RANCHO DOMINGUEZ, Calif., March 29, 2006 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported financial results for the three months and fiscal year ended January 31, 2006.
For the fourth quarter of fiscal 2006, gross and net revenues increased 16 percent and 18 percent, respectively, to $728.2 million and $253.7 million, versus the prior-year fourth quarter, due primarily to organic growth. After adjusting for the impact of the generally strengthening U.S. dollar and acquisitions made by UTi during fiscal 2006, gross and net revenues increased 19 percent and 20 percent, respectively, in the fourth quarter of fiscal 2006 when compared to the prior-year fourth quarter.
Operating income for the fiscal 2006 fourth quarter totaled $31.2 million, up 18 percent from $26.5 million in the fiscal 2005 fourth quarter. Operating income as a percentage of net revenues was 12.3 percent in the fiscal 2006 fourth quarter, which was consistent with the 2005 fourth quarter. Operating income as a percentage of net revenues in the fourth quarter of fiscal 2006 was impacted primarily by the growing contribution of UTi's contract logistics operations, which typically has lower operating margins than the company's freight forwarding operations, and by higher corporate expenses. In addition, the growth in operating income as a percentage of net revenues in the fourth quarter of fiscal 2006 for UTi's freight forwarding operations was constrained by the impact of the expenses related to the reorganization of the company's Brazilian operations and the company's opportunistic hiring of sales personnel, as previously disclosed.
Net income for the fiscal 2006 fourth quarter increased 20 percent to $22.3 million, or $0.23 per diluted share, based on 98.7 million shares outstanding, which reflects UTi's three-for-one split of the company's ordinary shares implemented March 27, 2006. This compares with net income in the prior-year fourth quarter of $18.6 million, or $0.19 per diluted share, based on 96.6 million shares outstanding, as adjusted for the company's recent stock split.
"We're pleased with these results as they reflect another quarter of solid organic growth in each of UTi's geographic regions as we continue to pursue and invest in our NextLeap goal of providing customized global integrated logistics solutions for our clients," said Roger I. MacFarlane, chief executive officer of UTi.
For the fiscal year ended January 31, 2006, gross revenues grew 23 percent to $2.8 billion from $2.3 billion in fiscal 2005. Net revenues for fiscal 2006 totaled $966.4 million, up 25 percent from $773.8 million in the prior fiscal year. Operating income rose 38 percent to $132.1 million from $95.5 million in fiscal 2005, and operating income as a percentage of net revenues increased to 13.7 percent for the year ended January 31, 2006, from 12.3 percent in the prior fiscal year.
Net income for fiscal 2006 totaled $88.4 million, or $0.90 per diluted share, based on 98.0 million shares outstanding, as adjusted for UTi's recent three-for-one stock split. This represents a 31 percent increase from the prior year's net income of $67.5 million, or $0.71 per diluted share, based on 95.7 million shares outstanding on a post-split basis.
Fiscal 2006 cash flow from operations grew 83 percent over fiscal 2005 levels to $131 million.
"UTi's employees worldwide, with their dedicated commitment to our NextLeap strategy, which centers on our clients' success, delivered another year of strong performance and helped fuel our emerging role as a global leader of integrated supply chain solutions," MacFarlane said. "Our ability to generate solid cash flow from operations in fiscal 2006 is a testament to the leverage in our business model, and we are continuing to make progress toward fortifying the platform from which we expect to operate in the years ahead. We are also seeking to take advantage of recent industry consolidations to significantly expand our sales organization with experienced professionals who bring strong customer relationships to UTi. Moreover, during the year we moved even closer to our NextLeap destination of delivering a global integrated logistics solution to our clients with the addition of transportation management optimization skills, and earlier this month we added domestic freight management and truckload brokerage capabilities, both in the U.S.
"Looking forward to the final year of our five-year NextLeap journey, we are working hard to gain further operating efficiencies and have already begun planning for the next phase of our future strategy. As we have previously commented, while the initiatives and investments we are undertaking are expected to impact our financial performance in the near-term, along with the expensing of stock options which will begin in fiscal 2007, we believe we are taking the appropriate steps to enable UTi to achieve our future growth objectives. We remain confident that our strategic direction will result in long-term value for our clients, employees, shareholders and other stakeholders," MacFarlane said.
Investor Conference Call
UTi management will host an investor conference call today, March 29, 2006, at 8:00 a.m. PST (11:00 a.m. EST) to review the company's financials and operations for the fiscal 2006 fourth quarter and year ended January 31, 2006. The call will be open to all interested investors through a live, listen-only audio Internet broadcast 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 Friday, March 31, by calling 888-286-8010 (domestic) or 617-801-6888 (international) and using Passcode 25792142.
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, distribution, inbound logistics, truckload 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, retail, 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 NextLeap goals and journey, UTi's growth strategies and strategic direction to provide long-term value, the company's emerging role as a global leader of integrated supply chain solutions, comments about the company's progress towards fortifying its platform and any other statements which are not historical facts. 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, including the company's recent acquisition of Market Industries, Ltd. and the possibility that certain expected acquisition related tax consequences will not be realized; 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 conditions such as inventory build-up, economic slowdowns, and declines in world trade or consumer confidence; work stoppages or slowdowns or other material interruptions in transportation services; risks of international operations; the success and effects of new strategies; disruptions caused by 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. 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 Twelve months ended
January 31, January 31,
----------------------- ------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
Gross revenues:
Airfreight
forwarding $ 312,187 $ 274,681 $ 1,213,987 $ 1,017,560
Ocean freight
forwarding 217,020 192,365 826,079 672,641
Customs
brokerage 19,770 20,235 80,960 77,568
Contract
logistics 118,449 82,697 443,738 312,289
Other 60,778 57,325 220,811 179,735
----------- ----------- ----------- -----------
Total gross
revenues $ 728,204 $ 627,303 $ 2,785,575 $ 2,259,793
=========== =========== =========== ===========
Net revenues:
Airfreight
forwarding $ 74,009 $ 68,343 $ 290,993 $ 253,289
Ocean freight
forwarding 32,406 27,352 118,346 98,877
Customs
brokerage 19,338 19,794 78,503 75,352
Contract
logistics 98,055 73,054 370,714 257,141
Other 29,906 26,727 107,848 89,122
----------- ----------- ----------- -----------
Total net
revenues 253,714 215,270 966,404 773,781
Staff costs 139,184 108,265 514,752 397,765
Depreciation and
amortization 4,655 5,978 21,952 19,453
Amortization of
intangible
assets 1,328 1,115 4,690 1,980
Other operating
expenses 77,331 73,419 292,946 259,132
----------- ----------- ----------- -----------
Operating income 31,216 26,493 132,064 95,451
Interest
expense, net (871) (1,101) (3,869) (474)
(Losses)/gains
on foreign
exchange (87) 999 (303) 973
----------- ----------- ----------- -----------
Pretax income 30,258 26,391 127,892 95,950
Provision for
income taxes 7,065 6,728 35,255 25,698
----------- ----------- ----------- -----------
Income before
minority
interests 23,193 19,663 92,637 70,252
Minority
interests (935) (1,051) (4,213) (2,723)
----------- ----------- ----------- -----------
Net income $ 22,258 $ 18,612 $ 88,424 $ 67,529
=========== =========== =========== ===========
Basic earnings
per share(a) $ 0.23 $ 0.20 $ 0.94 $ 0.73
Diluted earnings
per share(a) $ 0.23 $ 0.19 $ 0.90 $ 0.71
Number of
weighted-
average shares
outstanding
used for per
share
calculations:
Basic shares(a) 94,924,571 92,618,673 94,146,993 92,203,080
Diluted
shares(a) 98,662,721 96,584,832 98,042,114 95,705,328
(a) All periods presented have been adjusted for a three-for-one
split of UTi's ordinary shares effected on March 27, 2006.
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
January 31, January 31,
2006 2005
----------- -----------
(Unaudited)
ASSETS
Cash and cash equivalents $ 246,510 $ 178,132
Trade receivables, net 497,990 435,223
Deferred income tax assets 8,517 10,027
Other current assets 39,172 44,509
----------- -----------
Total current assets 792,189 667,891
Property, plant and equipment, net 80,443 71,190
Goodwill and other intangible
assets, net 350,907 293,775
Investments 1,050 587
Deferred income tax assets 4,027 1,104
Other non-current assets 11,684 10,120
----------- -----------
Total assets $ 1,240,300 $ 1,044,667
=========== ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Bank lines of credit $ 95,177 $ 92,340
Short-term borrowings 4,441 3,165
Current portion of capital lease
obligations 6,189 3,465
Trade payables and other accrued
liabilities 465,100 413,003
Income taxes payable 22,904 18,533
Deferred income tax liabilities 1,694 678
----------- -----------
Total current liabilities 595,505 531,184
Long-term borrowings 13,775 5,105
Capital lease obligations 16,068 9,820
Deferred income tax liabilities 11,593 19,607
Retirement fund obligations 5,124 1,332
Other long-term liabilities 4,960 136
Minority interests 6,755 3,293
Commitments and contingencies
Shareholders' equity:
Common stock 359,835 325,905
Retained earnings 253,573 169,821
Accumulated other comprehensive
loss (26,888) (21,536)
----------- -----------
Total shareholders' equity 586,520 474,190
----------- -----------
Total liabilities and shareholders'
equity $ 1,240,300 $ 1,044,667
=========== ===========
UTi Worldwide Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Twelve months ended
January 31,
----------------------
2006 2005
--------- ---------
(Unaudited)
OPERATING ACTIVITIES:
Net income $ 88,424 $ 67,529
Adjustments to reconcile net income to net
cash used in operating activities:
Stock compensation costs 5,163 576
Depreciation and amortization 21,952 19,453
Amortization of intangible assets 4,690 1,980
Deferred income taxes (3,154) 1,440
Tax benefit relating to exercise of stock
options 2,984 1,586
Gain on disposal of property, plant and
equipment (1,046) (177)
Other 4,210 2,481
Changes in operating assets and liabilities:
Increase in trade receivables and other
current assets (54,118) (127,116)
Increase in trade payables and other
current liabilities 61,885 103,647
--------- ---------
Net cash provided by operating
activities 130,990 71,399
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (17,802) (20,870)
Proceeds from disposal of property, plant
and equipment 3,117 2,698
Increase in other non-current assets (2,230) (888)
Acquisitions of subsidiaries and contingent
earn-out payments (53,168) (118,179)
Other 118 773
--------- ---------
Net cash used in investing activities (69,965) (136,466)
FINANCING ACTIVITIES:
Increase in bank lines of credit 2,837 74,160
Increase in short-term borrowings 663 4,063
Long-term borrowings -- advanced 13,814 1,946
Long-term borrowings -- repaid (5,626) (316)
Repayments of capital lease obligations (5,713) (4,612)
Decrease in minority interests (773) (713)
Net proceeds from issuance of ordinary
shares 10,766 5,334
Dividends paid (4,672) (3,563)
--------- ---------
Net cash provided by financing activities 11,296 76,299
--------- ---------
Net increase in cash and cash equivalents 72,321 11,232
Cash and cash equivalents at beginning of
period 178,132 156,687
Effect of foreign exchange rate changes (3,943) 10,213
--------- ---------
Cash and cash equivalents at end of period $ 246,510 $ 178,132
========= =========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three months ended January 31, 2006
-----------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
-------- -------- -------- -------- -------- --------
Gross revenue
from external
customers $181,020 $183,539 $224,876 $138,769 $ -- $728,204
======== ======== ======== ======== ======== ========
Net revenue $ 55,854 $101,319 $ 35,895 $ 60,646 $ -- $253,714
Staff costs 29,405 63,058 15,529 28,056 3,136 139,184
Depreciation
and
amortization 1,468 1,376 848 490 473 4,655
Amortization
of intangible
assets -- 1,036 114 178 -- 1,328
Other
operating
expenses 14,731 29,205 8,552 19,823 5,020 77,331
-------- -------- -------- -------- -------- --------
Operating
income/(loss) $ 10,250 $ 6,644 $ 10,852 $ 12,099 $ (8,629) 31,216
======== ======== ======== ======== ========
Interest
expense, net (871)
Losses on
foreign
exchange (87)
--------
Pretax income 30,258
Provision for
income taxes 7,065
--------
Income before
minority
interests $ 23,193
========
Three months ended January 31, 2005
-----------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
-------- -------- -------- -------- -------- --------
Gross revenue
from external
customers $153,209 $151,120 $190,818 $132,156 $ -- $627,303
======== ======== ======== ======== ======== ========
Net revenue $ 48,312 $ 77,454 $ 29,615 $ 59,889 $ -- $215,270
Staff costs 25,833 43,449 12,420 24,956 1,607 108,265
Depreciation
and
amortization 1,696 1,108 669 1,971 534 5,978
Amortization
of intangible
assets -- 931 -- 184 -- 1,115
Other
operating
expenses 12,953 26,747 7,245 22,627 3,847 73,419
-------- -------- -------- -------- -------- --------
Operating
income/(loss) $ 7,830 $ 5,219 $ 9,281 $ 10,151 $ (5,988) 26,493
======== ======== ======== ======== ========
Interest
expense, net (1,101)
Gains on
foreign
exchange 999
--------
Pretax income 26,391
Provision for
income taxes 6,728
--------
Income before
minority
interests $ 19,663
========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Twelve months ended January 31, 2006
------------------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
--------- --------- --------- --------- --------- ----------
Gross
revenue
from
external
cust-
omers $ 693,661 $ 698,222 $ 854,717 $ 538,975 $ -- $2,785,575
========= ========= ========= ========= ========= ==========
Net
revenue $ 209,165 $ 373,859 $ 136,358 $ 247,022 $ -- $ 966,404
Staff
costs 112,394 224,879 57,610 108,312 11,557 514,752
Depreciation
and
amortiz-
ation 5,718 4,912 3,162 6,366 1,794 21,952
Amortization
of
intangible
assets -- 3,679 306 705 -- 4,690
Other
operating
expenses 55,425 107,305 32,601 86,063 11,552 292,946
--------- --------- --------- --------- --------- ----------
Operating
income/
(loss) $ 35,628 $ 33,084 $ 42,679 $ 45,576 $ (24,903) 132,064
========= ========= ========= ========= =========
Interest
expense,
net (3,869)
Losses on
foreign
exchange (303)
----------
Pretax
income 127,892
Provision
for
income
taxes 35,255
----------
Income
before
minority
interests $ 92,637
==========
Twelve months ended January 31, 2005
------------------------------------------------------------
Asia
Europe Americas Pacific Africa Corporate Total
--------- --------- --------- --------- --------- ----------
Gross
revenue
from
external
cust-
omers $ 582,428 $ 562,853 $ 681,532 $ 432,980 $ -- $2,259,793
========= ========= ========= ========= ========= ==========
Net
revenue $ 176,425 $ 286,760 $ 109,159 $ 201,437 $ -- $ 773,781
Staff
costs 94,202 164,615 44,587 87,110 7,251 397,765
Depreciation
and
amortiz-
ation 5,413 3,674 2,476 6,069 1,821 19,453
Amortization
of
intangible
assets -- 1,477 -- 503 -- 1,980
Other
operating
expenses 49,487 94,580 27,105 77,735 10,225 259,132
--------- --------- --------- --------- --------- ----------
Operating
income/
(loss) $ 27,323 $ 22,414 $ 34,991 $ 30,020 $ (19,297) 95,451
========= ========= ========= ========= =========
Interest
expense,
net (474)
Gains on
foreign
exchange 973
----------
Pretax
income 95,950
Provision
for
income
taxes 25,698
----------
Income
before
minority
interests $ 70,252
==========
UTi Worldwide Inc.
Supplemental Financial Information
(in thousands)
Three months ended Twelve months ended
January 31, January 31,
--------------------- ---------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
(Unaudited)
FORWARDING, CUSTOMS BROKERAGE AND OTHER:
Gross revenue from external
customers $ 578,537 $ 518,273 $2,226,802 $1,854,162
========== ========== ========== ==========
Net revenue $ 133,377 $ 125,944 $ 518,939 $ 454,885
Staff costs 71,210 63,455 271,474 229,493
Depreciation and
amortization 2,130 3,396 11,915 11,348
Other operating expenses 32,730 36,191 133,970 131,476
---------- ---------- ---------- ----------
Operating income $ 27,307 $ 22,902 $ 101,580 $ 82,568
========== ========== ========== ==========
CONTRACT LOGISTICS, DISTRIBUTION AND OTHER:
Gross revenue from
external customers $ 149,667 $ 109,030 $ 558,773 $ 405,631
========== ========== ========== ==========
Net revenue $ 120,337 $ 89,326 $ 447,465 $ 318,896
Staff costs 64,838 43,203 231,721 161,021
Depreciation and
amortization 2,052 2,048 8,243 6,284
Amortization of
intangible assets 1,328 1,115 4,690 1,980
Other operating expenses 39,581 33,381 147,424 117,431
---------- ---------- ---------- ----------
Operating income $ 12,538 $ 9,579 $ 55,387 $ 32,180
========== ========== ========== ==========