RANCHO DOMINGUEZ, Calif., Dec. 6, 2005 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported for the three months ended October 31, 2005 another quarter of record levels of gross and net revenues, operating income, net income and earnings per share.
Gross revenues for the third quarter of fiscal 2006 rose 23 percent to $740.9 million from $602.5 million in the corresponding prior-year period. Net revenues advanced 25 percent to $253.2 million in the fiscal 2006 third quarter from $202.0 million in the fiscal 2005 third 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 fiscal third quarter grew 51 percent to $40.3 million from $26.7 million in the fiscal 2005 third quarter. The company achieved another quarter of improvement in operating income as a percentage of net revenues, increasing to 15.9 percent in the fiscal 2006 third quarter from 13.2 percent in the corresponding prior-year period.
Net income for the fiscal 2006 third quarter increased 31 percent to $26.1 million, or $0.80 per diluted share, compared with $19.9 million, or $0.62 per diluted share, for the prior-year third quarter.
"These results underscore the outstanding achievements of UTi's employees worldwide," said Roger I. MacFarlane, chief executive officer of UTi Worldwide. "Our teams delivered another consecutive quarter of strong performance in each of UTi's geographic regions, produced primarily from organic growth.
"We believe we are continuing to benefit from the pursuit of our NextLeap goal of providing customized solutions for our clients in global integrated logistics, with year-over-year growth achieved in all of our service categories," MacFarlane said. "Airfreight and ocean freight forwarding net revenues grew 11 percent and 23 percent, respectively, in the fiscal 2006 third quarter, compared with the prior-year third quarter. However, high fuel surcharges, which are reflected in our gross revenues, once again restrained our airfreight and ocean freight yields. Contract logistics net revenue continued to gain momentum, primarily from organic growth plus the contributions from the company's acquisitions in this service line, and was up 51 percent during the fiscal 2006 third quarter compared with the prior-year period."
For the nine-month period ended October 31, 2005, gross revenues grew 26 percent to $2.1 billion from $1.6 billion for the same period a year ago. Net revenues for the fiscal 2006 year-to-date period totaled $712.7 million, up 28 percent from $558.5 million in the comparable prior-year period. Operating income for the nine-month period ended October 31, 2005 rose 46 percent to $100.8 million from $69.0 million in the first nine months of the comparable prior-year period. Operating income as a percentage of net revenues increased to 14.2 percent in the nine-month period ended October 31, 2005 from 12.3 percent during the comparable period a year ago. Net income for the fiscal year-to-date period totaled $66.2 million, or $2.03 per diluted share, up 35 percent from $48.9 million, or $1.52 per diluted share, in the corresponding period a year ago.
"We enter our fiscal fourth quarter, which includes the seasonally slow freight months of December and January, excited about the investments we are making for UTi's future," MacFarlane said. "Recently we have been taking advantage of the current industry consolidation to recruit seasoned managers with strong customer relationships. Although we don't anticipate realizing a benefit to revenues until our next fiscal year, the impact of these higher staff costs will be seen in the fourth quarter. We are also benefiting from the company's 2004 initiative to qualify our South African operations as Black Empowered, which has resulted in higher than anticipated increases in our minority interest expense, as evidenced in our fiscal 2006 third quarter results."
Investor Conference Call
UTi management will host an investor conference call today, December 6, 2005, at 8:00 a.m. PST (11:00 a.m. EST) to review the company's financials and operations for the fiscal 2006 third quarter ended October 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 10:00 a.m. PST, today, through 5:00 p.m. PST, Friday, December 9, by calling 888-286-8010 (domestic) or 617-801-6888 (international) and using Reservation No. 74415989.
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 Nine months ended October 31, October 31, -------------------------- -------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ (Unaudited) Gross revenues: Airfreight forwarding $ 322,734 $ 271,445 $ 901,800 $ 742,879 Ocean freight forwarding 220,436 183,501 609,059 480,276 Customs brokerage 20,746 20,479 61,190 57,333 Contract logistics 120,531 83,432 325,289 229,592 Other 56,499 43,646 160,033 122,410 ------------ ------------ ------------ ------------ Total gross revenues $ 740,946 $ 602,503 $ 2,057,371 $ 1,632,490 ============ ============ ============ ============ Net revenues: Airfreight forwarding $ 74,509 $ 67,093 $ 216,984 $ 184,946 Ocean freight forwarding 31,068 25,317 85,940 71,525 Customs brokerage 20,163 19,821 59,165 55,558 Contract logistics 101,037 67,082 272,659 184,087 Other 26,450 22,706 77,942 62,395 ------------ ------------ ------------ ------------ Total net revenues 253,227 202,019 712,690 558,511 Staff costs 134,271 102,236 375,568 289,500 Depreciation and amortization 5,974 4,950 17,297 13,475 Amortization of intangible assets 1,238 435 3,362 865 Other operating expenses 71,471 67,655 215,615 185,713 ------------ ------------ ------------ ------------ Operating income 40,273 26,743 100,848 68,958 Interest (expense)/ income, net (1,580) 328 (2,998) 627 Gains/(losses) on foreign exchange 246 (3) (216) (26) ------------ ------------ ------------ ------------ Pretax income 38,939 27,068 97,634 69,559 Provision for income taxes 11,259 6,548 28,190 18,970 ------------ ------------ ------------ ------------ Income before minority interests 27,680 20,520 69,444 50,589 Minority interests (1,626) (610) (3,278) (1,672) ------------ ------------ ------------ ------------ Net income $ 26,054 $ 19,910 $ 66,166 $ 48,917 ============ ============ ============ ============ Basic earnings per share $ 0.83 $ 0.65 $ 2.11 $ 1.59 Diluted earnings per share $ 0.80 $ 0.62 $ 2.03 $ 1.52 Number of weighted- average shares outstanding used for per share calculations: Basic shares 31,565,715 30,760,187 31,286,846 30,688,019 Diluted shares 32,718,526 32,322,468 32,595,009 32,137,143 UTi Worldwide Inc. Condensed Consolidated Balance Sheets (in thousands) October 31, January 31, 2005 2005 ----------- ----------- (Unaudited) ASSETS Cash and cash equivalents $ 146,429 $ 178,132 Trade receivables, net 519,356 435,223 Deferred income tax assets 13,777 10,027 Other current assets 46,910 44,509 ----------- ----------- Total current assets 726,472 667,891 Property, plant and equipment, net 72,697 71,190 Goodwill and other intangible assets, net 337,989 293,775 Investments 1,491 587 Deferred income tax assets 4,623 1,104 Other non-current assets 10,828 10,120 ----------- ----------- Total assets $ 1,154,100 $ 1,044,667 =========== =========== LIABILITIES & SHAREHOLDERS' EQUITY Bank lines of credit $ 92,902 $ 92,340 Short-term borrowings 3,446 3,165 Current portion of capital lease obligations 4,799 3,465 Trade payables and other accrued liabilities 417,305 413,003 Income taxes payable 26,663 18,533 Deferred income tax liabilities 2,119 678 ----------- ----------- Total current liabilities 547,234 531,184 Long-term borrowings 16,551 5,105 Capital lease obligations 13,060 9,820 Deferred income tax liabilities 17,223 19,607 Retirement fund obligations 1,291 1,332 Other long-term liabilities 3,093 136 Minority interests 5,886 3,293 Commitments and contingencies Shareholders' equity: Common stock 356,996 325,905 Retained earnings 231,315 169,821 Accumulated other comprehensive loss (38,549) (21,536) ----------- ----------- Total shareholders' equity 549,762 474,190 ----------- ----------- Total liabilities and shareholders' equity $ 1,154,100 $ 1,044,667 =========== =========== UTi Worldwide Inc. Condensed Consolidated Statements of Cash Flows (in thousands) Nine months ended October 31, ---------------------- 2005 2004 --------- --------- (Unaudited) OPERATING ACTIVITIES: Net income $ 66,166 $ 48,917 Adjustments to reconcile net income to net cash used in operating activities: Stock compensation costs 3,453 300 Depreciation and amortization 17,297 13,475 Amortization of intangible assets 3,362 865 Deferred income taxes (5,433) 1,398 Tax benefit relating to exercise of stock options 3,711 1,101 Gain on disposal of property, plant and equipment (1,183) (228) Other 3,168 1,672 Changes in operating assets and liabilities: Increase in trade receivables and other current assets (99,253) (139,031) Increase in trade payables and other current liabilities 35,288 86,852 --------- --------- Net cash provided by operating activities 26,576 15,321 INVESTING ACTIVITIES: Purchases of property, plant and equipment (13,005) (15,110) Proceeds from disposal of property, plant and equipment 2,916 2,276 Increase in other non-current assets (1,739) (1,020) Acquisitions of subsidiaries and contingent earn-out payments (46,194) (118,476) Other (569) (680) --------- --------- Net cash used in investing activities (58,591) (133,010) FINANCING ACTIVITIES: Increase in bank lines of credit 562 77,822 Decrease in short-term borrowings (808) (1,068) Long-term borrowings -- advanced 13,061 1,642 Long-term borrowings -- repaid (814) (192) Repayments of capital lease obligations (3,749) (2,952) Decrease in minority interests (461) (410) Net proceeds from issuance of ordinary shares 8,910 3,708 Dividends paid (4,672) (3,563) --------- --------- Net cash provided by financing activities 12,029 74,987 --------- --------- Net decrease in cash and cash equivalents (19,986) (42,702) Cash and cash equivalents at beginning of period 178,132 156,687 Effect of foreign exchange rate changes (11,717) 10,355 --------- --------- Cash and cash equivalents at end of period $ 146,429 $ 124,340 ========= ========= UTi Worldwide Inc. Segment Reporting (in thousands) Three months ended October 31, 2005 ----------------------------------------------------- (Unaudited) Asia Europe Americas Pacific Africa Corporate Total -------- -------- -------- -------- -------- -------- Gross revenue from external customers $171,446 $186,733 $240,721 $142,046 $ -- $740,946 ======== ======== ======== ======== ======== ======== Net revenue $ 51,403 $100,060 $ 37,660 $ 64,104 $ -- $253,227 Staff costs 28,173 59,818 15,482 27,402 3,396 134,271 Depreciation and amortization 1,424 1,294 849 2,024 383 5,974 Amortization of intangible assets -- 952 114 172 -- 1,238 Other operating expenses 12,924 27,689 8,636 20,504 1,718 71,471 -------- -------- -------- -------- -------- -------- Operating income/ (loss) $ 8,882 $ 10,307 $ 12,579 $ 14,002 $ (5,497) 40,273 ======== ======== ======== ======== ======== Interest expense, net (1,580) Gains on foreign exchange 246 -------- Pretax income 38,939 Provision for income taxes 11,259 -------- Income before minority interests $ 27,680 ======== Three months ended October 31, 2004 ----------------------------------------------------- (Unaudited) Asia Europe Americas Pacific Africa Corporate Total -------- -------- -------- -------- -------- -------- Gross revenue from external customers $144,134 $149,962 $191,428 $116,979 $ -- $602,503 ======== ======== ======== ======== ======== ======== Net revenue $ 43,600 $ 72,631 $ 30,202 $ 55,586 $ -- $202,019 Staff costs 23,786 40,547 11,463 24,356 2,084 102,236 Depreciation and amortization 1,289 889 632 1,727 413 4,950 Amortization of intangible assets -- 263 -- 172 -- 435 Other operating expenses 12,524 23,981 7,227 21,558 2,365 67,655 -------- -------- -------- -------- -------- -------- Operating income/ (loss) $ 6,001 $ 6,951 $ 10,880 $ 7,773 $ (4,862) 26,743 ======== ======== ======== ======== ======== Interest income, net 328 Losses on foreign exchange (3) -------- Pretax income 27,068 Provision for income taxes 6,548 Income before -------- minority interests $ 20,520 ======== UTi Worldwide Inc. Segment Reporting (in thousands) Nine months ended October 31, 2005 ------------------------------------------------------------ (Unaudited) Asia Europe Americas Pacific Africa Corporate Total --------- --------- --------- --------- --------- ---------- Gross revenue from external cust- omers $ 512,641 $ 514,683 $ 629,841 $ 400,206 $ -- $2,057,371 ========= ========= ========= ========= ========= ========== Net revenue $ 153,311 $ 272,540 $ 100,463 $ 186,376 $ -- $ 712,690 Staff costs 82,989 161,821 42,081 80,256 8,421 375,568 Depreciation and amortiz- ation 4,250 3,536 2,314 5,876 1,321 17,297 Amortization of intangible assets -- 2,643 192 527 -- 3,362 Other operating expenses 40,694 78,100 24,049 66,240 6,532 215,615 --------- --------- --------- --------- --------- ---------- Operating income/ (loss) $ 25,378 $ 26,440 $ 31,827 $ 33,477 $ (16,274) 100,848 ========= ========= ========= ========= ========= Interest expense, net (2,998) Losses on foreign exchange (216) ---------- Pretax income 97,634 Provision for income taxes 28,190 ---------- Income before minority interests $ 69,444 ========== Nine months ended October 31, 2004 ------------------------------------------------------------ (Unaudited) Asia Europe Americas Pacific Africa Corporate Total --------- --------- --------- --------- --------- ---------- Gross revenue from external cust- omers $ 429,219 $ 411,733 $ 490,714 $ 300,824 $ -- $1,632,490 ========= ========= ========= ========= ========= ========== Net revenue $ 128,113 $ 209,306 $ 79,544 $ 141,548 $ -- $ 558,511 Staff costs 68,369 121,166 32,167 62,154 5,644 289,500 Depreciation and amortiz- ation 3,717 2,566 1,807 4,098 1,287 13,475 Amortization of intangible assets -- 546 -- 319 -- 865 Other operating expenses 36,534 67,833 19,860 55,108 6,378 185,713 --------- --------- --------- --------- --------- ---------- Operating income/ (loss) $ 19,493 $ 17,195 $ 25,710 $ 19,869 $ (13,309) 68,958 ========= ========= ========= ========= ========= Interest income, net 627 Losses on foreign exchange (26) ---------- Pretax income 69,559 Provision for income taxes 18,970 ---------- Income before minority interests $ 50,589 ========== UTi Worldwide Inc. Supplemental Financial Information (in thousands) Three months ended Nine months ended October 31, October 31, ---------------------- ---------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- (Unaudited) FORWARDING, CUSTOMS BROKERAGE & OTHER: Gross revenue from external customers $ 591,056 $ 496,099 $1,648,265 $1,335,889 ========== ========== ========== ========== Net revenue $ 132,653 $ 118,800 $ 385,562 $ 328,941 Staff costs 68,949 58,870 200,264 166,038 Depreciation and amortization 3,287 2,739 9,785 7,952 Other operating expenses 31,939 34,686 101,240 95,285 ---------- ---------- ---------- ---------- Operating income $ 28,478 $ 22,505 $ 74,273 $ 59,666 ========== ========== ========== ========== CONTRACT LOGISTICS, DISTRIBUTION & OTHER: Gross revenue from external customers $ 149,890 $ 106,404 $ 409,106 $ 296,601 ========== ========== ========== ========== Net revenue $ 120,574 $ 83,219 $ 327,128 $ 229,570 Staff costs 61,926 41,282 166,883 117,818 Depreciation and amortization 2,304 1,798 6,191 4,236 Amortization of intangible assets 1,238 435 3,362 865 Other operating expenses 37,814 30,604 107,843 84,050 ---------- ---------- ---------- ---------- Operating income $ 17,292 $ 9,100 $ 42,849 $ 22,601 ========== ========== ========== ==========