RANCHO DOMINGUEZ, Calif., June 7, 2006 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported financial results for the three months ended April 30, 2006.
For the first quarter of fiscal 2007, gross and net revenues each increased 23 percent to $773.7 million and $271.6 million, respectively, from $630.2 million and $221.2 million in the prior-year first quarter, primarily reflecting continued organic growth across all geographic regions. After adjusting for the impact of currency fluctuations and acquisitions made since May 1, 2005, including Market Industries, Ltd. in March 2006, gross and net revenues increased 14 percent and 15 percent, respectively, in the fiscal 2007 first quarter, when compared with the corresponding period a year ago.
"Over the course of our current, five-year NextLeap journey, UTi has grown considerably as the result of the hard work and commitment of our worldwide team," said Roger I. MacFarlane, chief executive officer of UTi Worldwide. "Despite the high cost of fuel weakening airfreight demand, the first quarter of fiscal 2007 maintains this growth trend. As we continue planning for the 'next, NextLeap,' we'll be focused on building an even stronger foundation that will allow us to provide our clients a leadership position in global integrated logistics solutions."
As anticipated in previous announcements, several strategic initiatives designed to strengthen UTi's long-term prospects constrained the company's operating income growth in the fiscal 2007 first quarter, as did share-based compensation expense of $0.03 per share. Including these expenses, the fiscal 2007 first quarter operating income totaled $27.2 million, a slight increase from operating income of $26.9 million in the fiscal 2006 first quarter, which included share-based compensation expense of $0.01 per share. Operating income as a percentage of net revenues equaled 10.0 percent in the fiscal 2007 first quarter, compared with 12.2 percent in the prior-year first quarter.
Net income for the fiscal 2007 first quarter totaled $16.6 million, or $0.17 per diluted share, based on 99,027,366 weighted-average shares outstanding, which reflects the three-for-one split of the company's ordinary shares on March 27, 2006. This compares with net income in the prior-year first quarter of $17.8 million, or $0.18 per diluted share, based on 97,598,289 weighted-average shares outstanding, as adjusted for the stock split described above.
"Through the initiatives that we are presently undertaking and the plans we are developing for the next NextLeap, we are confident that the company will prosper over the long-term as we continue to deliver competitive advantage our clients' global supply chains," MacFarlane said.
Investor Conference Call
UTi management will host an investor conference call today, June 7, 2006, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company's financials and operations for the fiscal 2007 first quarter. 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. PDT, today, through Wednesday, June 14, by calling 888-286-8010 (domestic) or 617-801-6888 (international) and using Replay Passcode 97545046.
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 clients 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 clients' 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 plans which it is developing for the next NextLeap, comments about the company's focus on building a foundation to allow it to provide clients a leadership position in integrated logistics solutions and its prospering over the long-term as the company continues to deliver competitive advantage to its clients' global supply chains, 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; the impact of higher fuel costs; 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.
(Tables Follow)
UTi Worldwide Inc.
Consolidated Income Statements
(in thousands, except share and per share amounts)
Three months ended
April 30,
---------------------------
2006 2005
--------- ---------
(Unaudited)
Gross revenues:
Airfreight forwarding $ 307,570 $ 278,280
Ocean freight forwarding 206,533 186,635
Customs brokerage 19,805 20,308
Contract logistics 118,619 94,586
Other 121,173 50,384
--------- ---------
Total gross revenues $ 773,700 $ 630,193
========= =========
Net revenues:
Airfreight forwarding $ 74,889 $ 70,529
Ocean freight forwarding 31,529 25,584
Customs brokerage 19,159 19,563
Contract logistics 99,698 78,780
Other 46,353 26,742
--------- ---------
Total net revenues 271,628 221,198
Staff costs 150,764 115,771
Depreciation and amortization 7,436 5,704
Amortization of intangible assets 1,851 1,142
Other operating expenses 84,410 71,654
--------- ---------
Operating income 27,167 26,927
Interest (expense), net (3,047) (723)
Gains on foreign exchange 185 74
--------- ---------
Pretax income 24,305 26,278
Provision for income taxes 6,831 7,576
--------- ---------
Income before minority
interests 17,474 18,702
Minority interests (882) (933)
--------- ---------
Net income $ 16,592 $ 17,769
========= =========
Basic earnings per share(a) $ 0.17 $ 0.19
Diluted earnings per share(a) $ 0.17 $ 0.18
Number of weighted-average shares
outstanding used for per share
calculations:
Basic shares(a) 95,481,624 93,010,212
Diluted shares(a) 99,027,366 97,598,289
(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.
Consolidated Balance Sheets
(in thousands)
April 30, January 31,
2006 2006
----------- -----------
(Unaudited)
ASSETS
Cash and cash equivalents $ 142,069 $ 246,510
Trade receivables, net 636,777 497,990
Deferred income tax assets 9,739 8,517
Other current assets 53,321 39,172
----------- -----------
Total current assets 841,906 792,189
Property, plant and equipment, net 111,307 80,443
Goodwill and other intangible
assets, net 539,070 369,371
Investments 1,915 1,050
Deferred income tax assets 7,239 4,027
Other non-current assets 16,874 11,684
----------- -----------
Total assets $ 1,518,311 $ 1,258,764
=========== ===========
LIABILITIES & SHAREHOLDERS' EQUITY
Bank lines of credit $ 254,175 $ 95,177
Short-term borrowings 2,624 4,441
Current portion of capital lease
obligations 7,589 6,189
Trade payables and other accrued
liabilities 511,386 465,100
Income taxes payable 25,212 22,904
Deferred income tax liabilities 2,633 1,694
----------- -----------
Total current liabilities 803,619 595,505
Long-term borrowings 13,252 13,775
Capital lease obligations 18,072 16,068
Deferred income tax liabilities 27,486 11,593
Retirement fund obligations 5,699 5,124
Other long-term liabilities 11,037 4,960
Minority interests 26,223 25,219
Commitments and contingencies
Shareholders' equity:
Common stock 368,657 359,835
Retained earnings 264,339 253,573
Accumulated other comprehensive loss (20,073) (26,888)
----------- -----------
Total shareholders' equity 612,923 586,520
----------- -----------
Total liabilities and
shareholders' equity $ 1,518,311 $ 1,258,764
=========== ===========
UTi Worldwide Inc.
Consolidated Statements of Cash Flows
(in thousands)
Three months ended
April 30,
----------------------
2006 2005
--------- ---------
(Unaudited)
OPERATING ACTIVITIES:
Net income $ 16,592 $ 17,769
Adjustments to reconcile net
income to net cash used
in operating activities:
Share-based compensation costs 2,784 1,332
Depreciation and amortization 7,436 5,704
Amortization of intangible assets 1,851 1,142
Deferred income taxes (380) (2,363)
Tax benefit relating to exercise
of stock options 386 998
Excess tax benefits from share-based
compensation (329) --
Gain on disposal of property,
plant and equipment (76) (32)
Other 1,003 928
Changes in operating assets
and liabilities:
Increase in trade receivables (92,481) (36,863)
(Increase)/decrease in other
current assets (4,348) 4,948
Decrease in trade payables (26,127) (10,734)
Increase in other current
liabilities 34,451 13,822
--------- ---------
Net cash used in operating activities (59,238) (3,349)
INVESTING ACTIVITIES:
Purchases of property, plant
and equipment (4,543) (4,168)
Proceeds from disposal of property,
plant and equipment 399 180
Increase in other non-current assets (5,325) (144)
Acquisitions of subsidiaries and
contingent earn-out payments (197,238) (2,907)
Other (860) (868)
--------- ---------
Net cash used in investing activities (207,567) (7,907)
FINANCING ACTIVITIES:
Increase/(decrease) in bank lines
of credit 158,998 (11,107)
Decrease in short-term borrowings (1,873) (452)
Increase in long-term borrowings 211 --
Repayments of long-term borrowings (747) (129)
Repayments of capital lease obligations (2,155) (1,310)
Net proceeds from issuance of
ordinary shares 5,652 2,368
Excess tax benefits from
share-based compensation 329 --
--------- ---------
Net cash provided by/(used in)
financing activities 160,415 (10,630)
Effect of foreign exchange rate changes 1,949 (2,114)
--------- ---------
Net decrease in cash and
cash equivalents (104,441) (24,000)
Cash and cash equivalents at beginning
of period 246,510 178,132
--------- ---------
Cash and cash equivalents at end
of period $ 142,069 $ 154,132
========= =========
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three months ended April 30, 2006
----------------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
--------- --------- --------- --------- -------- ---------
Gross
revenue
from
external
customers $ 184,093 $ 240,815 $ 207,680 $ 141,112 $ -- $ 773,700
========= ========= ========= ========= ======== =========
Net
revenue $ 54,329 $ 115,496 $ 35,637 $ 66,166 $ -- $ 271,628
Staff
costs 31,784 70,446 15,222 29,788 3,524 150,764
Depre-
ciation
and amor-
tization 1,408 2,605 835 2,084 504 7,436
Amortization
of intangible
assets -- 1,553 115 183 -- 1,851
Other
operating
expenses 16,107 31,714 9,031 24,561 2,997 84,410
--------- --------- --------- --------- -------- ---------
Operating
income/
(loss) $ 5,030 $ 9,178 $ 10,434 $ 9,550 $ (7,025) 27,167
========= ========= ========= ========= ========
Interest
expense, net (3,047)
Gains on
foreign
exchange 185
---------
Pretax income 24,305
Provision for
income taxes 6,831
---------
Income before
minority interests $ 17,474
=========
Three months ended April 30, 2005
----------------------------------------------------------
(Unaudited)
Asia
Europe Americas Pacific Africa Corporate Total
--------- --------- --------- --------- -------- ---------
Gross
revenue
from
external
customers $ 161,983 $ 156,778 $ 181,714 $ 129,718 $ -- $ 630,193
========= ========= ========= ========= ======== =========
Net
revenue $ 49,628 $ 80,424 $ 28,727 $ 62,419 $ -- $ 221,198
Staff
costs 27,161 46,531 12,461 27,367 2,251 115,771
Depre-
ciation
and amor-
tization 1,415 1,116 693 1,985 495 5,704
Amortization
of intangible
assets -- 956 -- 186 -- 1,142
Other
operating
expenses 13,462 24,699 7,261 24,051 2,181 71,654
--------- --------- --------- --------- -------- ---------
Operating
income/
(loss) $ 7,590 $ 7,122 $ 8,312 $ 8,830 $ (4,927) 26,927
========= ========= ========= ========= ========
Interest
expense, net (723)
Gains on
foreign exchange 74
--------
Pretax income 26,278
Provision for
income taxes 7,576
--------
Income before
minority interests $ 18,702
=========
UTi Worldwide Inc.
Supplemental Financial Information
(in thousands)
Three months ended
April 30,
------------------------------
2006 2005
---------- ----------
(Unaudited)
FORWARDING, CUSTOMS BROKERAGE & OTHER:
Gross revenue from
external customers $ 561,900 $ 507,594
========== ==========
Net revenue $ 133,777 $ 124,860
Staff costs 73,456 65,569
Depreciation and amortization 3,177 3,260
Other operating expenses 36,781 35,915
---------- ----------
Operating income $ 20,363 $ 20,116
========== ==========
CONTRACT LOGISTICS, DISTRIBUTION & OTHER:
Gross revenue from
external customers $ 211,800 $ 122,599
========== ==========
Net revenue $ 137,851 $ 96,338
Staff costs 73,784 47,951
Depreciation and amortization 3,755 1,949
Amortization of intangible assets 1,851 1,142
Other operating expenses 44,632 33,558
---------- ----------
Operating income $ 13,829 $ 11,738
========== ==========