7, through 5:00 p.m. PDT, Friday, September 10, by calling 888 286 8010 (domestic) or 617-801-6888 (international) and using the playback pass code 91197298.
Changed Postal Address of U.S. Principal Executive Office
The company's postal address of its principal executive office in the U.S. has been changed to 19500 Rancho Way, Suite 116, Rancho Dominguez, California 90220. The address for its registered office in the British Virgin Islands remains unchanged.
About UTi Worldwide
UTi Worldwide Inc. is an international, non-asset based global integrated logistics company providing air and ocean freight forwarding, contract logistics, customs brokerage and other supply chain management 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 deliver competitive advantage to each of its customers' global supply chains.
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 strategies and NextLeap, its global network and expanding capabilities in contract logistics. 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; uncertainties and risks associated with the company's operations in South Africa; 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.
# # #
(TABLES FOLLOW)
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,
----------------------- -----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
(Unaudited)
Gross revenues:
Airfreight
forwarding $ 243,443 $ 167,971 $ 471,434 $ 327,052
Ocean freight
forwarding 159,702 88,589 296,775 162,911
Customs
brokerage 18,273 17,207 36,854 32,241
Contract
logistics 76,832 56,601 146,160 107,908
Other 42,109 31,657 78,764 58,701
---------- ---------- ---------- ----------
Total gross
revenues $ 540,359 $ 362,025 $1,029,987 $ 688,813
========== ========== ========== ==========
Net revenues:
Airfreight
forwarding $ 61,090 $ 48,216 $ 117,853 $ 93,146
Ocean freight
forwarding 24,977 18,931 46,208 34,989
Customs
brokerage 17,824 16,183 35,737 30,448
Contract
logistics 60,664 47,139 117,005 90,517
Other 21,948 14,390 39,689 27,178
---------- ---------- ---------- ----------
Total net
revenues 186,503 144,859 356,492 276,278
---------- ---------- ---------- ----------
Staff costs 95,332 80,134 187,264 150,554
Depreciation
and
amortization 4,625 3,751 8,525 7,219
Amortization
of intangible
assets 249 158 430 306
Other operating
expenses 62,767 45,778 118,058 92,068
---------- ---------- ---------- ----------
Operating
income 23,530 15,038 42,215 26,131
Interest
income, net 126 373 299 509
(Losses)/gains
on foreign
exchange (123) 453 (23) 324
---------- ---------- ---------- ----------
Pretax income 23,533 15,864 42,491 26,964
Provision for
income taxes (6,877) (4,070) (12,422) (6,754)
---------- ---------- ---------- ----------
Income before
minority
interests 16,656 11,794 30,069 20,210
Minority
interests (442) (378) (1,062) (820)
---------- ---------- ---------- ----------
Net income $ 16,214 $ 11,416 $ 29,007 $ 19,390
========== ========== ========== ==========
Basic earnings
per ordinary
share $ 0.53 $ 0.38 $ 0.95 $ 0.64
Diluted
earnings per
ordinary
share $ 0.51 $ 0.36 $ 0.91 $ 0.62
Number of
weighted
-average
shares
outstanding
used for per
share
calculations:
Basic shares 30,666,608 30,232,198 30,651,537 30,194,917
Diluted shares 32,097,535 31,432,216 32,040,727 31,306,056
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
July 31, January 31,
2004 2004
---------- ----------
(Unaudited)
ASSETS
Cash and cash equivalents $ 150,444 $ 156,687
Trade receivables, net 388,017 280,044
Deferred income tax assets 6,288 6,534
Other current assets 35,060 33,420
---------- ----------
Total current assets 579,809 476,685
Property, plant and
equipment, net 62,002 54,421
Goodwill and other
intangible assets, net 200,227 158,567
Investments 1,050 1,117
Deferred income tax assets 2,441 2,384
Other non-current assets 9,357 10,167
---------- ----------
Total assets $ 854,886 $ 703,341
========== ==========
LIABILITIES & SHAREHOLDERS' EQUITY
Bank lines of credit $ 25,495 $ 18,180
Short-term borrowings 1,745 1,312
Current portion of
capital lease obligations 2,428 2,408
Trade payables and other
accrued liabilities 370,275 269,072
Income taxes payable 16,849 10,864
Deferred income
tax liabilities 73 256
---------- ----------
Total current
liabilities 416,865 302,092
Long-term borrowings 1,541 93
Capital lease obligations 9,041 7,326
Deferred income
tax liabilities 8,052 3,860
Retirement fund obligations 1,268 1,251
Minority interests 2,007 2,873
Commitments and
contingencies
Shareholders' equity:
Common stock 320,610 318,409
Retained earnings 131,299 105,855
Accumulated other
comprehensive loss (35,797) (38,418)
---------- ----------
Total shareholders'
equity 416,112 385,846
---------- ----------
Total liabilities
and shareholders' equity $ 854,886 $ 703,341
========== ==========
UTi Worldwide Inc.
Consolidated Statements of Cash Flows
(in thousands)
Six months ended
----------------------------
July 31,
----------------------------
2004 2003
---------- ----------
(Unaudited)
OPERATING ACTIVITIES:
Net income $ 29,007 $ 19,390
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Stock compensation costs 92 87
Depreciation and amortization 8,525 7,219
Amortization of
intangible assets 430 306
Deferred income taxes (832) 1,490
Tax benefit relating
to exercise of stock
options 203 --
Gain on disposal of property,
plant and equipment (206) (47)
Other 1,062 820
Changes in operating
assets and liabilities:
Increase in trade
receivables and
other current assets (93,477) (20,776)
Increase in trade payables
and other current
liabilities 79,473 5,341
---------- ----------
Net cash provided by
operating activities 24,277 13,830
---------- ----------
INVESTING ACTIVITIES:
Purchases of property,
plant and equipment (9,537) (9,018)
Proceeds from disposal
of property, plant
and equipment 1,586 312
Increase in other
non-current assets (314) (1,077)
Acquisitions of
subsidiaries and
contingent earn-out
payments (30,206) (8,044)
Other (901) (170)
---------- ----------
Net cash used in
investing activities (39,372) (17,997)
---------- ----------
FINANCING ACTIVITIES:
Increase/decrease in
bank lines of credit 7,315 (1,653)
Decrease in short-term
borrowings (1,057) (6,346)
Long-term borrowings
-- advanced 1,521 --
Long-term borrowings
-- repaid (77) (116)
Repayments of capital
lease obligations (1,798) (1,739)
Decrease in minority
interests (404) (327)
Net proceeds from issuance
of ordinary shares 1,906 1,567
Dividends paid (3,563) (2,890)
---------- ----------
Net cash provided by/used
in financing activities 3,843 (11,504)
---------- ----------
Net decrease in cash
and cash equivalents (11,252) (15,671)
Cash and cash equivalents
at beginning of period 156,687 168,125
Effect of foreign exchange
rate changes 5,009 (2,880)
---------- ----------
Cash and cash equivalents
at end of period $ 150,444 $ 149,574
========== ==========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three months ended July 31, 2004
------------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
-------- -------- -------- -------- -------- --------
Gross revenue
from external
customers $150,391 $134,100 $154,558 $101,310 $ -- $540,359
======== ======== ======== ======== ======== ========
Net revenue $ 44,816 $ 67,972 $ 25,825 $ 47,890 $ -- $186,503
Staff costs 22,739 39,227 10,558 20,940 1,868 95,332
Depreciation
and
amortization 1,258 871 585 1,398 513 4,625
Amortization
of
intangible
assets -- 135 -- 114 -- 249
Other operating
expenses 13,299 22,356 6,407 18,510 2,195 62,767
-------- -------- -------- -------- -------- --------
Operating
income/(loss) $ 7,520 $ 5,383 $ 8,275 $ 6,928 $ (4,576) 23,530
======== ======== ======== ======== ========
Interest
income, net 126
Losses on
foreign
exchange (123)
--------
Pretax income 23,533
Provision for
income taxes (6,877)
--------
Income before
minority
interests $ 16,656
========
Three months ended July 31, 2003
-----------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
-------- -------- -------- -------- -------- --------
Gross revenue
from external
customers $104,435 $114,281 $ 96,169 $ 47,140 $ -- $362,025
======== ======== ======== ======== ======== ========
Net revenue $ 31,513 $ 65,147 $ 21,147 $ 27,052 $ -- $144,859
Staff costs 18,132 38,518 8,897 13,198 1,389 80,134
Depreciation
and
amortization 1,074 1,022 550 742 363 3,751
Amortization of
intangible
assets -- 149 -- 9 -- 158
Other operating
expenses 9,174 21,432 5,412 8,357 1,403 45,778
-------- -------- -------- -------- -------- --------
Operating
income/(loss) $ 3,133 $ 4,026 $ 6,288 $ 4,746 $ (3,155) 15,038
======== ======== ======== ======== ========
Interest
income, net 373
Gains on
foreign
exchange 453
--------
Pretax income 15,864
Provision for
income taxes (4,070)
--------
Income before
minority
interests $ 11,794
========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Six months ended July 31, 2004
---------------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
-------- -------- -------- -------- -------- --------
Gross
revenue
from
external
customers $ 285,085 $ 261,771 $ 299,286 $ 183,845 $ -- $1,029,987
======== ======== ======== ======== ======== =========
Net
revenue $ 84,513 $ 136,675 $ 49,342 $ 85,962 $ -- $ 356,492
Staff costs 44,583 80,619 20,704 37,798 3,560 187,264
Depreciation
and
amortization 2,428 1,677 1,175 2,371 874 8,525
Amortization
of
intangible
assets -- 283 -- 147 -- 430
Other
operating
expenses 24,010 43,852 12,633 33,550 4,013 118,058
-------- -------- -------- -------- -------- ---------
Operating
income/
(loss) $ 13,492 $ 10,244 $ 14,830 $ 12,096 $ (8,447) 42,215
======== ======== ======== ======== ========
Interest
income, net 299
Losses on
foreign
exchange (23)
---------
Pretax income 42,491
Provision for
income taxes (12,422)
---------
Income before
minority
interests $ 30,069
=========
Six months ended July 31, 2003
-----------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
-------- -------- -------- -------- -------- --------
Gross revenue
from external
customers $203,368 $217,395 $180,002 $ 88,048 $ -- $688,813
======== ======== ======== ======== ======== ========
Net revenue $ 58,997 $122,446 $ 40,258 $ 54,577 $ -- $276,278
Staff costs 34,383 71,688 17,060 24,788 2,635 150,554
Depreciation
and
amortization 2,115 2,002 1,062 1,404 636 7,219
Amortization
of intangible
assets -- 297 -- 9 -- 306
Other
operating
expenses 17,691 41,026 10,319 20,561 2,471 92,068
-------- -------- -------- -------- -------- --------
Operating
income/(loss) $ 4,808 $ 7,433 $ 11,817 $ 7,815 $ (5,742) 26,131
======== ======== ======== ======== ========
Interest
income, net 509
Gains on
foreign
exchange 324
--------
Pretax income 26,964
Provision for
income taxes (6,754)
--------
Income before
minority
interests $ 20,210
========
UTi Worldwide Inc.
Supplemental Financial Information
(in thousands)
Three months ended Six months ended
July 31, July 31,
------------------- -------------------
2004 2003 2004 2003
-------- -------- -------- --------
(Unaudited)
Forwarding, Customs
Brokerage & Other:
Gross revenue from
external customers $440,529 $287,177 $839,790 $546,223
======== ======== ======== ========
Net revenue $110,297 $ 86,374 $210,141 $165,241
Staff costs 54,599 45,940 107,168 88,409
Depreciation and
amortization 2,700 2,446 5,213 4,757
Other operating
expenses 32,567 22,574 60,599 45,970
-------- -------- -------- --------
Operating income $ 20,431 $ 15,414 $ 37,161 $ 26,105
======== ======== ======== ========
Contract Logistics,
Distribution &
Other:
Gross revenue from
external customers $ 99,830 $ 74,848 $190,197 $142,590
======== ======== ======== ========
Net revenue $ 76,206 $ 58,485 $146,351 $111,037
Staff costs 38,865 32,805 76,536 59,510
Depreciation and
amortization 1,412 942 2,438 1,826
Amortization of
intangible assets 249 158 430 306
Other operating
expenses 28,005 21,801 53,446 43,627
-------- -------- -------- --------
Operating income $ 7,675 $ 2,779 $ 13,501 $ 5,768
======== ======== ======== ========