LONG BEACH, Calif., Sept. 4, 2008 (GLOBE NEWSWIRE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported financial results for its fiscal 2009 second quarter ended July 31, 2008.
Fiscal Second Quarter 2009 vs. 2008 Results:
* Gross revenues increased 20 percent to $1,255.1 million from $1,042.7 million. * Net revenues increased 14 percent to $416.0 million from $365.1 million. * Income from continuing operations was $28.5 million, or $0.28 per diluted share, compared to $27.6 million, or $0.28 per diluted share. * Discontinued operations included a gain of $5.3 million, or $0.05 per diluted share, in the fiscal 2009 second quarter on the sale of the company's art packing business in Europe. * Net income was $33.7 million, or $0.33 per diluted share, compared to $27.7 million, or $0.28 per diluted share.
"Revenues continued to expand primarily due to solid organic growth in both of our business segments," said Roger I. MacFarlane, chief executive officer. "Volume growth in our freight forwarding operations weakened toward the end of the second quarter in conjunction with slowing growth in international trade. This was offset by a meaningful increase in yields, excluding the impact of fuel surcharges. We continued to add new logistics business, resulting in growth in this segment despite the loss of revenue from actions taken through our cost reduction plan. Operating expenses grew at a faster rate than net revenues in the second quarter compared to a year ago, but this trend reversed at the end of the quarter as we started to see a greater impact from our cost reduction plan and profit improvement efforts. We were particularly pleased to see that our efforts in contract logistics led to sequential margin improvement in the quarter. All actions under our cost reduction plan have now been completed and we continue to expect to see the anticipated improvements in the second half of fiscal 2009."
Gross and net revenue gains for the fiscal 2009 second quarter were primarily due to organic growth in nearly all geographic regions, particularly in Europe and Asia Pacific, as well as contributions from acquisitions made by the company since August 1, 2007. The company's adjusted gross and net revenues, excluding acquisitions, increased 17 percent and 10 percent, respectively, in the fiscal 2009 second quarter, compared to the same period last year, despite of the shedding of revenue through the company's cost reduction plan.
Operating expenses in the second quarter of fiscal 2009 totaled $372.4 million, an increase of 16 percent compared to the same period last year. The increase primarily reflects costs to support the company's overall growth, as well as costs attributable to acquisitions. Operating expenses in the fiscal 2009 second quarter included legal and related costs of $0.7 million incurred by the company as a result of the U.S. Department of Justice's publicly announced investigation into the pricing practices of the air cargo transportation industry and other related investigations and lawsuits.
The company sold its art packing business in the fiscal 2009 second quarter as part of its ongoing efforts to focus on its core businesses. This sale resulted in a gain of $5.3 million, or $0.05 per diluted share, in the fiscal 2009 second quarter. The operational results and gain on sale of the art packing business were reported as discontinued operations in the company's condensed consolidated income statements.
Investor Conference Call
UTi management will host an investor conference call today, September 4, 2008, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company's financials and operations for the fiscal 2009 second quarter. Investment professionals are invited to participate in the live call by dialing 888-505-2282 (domestic) or 706-634-5910 (international) using conference ID 60696993. 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 11:00 a.m. PDT, today, through September 11, 2008, by calling 800-642-1687 (domestic) or 706-645-9291 (international) and using replay passcode 60696993.
About UTi Worldwide
UTi Worldwide Inc. is an international, non-asset-based supply chain services and solutions 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' supply chains.
Use of Non-GAAP Financial Information
This press release includes "non-GAAP financial measures" within the meaning of the Securities and Exchange Commission rules. UTi believes that meaningful analysis of its financial performance requires an understanding of the factors underlying that performance and management's judgments about the likelihood that particular factors will repeat. Short-term patterns and long-term trends may be obscured by the impact of certain items. For this reason, the company has referred to gross and net revenue growth adjusted to exclude the impact of acquisitions made since the beginning of the comparative period. This information is among the information the company uses as a basis for evaluating company performance on a comparable basis over time, allocating resources and planning and forecasting of future periods. The company has also provided this information because such adjustments make performance information more comparable to prior disclosures for investors, and may enhance the ability of investors to analyze the company's performance. This information is not intended to be considered in isolation or as a substitute for the relevant measures calculated in accordance with U.S. GAAP.
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 financial goals, as well as the expected impact of the company's cost reduction program. Many important factors may cause the company's actual results to differ materially from those discussed in any such forward-looking statements, including but not limited to economic conditions that are adversely affecting trade volumes; the company's clients' demand for its services; the impact of cost reduction measures recently undertaken by the company and the amount and timing of the expected benefits from such measures, including expected severance costs and dispositions of existing operations in connection therewith; integration risks associated with acquisitions; increased competition; the impact of higher fuel costs; 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 EMENA; work stoppages or slowdowns or other material interruptions in transportation services; risks of international operations; risks associated with, and costs and expenses the company will incur as a result of, the ongoing publicly announced U.S. Department of Justice and other governmental investigations into the pricing practices of the air cargo transportation industry and other similar or related investigations and lawsuits; the success and effects of new strategies and of the realignment of the company's executive management structure; 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, the company cannot assure the reader that the results contemplated in forward-looking statements will be realized in the timeframe anticipated or at all. 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. Accordingly, investors are cautioned not to place undue reliance on our forward-looking statements. UTi undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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, ------------------------ ------------------------ 2008 2007 2008 2007 ----------- ----------- ----------- ----------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues: Airfreight forwarding $ 456,359 $ 360,794 $ 905,514 $ 679,135 Ocean freight forwarding 333,956 265,124 627,459 497,414 Customs brokerage 30,512 23,952 58,657 45,747 Contract logistics 177,410 160,382 342,213 301,897 Distribution 156,327 151,790 305,706 296,046 Other 100,523 80,702 199,988 164,162 ----------- ----------- ----------- ----------- Total revenues 1,255,087 1,042,744 2,439,537 1,984,401 ----------- ----------- ----------- ----------- Operating expenses: Freight consolidation costs: Airfreight forwarding 358,361 282,663 719,487 530,976 Ocean freight forwarding 279,779 222,349 528,444 417,664 Customs brokerage 2,026 767 3,555 1,491 Contract logistics 24,962 22,645 45,835 42,418 Distribution 114,716 100,889 220,073 194,630 Other 59,262 48,326 116,659 98,072 Staff costs 222,731 195,019 439,423 378,798 Depreciation and amortization 11,016 9,758 21,205 19,054 Amortization of intangible assets 3,079 2,053 6,181 4,038 Restructuring and impairments -- -- 6,036 -- Other operating expenses 135,544 115,061 265,358 222,909 ----------- ----------- ----------- ----------- Total operating expenses 1,211,476 999,530 2,372,256 1,910,050 ----------- ----------- ----------- ----------- Operating income 43,611 43,214 67,281 74,351 Interest expense, net (4,043) (3,741) (8,598) (7,829) Other income/ (expense) 193 (166) 633 (534) ----------- ----------- ----------- ----------- Pretax income 39,761 39,307 59,316 65,988 Provision for income taxes 10,034 10,890 15,455 18,803 ----------- ----------- ----------- ----------- Income before minority interests 29,727 28,417 43,861 47,185 Minority interests (1,220) (842) (2,033) (1,732) ----------- ----------- ----------- ----------- Income from continuing operations 28,507 27,575 41,828 45,453 Discontinued operations: Operating income/ (loss), net of tax (77) 92 144 334 Gain on sale, net of tax 5,316 -- 5,316 -- ----------- ----------- ----------- ----------- Net income $ 33,746 $ 27,667 $ 47,288 $ 45,787 =========== =========== =========== =========== Basic earnings per share: Continuing operations $ 0.29 $ 0.28 $ 0.42 $ 0.46 Discontinued operations 0.05 -- 0.06 -- ----------- ----------- ----------- ----------- $ 0.34 $ 0.28 $ 0.48 $ 0.46 Diluted earnings per share: Continuing operations $ 0.28 $ 0.28 $ 0.41 $ 0.46 Discontinued operations 0.05 -- 0.06 -- ----------- ----------- ----------- ----------- $ 0.33 $ 0.28 $ 0.47 $ 0.46 Number of weighted- average shares outstanding used for per share calculations: Basic shares 99,350,699 99,065,970 99,262,635 98,885,454 Diluted shares 100,988,262 100,315,526 100,843,762 100,261,800 UTi Worldwide Inc. Condensed Consolidated Balance Sheets (in thousands) July 31, January 31, 2008 2008 ---------- ---------- (Unaudited) ASSETS Cash and cash equivalents $ 266,341 $ 289,141 Trade receivables, net 967,760 865,019 Deferred income tax assets 19,904 18,768 Other current assets 118,315 79,207 ---------- ---------- Total current assets 1,372,320 1,252,135 Property, plant and equipment, net 184,602 154,123 Goodwill and other intangible assets, net 620,744 617,861 Investments 3,619 2,765 Deferred income tax assets 18,729 17,311 Other non-current assets 16,598 30,481 ---------- ---------- Total assets $2,216,612 $2,074,676 ========== ========== LIABILITIES & SHAREHOLDERS' EQUITY Bank lines of credit $ 147,088 $ 113,199 Short-term borrowings 6,203 5,913 Current portion of long-term borrowings 66,667 33,333 Current portion of capital lease obligations 20,678 21,701 Trade payables and other accrued liabilities 863,692 817,058 Income taxes payable 10,779 12,622 Deferred income tax liabilities 3,906 5,030 ---------- ---------- Total current liabilities 1,119,013 1,008,856 Long-term borrowings 150,638 178,047 Capital lease obligations 27,234 30,612 Deferred income tax liabilities 37,350 38,063 Retirement fund obligations 4,508 4,287 Other non-current liabilities 20,477 19,322 Minority interests 22,933 21,289 Commitments and contingencies Shareholders' equity: Common stock 443,736 435,355 Retained earnings 390,384 349,237 Accumulated other comprehensive income/ (loss) 339 (10,392) ---------- ---------- Total shareholders' equity 834,459 774,200 ---------- ---------- Total liabilities and shareholders' equity $2,216,612 $2,074,676 ========== ========== UTi Worldwide Inc. Condensed Consolidated Statements of Cash Flows (in thousands) Six months ended July 31, ------------------------ 2008 2007 ---------- ---------- (Unaudited) (Unaudited) OPERATING ACTIVITIES: Net income $ 47,288 $ 45,787 Adjustments to reconcile net income to net cash used in operations: Share-based compensation costs, net 5,444 1,304 Depreciation and amortization 21,429 19,237 Amortization of intangible assets 6,181 4,038 Restructuring and impairments 6,036 -- Deferred income taxes (5,754) (1,857) Uncertain tax positions (1,918) -- Gain on sale of subsidiary (5,316) -- Tax benefit relating to exercise of stock options 413 296 Excess tax benefits from share-based compensation (235) (243) (Gain)/loss on disposal of property, plant and equipment (227) 6 Minority interest and other 2,066 (20) Changes in operating assets and liabilities: Increase in trade receivables (94,375) (80,243) Increase in other current assets (8,857) (5,435) Increase in trade payables 34,921 24,933 Increase in accrued liabilities and other liabilities 6,634 15,918 ---------- ---------- Net cash provided by operating activities 13,730 23,721 INVESTING ACTIVITIES: Purchases of property, plant and equipment (30,985) (14,164) Proceeds from disposal of property, plant and equipment 1,828 971 Decrease in other non-current assets 3,892 85 Acquisitions and contingent earn-out payments (30,360) (4,256) Other (3,630) (501) ---------- ---------- Net cash used in investing activities (59,255) (17,865) FINANCING ACTIVITIES: Increase/(decrease) in bank lines of credit 34,989 (3,166) Increase/(decrease) in short-term borrowings 114 (1,623) Repayment of long-term borrowings (311) (419) Repayments of capital lease obligations (13,895) (9,427) Dividends to minority interests (526) -- Net proceeds from the issuance of ordinary shares 2,936 7,093 Excess tax benefits from share-based compensation 235 243 Dividends paid (6,141) (5,925) ---------- ---------- Net cash provided by/(used in) financing activities 17,401 (13,224) Effect of foreign exchange rate changes on cash and cash equivalents 5,324 2,204 ---------- ---------- Net decrease in cash and cash equivalents (22,800) (5,164) Cash and cash equivalents at beginning of period 289,141 278,408 ---------- ---------- Cash and cash equivalents at end of period $ 266,341 $ 273,244 ========== ========== The condensed consolidated statements of cash flows include the activities of discontinued operations. UTi Worldwide Inc. Segment Reporting (in thousands) (Unaudited) Three months ended July 31, 2008 ------------------------------------------------- Contract Logistics Freight and Forwarding Distribution Corporate Total --------- --------- --------- ---------- Revenues $ 876,136 $ 378,951 $ -- $1,255,087 --------- --------- --------- ---------- Freight consolidation costs 681,855 157,251 -- 839,106 Staff costs 102,889 117,563 2,279 222,731 Depreciation and amortization 3,903 7,029 84 11,016 Amortization of intangible assets 845 2,234 -- 3,079 Other operating expenses 47,702 83,079 4,763 135,544 --------- --------- --------- ---------- Total operating expenses 837,194 367,156 7,126 1,211,476 --------- --------- --------- ---------- Operating income/(loss) $ 38,942 $ 11,795 $ (7,126) 43,611 ========= ========= ========= Interest expense, net (4,043) Other income 193 ---------- Pretax income 39,761 Provision for income taxes 10,034 ---------- Income before minority interests 29,727 Minority interests (1,220) ---------- Income from continuing operations 28,507 Discontinued operations: Operating loss, net of tax (77) Gain on sale, net of tax 5,316 ---------- Net income $ 33,746 ========== UTi Worldwide Inc. Segment Reporting (in thousands) (Unaudited) Three months ended July 31, 2007 ------------------------------------------------- Contract Logistics Freight and Forwarding Distribution Corporate Total --------- --------- --------- ---------- Revenues $ 694,224 $ 348,520 $ -- $1,042,744 --------- --------- --------- ---------- Freight consolidation costs 538,075 139,564 -- 677,639 Staff costs 81,322 110,799 2,898 195,019 Depreciation and amortization 3,241 6,449 68 9,758 Amortization of intangible assets -- 2,053 -- 2,053 Other operating expenses 37,172 75,115 2,774 115,061 --------- --------- --------- ---------- Total operating expenses 659,810 333,980 5,740 999,530 --------- --------- --------- ---------- Operating income/(loss) $ 34,414 $ 14,540 $ (5,740) 43,214 ========= ========= ========= Interest expense, net (3,741) Other expense (166) ---------- Pretax income 39,307 Provision for income taxes 10,890 ---------- Income before minority interests 28,417 Minority interests (842) ---------- Income from continuing operations 27,575 Discontinued operations: Operating income, net of tax 92 Gain on sale, net of tax -- ---------- Net income $ 27,667 ========== UTi Worldwide Inc. Segment Reporting (in thousands) (Unaudited) Six months ended July 31, 2008 ------------------------------------------------- Contract Logistics Freight and Forwarding Distribution Corporate Total ---------- -------- --------- ---------- Revenues $1,702,329 $737,208 $ -- $2,439,537 ---------- -------- --------- ---------- Freight consolidation costs 1,332,379 301,674 -- 1,634,053 Staff costs 202,060 232,673 4,690 439,423 Depreciation and amortization 7,715 13,323 167 21,205 Amortization of intangible assets 1,690 4,491 -- 6,181 Restructuring and impairments 2,382 3,654 -- 6,036 Other operating expenses 89,280 166,357 9,721 265,358 ---------- -------- --------- ---------- Total operating expenses 1,635,506 722,172 14,578 2,372,256 ---------- -------- --------- ---------- Operating income/(loss) $ 66,823 $ 15,036 $ (14,578) 67,281 ========== ======== ========= Interest expense, net (8,598) Other income 633 ---------- Pretax income 59,316 Provision for income taxes 15,455 ---------- Income before minority interests 43,861 Minority interests (2,033) ---------- Income from continuing operations 41,828 Discontinued operations: Operating income, net of tax 144 Gain on sale, net of tax 5,316 ---------- Net income $ 47,288 ========== UTi Worldwide Inc. Segment Reporting (in thousands) (Unaudited) Six months ended July 31, 2007 ------------------------------------------------- Contract Logistics Freight and Forwarding Distribution Corporate Total ---------- -------- --------- ---------- Revenues $1,306,312 $678,089 $ -- $1,984,401 ---------- -------- --------- ---------- Freight consolidation costs 1,012,591 272,660 -- 1,285,251 Staff costs 158,867 213,879 6,052 378,798 Depreciation and amortization 6,444 12,503 107 19,054 Amortization of intangible assets -- 4,038 -- 4,038 Other operating expenses 69,749 148,183 4,977 222,909 ---------- -------- --------- ---------- Total operating expenses 1,247,651 651,263 11,136 1,910,050 ---------- -------- --------- ---------- Operating income/(loss) $ 58,661 $ 26,826 $ (11,136) 74,351 ========== ======== ========= Interest expense, net (7,829) Other expense (534) ---------- Pretax income 65,988 Provision for income taxes 18,803 ---------- Income before minority interests 47,185 Minority interests (1,732) ---------- Income from continuing operations 45,453 Discontinued operations: Operating income, net of tax 334 Gain on sale, net of tax -- ---------- Net income $ 45,787 ========== UTi Worldwide Inc. Geographic Reporting (in thousands) (Unaudited) Three months ended July 31, 2008 -------------------------------------------------------- Contract Contract Logistics Logistics and and Freight Distri- Freight Distri- Forwarding bution Forwarding bution Net Net Operating Revenue Revenue Revenue Revenue Income -------- -------- -------- -------- -------- EMENA $311,056 $ 70,524 $ 80,658 $ 44,607 $ 14,482 Americas 171,755 220,133 43,706 114,836 14,843 Asia Pacific 292,042 9,141 45,622 5,814 13,518 Africa 101,283 79,153 24,295 56,443 7,894 Corporate -- -- -- -- (7,126) -------- -------- -------- -------- -------- Total $876,136 $378,951 $194,281 $221,700 $ 43,611 ======== ======== ======== ======== ======== Three months ended July 31, 2007 -------------------------------------------------------- Contract Contract Logistics Logistics and and Freight Distri- Freight Distri- Forwarding bution Forwarding bution Net Net Operating Revenue Revenue Revenue Revenue Income -------- -------- -------- -------- -------- EMENA $200,800 $ 56,843 $ 52,710 $ 29,152 $ 9,818 Americas 146,908 212,150 40,909 122,684 16,246 Asia Pacific 257,191 7,629 39,635 5,192 11,946 Africa 89,325 71,898 22,895 51,928 10,944 Corporate -- -- -- -- (5,740) -------- -------- -------- -------- -------- Total $694,224 $348,520 $156,149 $208,956 $ 43,214 ======== ======== ======== ======== ======== UTi Worldwide Inc. Geographic Reporting (in thousands) (Unaudited) Six months ended July 31, 2008 ---------------------------------------------------------- Contract Contract Logistics Logistics and Restruc- and Freight Distri- turing Freight Distri- Forwarding bution and Forwarding bution Net Net Operating Impair- Revenue Revenue Revenue Revenue Income ments ---------- -------- -------- -------- -------- ------ EMENA $ 593,288 $138,405 $150,283 $ 84,996 $ 20,006 $1,584 Americas 331,545 429,381 85,229 230,258 20,729 3,722 Asia Pacific 580,790 16,792 87,283 10,948 23,801 240 Africa 196,706 152,630 47,155 109,332 17,323 490 Corporate -- -- -- -- (14,578) -- ---------- -------- -------- -------- -------- ------ Total $1,702,329 $737,208 $369,950 $435,534 $ 67,281 $6,036 ========== ======== ======== ======== ======== ====== Six months ended July 31, 2007 ---------------------------------------------------------- Contract Contract Logistics Logistics and Restruc- and Freight Distri- turing Freight Distri- Forwarding bution and Forwarding bution Net Net Operating Impair- Revenue Revenue Revenue Revenue Income ments ---------- -------- -------- -------- -------- ------ EMENA $ 381,433 $112,635 $ 98,401 $ 57,317 $ 16,758 $ -- Americas 277,941 411,657 78,623 237,300 29,121 -- Asia Pacific 475,354 14,773 74,935 10,161 20,469 -- Africa 171,584 139,024 41,762 100,651 19,139 -- Corporate -- -- -- -- (11,136) -- ---------- -------- -------- -------- -------- ------ Total $1,306,312 $678,089 $293,721 $405,429 $ 74,351 $ -- ========== ======== ======== ======== ======== ====== UTi Worldwide Inc. Revenue Growth Reconciliation (in thousands) (Unaudited) Set forth below is a reconciliation of our growth, excluding acquisitions, in our revenues and net revenues over the corresponding prior-year period. Growth Excluding Acquisitions ------------ REVENUES: Three months ended July 31, 2008 (as reported) $1,255,087 Less: Acquisitions impact (1) (32,521) ---------- Three months ended July 31, 2008 (as adjusted) $1,222,566 ========== Three months ended July 31, 2007 $1,042,744 17% ========== ============ (1) Represents revenues attributable to acquisitions that were completed on or after August 1, 2007. Growth Excluding Acquisitions ------------ NET REVENUES: Three months ended July 31, 2008 (as reported) $ 415,981 Less: Acquisitions impact (2) (13,571) ---------- Three months ended July 31, 2008 (as adjusted) $ 402,410 ========== Three months ended July 31, 2007 $ 365,105 10% ========== ============ (2) Represents net revenues attributable to acquisitions that were completed on or after August 1, 2007. UTi Worldwide Inc. Revenue Growth Reconciliation (in thousands) (Unaudited) Set forth below is a reconciliation of our growth, excluding acquisitions, in our revenues and net revenues over the corresponding prior-year period. Growth Excluding Acquisitions ------------ REVENUES: Six months ended July 31, 2008 (as reported) $2,439,537 Less: Acquisitions impact (3) (59,442) ---------- Six months ended July 31, 2008 (as adjusted) $2,380,095 ========== Six months ended July 31, 2007 $1,984,401 20% ========== ============ (3) Represents revenues attributable to acquisitions that were completed on or after August 1, 2007. Growth Excluding Acquisitions ------------ NET REVENUES: Six months ended July 31, 2008 (as reported) $ 805,484 Less: Acquisitions impact (4) (25,935) ---------- Six months ended July 31, 2008 (as adjusted) $ 779,549 ========== Six months ended July 31, 2007 $ 699,150 11% ========== ============ (4) Represents net revenues attributable to acquisitions that were completed on or after August 1, 2007.