RANCHO DOMINGUEZ, Calif., Sept. 8, 2005 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported record levels of quarterly gross and net revenues, operating income, net income and earnings per share for the three months ended July 31, 2005.
Gross revenues increased 27 percent to $686.2 million for the second quarter of fiscal 2006 from $540.4 million in the corresponding prior-year period. Net revenues for the 2006 second fiscal quarter increased 28 percent to $238.3 million from $186.5 million in the fiscal 2005 second quarter. The increases in gross and net revenues were driven principally by strong levels of organic growth across all regions and service lines.
Operating income for the second quarter of fiscal 2006 increased 43 percent to $33.6 million from $23.5 million in the comparable prior-year period. Operating income as a percentage of net revenues continued to show improvement, reaching 14.1 percent in the fiscal 2006 second quarter, compared with 12.6 percent in the prior-year second quarter.
Net income for the fiscal 2006 second quarter grew 38 percent to $22.3 million, or $0.69 per diluted share, compared with $16.2 million, or $0.51 per diluted share, for the prior-year second quarter.
"We continue to see positive market reception to NextLeap's goal of global integrated logistics, particularly as evidenced by the greater than 50 percent growth in our contract logistics net revenue in the current quarter, compared with the second quarter a year ago," said Roger I. MacFarlane, chief executive officer of UTi Worldwide. "In addition, the improvement in operating performance in our freight forwarding services during the 2006 second quarter reflects the benefits of increased network density through our global platform as we handled more shipments for new and existing customers.
"As we move toward the final stages of our NextLeap journey, which began in February 2002, we believe we are on track to complete the transformation of UTi into a company capable of providing a total outsourced solution in global integrated logistics. We have now begun the process of developing our next long-term plan, which will seek to capitalize on the foundation that NextLeap has created in order to deliver even greater competitive advantage and value to each of our customer's supply chain," MacFarlane said.
Airfreight forwarding net revenues grew 18 percent in the fiscal 2006 second quarter over the prior-year second quarter. Ocean freight volumes also grew during the 2006 second quarter, delivering an increase of 17 percent in ocean freight forwarding net revenues during the second quarter of fiscal 2006, compared with the fiscal 2005 second quarter. Contract logistics net revenues improved 53 percent during the fiscal 2006 second quarter, compared with the prior-year period, driven by new customers and the contribution from Canada-based Unigistix, Inc., which UTi acquired in October 2004. As fuel prices and surcharges continue to rise and are passed through to our customers as part of gross revenues, this will constrain improvement in our airfreight and ocean freight yields.
"We are pleased with the global balance of profitability during the quarter across our geographic regions," MacFarlane said. "Each region produced greater than 15 percent organic growth in net revenues and delivered operating income margin improvement in the 2006 second quarter, compared with the prior-year second quarter."
For the six-month period ended July 31, 2005, gross revenues increased 28 percent to $1.3 billion from $1.0 billion for the same period a year ago. Net revenues for the first half of fiscal 2006 rose 29 percent to $459.5 million, up from $356.5 million in the comparable prior-year period. Operating income for the current six-month period totaled $60.6 million, up 43 percent from $42.2 million in the first six months of the comparable prior-year period. Operating income as a percentage of net revenues rose to 13.2 percent in the six-month period ended July 31, 2005, compared with 11.8 percent during the comparable period a year ago. Net income for the six-month period ended July 31, 2005 increased 38 percent to $40.1 million, or $1.23 per diluted share, from $29.0 million, or $0.91 per diluted share, in the corresponding period a year ago.
Investor Conference Call
UTi management will host an investor conference call today, September 8, 2005, at 9:00 a.m. PDT (12:00 noon EDT) to review the company's financials and operations for the fiscal 2006 second quarter ended July 31, 2005. 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.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 5:00 p.m. PDT, Friday, September 9, by calling 888-286-8010 (domestic) or 617-801-6888 (international) and using Reservation No. 69569497.
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 ability to meet customers' needs; its role as a primary logistics partner and outsourced solution for global integrated logistics; its NextLeap initiatives and strategic operating plan, its global platform or network, operating performance and delivery of value to customers; the company's focus on specialized industry solutions, its growth strategy and the contributions 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 a challenging operating environment; increased competition; the effects of increasing fuel prices, 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 Six months ended
July 31, July 31,
------------------------- -------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
(Unaudited)
Gross revenues:
Airfreight
forwarding $ 300,786 $ 243,443 $ 579,066 $ 471,434
Ocean freight
forwarding 201,988 159,702 388,623 296,775
Customs
brokerage 20,136 18,273 40,444 36,854
Contract
logistics 110,172 76,832 204,758 146,160
Other 53,150 42,109 103,534 78,764
------------ ------------ ------------ ------------
Total gross
revenues $ 686,232 $ 540,359 $ 1,316,425 $ 1,029,987
============ ============ ============ ============
Net revenues:
Airfreight
forwarding $ 71,946 $ 61,090 $ 142,475 $ 117,853
Ocean freight
forwarding 29,288 24,977 54,872 46,208
Customs
brokerage 19,439 17,824 39,002 35,737
Contract
logistics 92,842 60,664 171,622 117,005
Other 24,750 21,948 51,492 39,689
------------ ------------ ------------ ------------
Total net
revenues 238,265 186,503 459,463 356,492
Staff costs 125,526 95,332 241,297 187,264
Depreciation
and
amortization 5,619 4,625 11,323 8,525
Amortization of
intangible
assets 982 249 2,124 430
Other operating
expenses 72,490 62,767 144,144 118,058
------------ ------------ ------------ ------------
Operating
income 33,648 23,530 60,575 42,215
Interest
(expense)/
income, net (695) 126 (1,418) 299
Losses on
foreign
exchange (536) (123) (462) (23)
------------ ------------ ------------ ------------
Pretax income 32,417 23,533 58,695 42,491
Provision for
income taxes 9,355 6,877 16,931 12,422
------------ ------------ ------------ ------------
Income before
minority
interests 23,062 16,656 41,764 30,069
Minority
interests (719) (442) (1,652) (1,062)
------------ ------------ ------------ ------------
Net income $ 22,343 $ 16,214 $ 40,112 $ 29,007
============ ============ ============ ============
Basic earnings
per share $ 0.71 $ 0.53 $ 1.29 $ 0.95
Diluted
earnings per
share $ 0.69 $ 0.51 $ 1.23 $ 0.91
Number of
weighted-
average shares
outstanding
used for per
share
calculations:
Basic shares 31,254,963 30,666,608 31,132,762 30,651,537
Diluted
shares 32,591,246 32,097,535 32,561,061 32,040,727
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
July 31, January 31,
2005 2005
----------- -----------
(Unaudited)
ASSETS
Cash and cash equivalents $ 164,770 $ 178,132
Trade receivables, net 477,198 435,223
Deferred income tax assets 13,180 10,027
Other current assets 46,376 44,509
----------- -----------
Total current assets 701,524 667,891
Property, plant and
equipment, net 72,646 71,190
Goodwill and other
intangible assets, net 330,942 293,775
Investments 1,683 587
Deferred income tax assets 1,653 1,104
Other non-current assets 10,547 10,120
----------- -----------
Total assets $ 1,118,995 $ 1,044,667
=========== ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Bank lines of credit $ 87,553 $ 92,340
Short-term borrowings 3,716 3,165
Current portion of capital
lease obligations 4,346 3,465
Trade payables and other
accrued liabilities 420,005 413,003
Income taxes payable 26,241 18,533
Deferred income tax
liabilities 5,721 678
----------- -----------
Total current liabilities 547,582 531,184
Long-term borrowings 18,115 5,105
Capital lease obligations 11,472 9,820
Deferred income tax
liabilities 14,681 19,607
Retirement fund obligations 1,286 1,332
Other long-term liabilities 2,103 136
Minority interests 4,341 3,293
Commitments and
contingencies
Shareholders' equity:
Common stock 351,479 325,905
Retained earnings 205,261 169,821
Accumulated other
comprehensive loss (37,325) (21,536)
----------- -----------
Total shareholders' equity 519,415 474,190
----------- -----------
Total liabilities and
shareholders' equity $ 1,118,995 $ 1,044,667
=========== ===========
UTi Worldwide Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Six months ended
July 31,
----------------------
2005 2004
--------- ---------
(Unaudited)
OPERATING ACTIVITIES:
Net income $ 40,112 $ 29,007
Adjustments to reconcile
net income to net cash
used in operating
activities:
Stock compensation costs 2,073 92
Depreciation and
amortization 11,323 8,525
Amortization of
intangible assets 2,124 430
Deferred income taxes (3,419) (832)
Tax benefit relating to
exercise of stock
options 2,333 203
Gain on disposal of
property, plant and
equipment (95) (206)
Other 1,617 1,062
Changes in operating
assets and liabilities:
Increase in trade
receivables and other
current assets (58,894) (93,477)
Increase in trade
payables and other
current liabilities 38,652 79,473
--------- ---------
Net cash provided by
operating activities 35,826 24,277
INVESTING ACTIVITIES:
Purchases of property,
plant and equipment (9,020) (9,537)
Proceeds from disposal of
property, plant and
equipment 316 1,586
Increase in other
non-current assets (768) (314)
Acquisitions of
subsidiaries and
contingent earn-out
payments (36,006) (30,206)
Other (754) (901)
--------- ---------
Net cash used in
investing activities (46,232) (39,372)
FINANCING ACTIVITIES:
(Decrease)/increase in
bank lines of credit (4,787) 7,315
Decrease in short-term
borrowings (417) (1,057)
Long-term borrowings
-- advanced 13,715 1,521
Long-term borrowings
-- repaid (310) (77)
Repayments of capital
lease obligations (2,324) (1,798)
Decrease in minority
interests (474) (404)
Net proceeds from
issuance of ordinary
shares 6,151 1,906
Dividends paid (4,672) (3,563)
--------- ---------
Net cash provided by
financing activities 6,882 3,843
--------- ---------
Net decrease in cash and
cash equivalents (3,524) (11,252)
Cash and cash equivalents
at beginning of period 178,132 156,687
Effect of foreign
exchange rate changes (9,838) 5,009
--------- ---------
Cash and cash equivalents
at end of period $ 164,770 $ 150,444
========= =========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three months ended July 31, 2005
-----------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
-------- -------- -------- -------- -------- --------
Gross revenue
from external
customers $179,212 $171,172 $207,406 $128,442 $ -- $686,232
======== ======== ======== ======== ======== ========
Net revenue $ 52,280 $ 92,056 $ 34,076 $ 59,853 $ -- $238,265
Staff costs 27,655 55,472 14,138 25,487 2,774 125,526
Depreciation
and
amortization 1,411 1,126 772 1,867 443 5,619
Amortization
of
intangible
assets -- 735 78 169 -- 982
Other
operating
expenses 14,308 25,712 8,152 21,685 2,633 72,490
-------- -------- -------- -------- -------- --------
Operating
income/
(loss) $ 8,906 $ 9,011 $ 10,936 $ 10,645 $ (5,850) 33,648
======== ======== ======== ======== ========
Interest
expense, net (695)
Losses on
foreign
exchange (536)
--------
Pretax income 32,417
Provision for
income taxes 9,355
--------
Income before
minority
interests $ 23,062
========
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
========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Six months ended July 31, 2005
------------------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
--------- --------- --------- --------- --------- ----------
Gross
revenue
from
external
cust-
omers $ 341,195 $ 327,950 $ 389,120 $ 258,160 $ -- $1,316,425
========= ========= ========= ========= ========= ==========
Net
revenue $ 101,908 $ 172,480 $ 62,803 $ 122,272 $ -- $ 459,463
Staff
costs 54,816 102,003 26,599 52,854 5,025 241,297
Depreciation
and
amortiz-
ation 2,826 2,242 1,465 3,852 938 11,323
Amortization
of
intangible
assets -- 1,691 78 355 -- 2,124
Other
operating
expenses 27,770 50,411 15,413 45,736 4,814 144,144
--------- --------- --------- --------- --------- ----------
Operating
income/
(loss) $ 16,496 $ 16,133 $ 19,248 $ 19,475 $ (10,777) 60,575
========= ========= ========= ========= =========
Interest
expense,
net (1,418)
Losses on
foreign
exchange (462)
----------
Pretax
income 58,695
Provision
for
income
taxes 16,931
----------
Income
before
minority
interests $ 41,764
==========
Six months ended July 31, 2004
------------------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
--------- --------- --------- --------- --------- ----------
Gross
revenue
from
external
cust-
omers $ 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
amortiz-
ation 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
==========
UTi Worldwide Inc.
Supplemental Financial Information
(in thousands)
Three months ended Six months ended
July 31, July 31,
--------------------- ---------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
(Unaudited)
FORWARDING, CUSTOMS BROKERAGE AND OTHER:
Gross revenue from
external customers $ 549,616 $ 440,529 $1,057,210 $ 839,790
========== ========== ========== ==========
Net revenue $ 128,049 $ 110,297 $ 252,909 $ 210,141
Staff costs 65,746 54,599 131,315 107,168
Depreciation and
amortization 3,238 2,700 6,498 5,213
Other operating
expenses 33,386 32,567 69,301 60,599
---------- ---------- ---------- ----------
Operating income $ 25,679 $ 20,431 $ 45,795 $ 37,161
========== ========== ========== ==========
CONTRACT LOGISTICS, DISTRIBUTION AND OTHER:
Gross revenue from
external customers $ 136,616 $ 99,830 $ 259,215 $ 190,197
========== ========== ========== ==========
Net revenue $ 110,216 $ 76,206 $ 206,554 $ 146,351
Staff costs 57,006 38,865 104,957 76,536
Depreciation and
amortization 1,938 1,412 3,887 2,438
Amortization of
intangible assets 982 249 2,124 430
Other operating
expenses 36,471 28,005 70,029 53,446
---------- ---------- ---------- ----------
Operating income $ 13,819 $ 7,675 $ 25,557 $ 13,501
========== ========== ========== ==========