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
========== ========== ========== ==========