UTi Worldwide Reports Fiscal 2013 Third Quarter Results

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| Source: UTi Worldwide

LONG BEACH, Calif., Dec. 6, 2012 (GLOBE NEWSWIRE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported financial results for its fiscal 2013 third quarter ended October 31, 2012.

Fiscal Third Quarter 2013 vs. 2012 Results:

  • Revenues were $1,128.9 million, a decrease of 10.7 percent from $1,264.5 million.
  • Net revenues (revenues minus purchased transportation costs) were $403.6 million, a decrease of 9.0 percent from $443.4 million.
  • Net income attributable to UTi Worldwide Inc. was $10.5 million, or $0.10 per diluted share, compared to $28.5 million, or $0.28 per diluted share.
  • After-tax severance and legal costs were $5.8 million, compared to $1.1 million.
  • Excluding severance and legal costs, adjusted net income attributable to UTi Worldwide Inc. was $16.3 million, or $0.16 per diluted share, compared to $29.7 million, or $0.29 per diluted share.
  • All references to adjusted items and organic items in this release refer to non-GAAP results. A reconciliation of GAAP to these non-GAAP results is provided in the supplemental financial information attached to this release.

Eric W. Kirchner, chief executive officer, said, "Macroeconomic and freight conditions remained weak throughout our fiscal 2013 third quarter, and we see no real catalysts to drive increases in the foreseeable future. Global economies are slowing, consumer demand is weak and clients remain very cautious. As we anticipated, a broad peak season failed to materialize in the third quarter. Airfreight lagged the most, as weight per shipment fell and clients favored lower cost options like ocean freight. Competition remains intense and carriers have attempted to increase shipping rates. This dynamic is pressuring net revenue per unit throughout the industry. Contract logistics activity was lower in the third quarter, primarily in Europe and the Americas, while distribution activity in Africa was higher. We continued to win new business, but at a pace that was insufficient to offset the reductions from existing business in both segments."

Kirchner continued, "Our operating expenses, which are more closely tied to shipments rather than tonnage or TEU count, did not decrease as much as net revenue. In response to lower volumes, we are taking additional actions to remove approximately $25 million in annualized expenses, some of which we had planned to execute through our transformation in fiscal 2014. Our system rollout is progressing. We have launched our new operating system in five countries and our new financial system in 12 countries. We have plans to deploy both systems in more countries by the end of the fiscal year. We remain focused on achieving our operating ratio targets within fiscal 2015."

Revenues decreased 10.7 percent in the fiscal 2013 third quarter compared to the same period last year, primarily due to the impact of currency, weaker airfreight tonnage and lower pricing. Net revenues fell 9.0 percent in the fiscal 2013 third quarter, primarily due to currency translation and lower volumes. On an organic basis, revenues decreased 6.5 percent, while net revenues decreased 4.2 percent in the fiscal 2013 third quarter, compared to the same period last year.

Operating expenses less purchased transportation costs were $380.9 million in the third quarter of fiscal 2013, compared to $395.1 million in the same period last year. The company accrued $5.2 million for a recent legal judgment relating to a warehouse fire in 2006. Severance costs (before taxes) totaled $3.9 million in the fiscal 2013 third quarter, compared to $1.7 million in the third quarter of last year. Severance costs in both periods were primarily related to the company's transformation activities.

Excluding severance and legal costs from both periods, adjusted operating expenses less purchased transportation costs were $371.8 million in the fiscal 2013 third quarter, a decrease of 5.5 percent from $393.4 million in the same period last year, primarily due to currency effects. On an organic basis, adjusted operating expenses less purchased transportation costs decreased 0.6 percent, compared to the same period last year.

Operating income in the fiscal 2013 third quarter was $22.7 million. Excluding severance and other costs described above, adjusted operating income was $31.8 million, or 7.9 percent of net revenues. This compares to adjusted operating income in the fiscal 2012 third quarter of $49.9 million, or 11.3 percent of net revenues. Currency effects reduced operating income in the fiscal 2013 third quarter by $1.9 million. In addition, the negative impact from superstorm Sandy and the transportation strikes in South Africa are estimated at approximately $3.5 million in the third quarter.

Investor Conference Call:

UTi management will host an investor conference call today, December 6, 2012, at 8:00 a.m. PST (11:00 a.m. EST) to review the company's financial results for the fiscal 2013 third quarter. Investment professionals are invited to participate in the live call by dialing 877-941-0844 (domestic) or 480-629-9835 (international) using conference ID 4577233. 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. PST, today, through December 9, 2012, by calling 800-406-7325 (domestic) or 303-590-3030 (international) and using replay passcode 4577233.

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 the company'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 included information in this press release relating to organic revenue and organic net revenue changes, which are adjusted to exclude the impact of currency fluctuations between comparable periods. The company also has referred to operating expenses less purchased transportation costs, and to adjusted operating expenses less purchased transportation costs, which are operating expenses less purchased transportation costs that are further adjusted to exclude severance and other costs. The company has also included information relating to organic adjusted operating expenses less purchased transportation costs, which are adjusted operating expenses less purchased transportation costs that are further adjusted to exclude the impact of currency fluctuations between comparable periods. The company has further referred to adjusted operating income and adjusted net income, each of which is adjusted to exclude severance and other costs as described above. 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, or superior to, the relevant measures prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the tables at the end of this press release.

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 forward-looking statements may include, but are not limited to, statements about the continuation of adverse macroeconomic and freight trends for the foreseeable future, the long-term outlook for the company and the industry, the company's ability to remove approximately $25 million in annualized expenses, the status and timing of the company's freight forwarding operating and finance systems, including its plans to launch in additional countries by the end of fiscal 2013, the company's focus on achieving its long-term operating ratio targets within fiscal 2015, and any other statements not of an historical nature. 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: volatility with respect to global trade; global economic, political and market conditions, including those in Africa, Asia and EMENA; risks associated with the company's business transformation initiative; volatile fuel costs; transportation capacity, pricing dynamics and the ability of the company to secure space on third party aircraft, ocean vessels and other modes of transportation; changes in foreign exchange rates; material interruptions in transportation services; risks of international operations; risks associated with, and the potential for penalties, fines, costs and expenses the company may incur as a result of the ongoing publicly announced governmental investigations into the international air freight and air cargo transportation industry and other related investigations and lawsuits; risks of adverse legal judgments and other liabilities not limited by contract or covered by insurance; the financial condition of the company's customers; disruptions caused by epidemics, natural disasters, conflicts, wars and terrorism; and the other risks and uncertainties described in "Risk Factors" and "Forward-looking Statements" in the company's Annual Report on Form 10-K/A for the fiscal year ended January 31, 2012, any subsequently filed Quarterly Reports on Form 10-Q and as described in the company's other filings with the Securities and Exchange Commission. 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 in the timeframe anticipated or at all. Investors are cautioned not to place undue reliance on the company's 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 Statements of Income
(in thousands, except share and per share amounts)
         
  Three months ended October 31,  Nine months ended October 31,
  2012 2011 2012 2011
         
Revenues: (Unaudited) (Unaudited)
Airfreight forwarding $344,757 $431,247 $1,096,291 $1,335,948
Ocean freight forwarding 295,434 325,499 885,040 927,773
Customs brokerage 29,655 31,579 88,335 94,914
Contract logistics 203,347 217,227 608,818 629,051
Distribution 152,767 146,772 448,169 415,866
Other 102,906 112,212 306,284 357,047
Total revenues 1,128,866 1,264,536 3,432,937 3,760,599
         
Operating expenses:        
Purchased transportation costs:        
Airfreight forwarding 265,280 335,369 853,786 1,051,426
Ocean freight forwarding 243,791 271,832 731,506 772,685
Customs brokerage 1,375 1,062 4,154 3,822
Contract logistics 53,445 53,668 157,798 151,876
Distribution 104,833 100,413 304,065 283,663
Other 56,540 58,817 166,188 199,779
         
Staff costs 219,055 238,868 675,573 715,348
Depreciation 12,254 12,204 34,979 36,437
Amortization of intangible assets 2,974 3,870 9,376 12,098
Severance and other 9,097 1,655 12,921 9,987
Other operating expenses 137,542 138,497 403,341 416,663
Total operating expenses 1,106,186 1,216,255 3,353,687 3,653,784
Operating income 22,680 48,281 79,250 106,815
Interest expense, net  (2,225)  (3,323)  (7,527)  (11,414)
Other expense, net  (208)  (677)  (508)  (278)
Pretax income 20,247 44,281 71,215 95,123
Provision for income taxes 7,378 13,971 23,899 29,465
Net income 12,869 30,310 47,316 65,658
Net income attributable to noncontrolling interests 2,321 1,774 4,999 5,506
Net income attributable to UTi Worldwide Inc. $10,548 $28,536 $42,317 $60,152
         
Basic earnings per common share attributable to UTi Worldwide Inc. common shareholders $0.10 $0.28 $0.41 $0.59
         
Diluted earnings per common share attributable to UTi Worldwide Inc. common shareholders $0.10 $0.28 $0.41 $0.58
         
Number of weighted-average common shares outstanding used for per share calculations        
Basic shares 103,736,084 102,755,296 103,468,700 102,514,547
Diluted shares 103,953,783 103,410,669 103,947,047 103,460,757
 
 
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
     
  October 31,
2012
January 31,
2012
  (Unaudited)
Assets    
     
Cash and cash equivalents $226,993 $321,761
Trade receivables, net 996,221 947,480
Deferred income taxes 19,897 20,372
Other current assets 149,069 132,545
Total current assets 1,392,180 1,422,158
     
Property, plant and equipment, net 245,805 216,299
Goodwill and other intangible assets, net 544,638 534,237
Investments 995 1,108
Deferred income taxes 40,856 43,272
Other non-current assets 37,336 38,575
     
Total assets $2,261,810 $2,255,649
     
Liabilities & Equity    
     
Bank lines of credit $150,381 $76,240
Short-term borrowings 968 1,019
Current portion of long-term borrowings 44,041 21,775
Current portion of capital lease obligations 10,792 13,768
Trade payables and other accrued liabilities 766,887 859,086
Income taxes payable 14,696 12,657
Deferred income taxes 3,949 1,927
Total current liabilities 991,714 986,472
     
Long-term borrowings, excluding current portion 218,715 231,204
Capital lease obligations, excluding current portion 14,596 15,845
Deferred income taxes 24,649 31,845
Other non-current liabilities  40,104 38,775
     
Commitments and contingencies    
     
UTi Worldwide Inc. shareholders' equity:    
Common stock 501,400 491,073
Retained earnings 539,769 503,675
Accumulated other comprehensive loss  (83,059)  (55,983)
Total UTi Worldwide Inc. shareholders' equity 958,110 938,765
Non-controlling interests 13,922 12,743
Total equity 972,032 951,508
     
Total liabilities and equity $2,261,810 $2,255,649
 
 
UTi Worldwide Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
   
  Nine months ended
October 31,
  2012 2011
  (Unaudited)
     
Operating Activities:    
Net income $47,316 $65,658
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:    
Share-based compensation costs  11,689  11,302
Depreciation   34,979  36,437
Amortization of intangible assets  9,376  12,098
Amortization of debt issuance costs  931  1,925
Deferred income taxes  (2,937)  275
Uncertain tax positions  (1,136)  391
Excess tax benefits from share-based compensation  (9)  (430)
Loss/(gain) on disposal of property, plant and equipment  25  (632)
Provision for doubtful accounts  978  4,474
Other   1,450  1,512
Net changes in operating assets and liabilities  (160,135)  (111,339)
Net cash (used in)/provided by operating activities  (57,473)  21,671
     
Investing Activities:    
Purchases of property, plant and equipment, excluding software  (31,371)  (36,969)
Proceeds from disposal of property, plant and equipment  2,484  4,706
Purchases of software and other intangible assets  (26,792)  (26,217)
Net increase in other non-current assets  (406)  (4,186)
Other  99  (29)
Net cash used in investing activities  (55,986)  (62,695)
     
Financing Activities:    
Net borrowings/(repayments) under bank lines of credit  75,544  (19,450)
Net increase/(decrease) in short-term borrowings  10  (6,588)
Proceeds from issuance of long-term borrowings  3,629  153,988
Repayments of long-term borrowings  (21,180)  (35,286)
Debt issuance costs  (999)  (2,153)
Repayments of capital lease obligations  (13,757)  (12,039)
Acquisitions of non-controlling interests  —   (13,196)
Distributions to non-controlling interests and other  (2,433)  (183)
Ordinary shares settled under share-based compensation plans  (3,042)  (1,800)
Proceeds from issuance of ordinary shares  1,671  1,803
Excess tax benefit from share-based compensation  9  430
Dividends paid  (6,223)  (6,165)
Net cash provided by financing activities  33,229  59,361
     
Effect of foreign exchange rate changes on cash and cash equivalents  (14,538)  (6,102)
Net (decrease)/increase in cash and cash equivalents  (94,768)  12,235
Cash and cash equivalents at beginning of period  321,761  326,795
     
Cash and cash equivalents at end of period $226,993 $339,030
         
         
UTi Worldwide Inc.        
Segment Reporting        
(in thousands)        
(Unaudited)        
         
  Three months ended October 31, 2012
         
  Freight
Forwarding
Contract Logistics
and Distribution

Corporate

Total
         
Revenues $738,136 $390,730 $ — $1,128,866
         
Purchased transportation costs 558,543 166,721 725,264
Staff costs 102,476 109,166 7,413 219,055
Depreciation  3,858 7,463 933 12,254
Amortization of intangible assets 1,006 1,428 540 2,974
Severance and other 833 6,547 1,717 9,097
Other operating expenses 46,302 86,321 4,919 137,542
Total operating expenses 713,018 377,646 15,522 1,106,186
         
Operating income/(loss) $25,118 $13,084  $ (15,522) 22,680
Interest expense, net        (2,225)
Other expense, net        (208)
Pretax income       20,247
Provision for income taxes       7,378
Net income       12,869
Net income attributable to non-controlling interests       2,321
Net income attributable to UTi Worldwide Inc.       $10,548
         
         
UTi Worldwide Inc.        
Segment Reporting        
(in thousands)        
(Unaudited)        
         
  Three months ended October 31, 2011
         
  Freight
Forwarding
Contract Logistics
and Distribution

Corporate

Total
         
Revenues $859,855 $404,681 $ — $1,264,536
         
Purchased transportation costs 658,436 162,725 821,161
Staff costs 110,609 120,614 7,645 238,868
Depreciation  4,287 7,465 452 12,204
Amortization of intangible assets 1,051 2,279 540 3,870
Severance and other 909 675 71 1,655
Other operating expenses 47,350 86,498 4,649 138,497
Total operating expenses 822,642 380,256 13,357 1,216,255
         
Operating income/(loss) $37,213 $24,425  $ (13,357) 48,281
Interest expense, net        (3,323)
Other expense, net        (677)
Pretax income       44,281
Provision for income taxes       13,971
Net income       30,310
Net income attributable to non-controlling interests       1,774
Net income attributable to UTi Worldwide Inc.       $28,536
         
         
UTi Worldwide Inc.        
Segment Reporting        
(in thousands)        
(Unaudited)        
         
  Nine months ended October 31, 2012
         
  Freight
Forwarding
Contract Logistics
and Distribution

Corporate

Total
         
Revenues $2,269,917 $1,163,020 $ — $3,432,937
         
Purchased transportation costs 1,727,281 490,216 2,217,497
Staff costs 316,510 333,858 25,205 675,573
Depreciation  12,108 20,863 2,008 34,979
Amortization of intangible assets 3,077 4,679 1,620 9,376
Severance and other 3,009 7,656 2,256 12,921
Other operating expenses 137,327 252,356 13,658 403,341
Total operating expenses 2,199,312 1,109,628 44,747 3,353,687
         
Operating income/(loss) $70,605 $53,392  $ (44,747) 79,250
Interest expense, net        (7,527)
Other expense, net        (508)
Pretax income       71,215
Provision for income taxes       23,899
Net income       47,316
Net income attributable to non-controlling interests       4,999
Net income attributable to UTi Worldwide Inc.       $42,317
         
         
UTi Worldwide Inc.        
Segment Reporting        
(in thousands)        
(Unaudited)        
         
  Nine months ended October 31, 2011
         
  Freight
Forwarding
Contract Logistics
and Distribution

Corporate

Total
         
Revenues $2,591,360 $1,169,239 $ — $3,760,599
         
Purchased transportation costs 1,998,348 464,903 2,463,251
Staff costs 334,876 359,564 20,908 715,348
Depreciation  13,115 21,511 1,811 36,437
Amortization of intangible assets 3,262 6,956 1,880 12,098
Severance and other 5,006 4,163 818 9,987
Other operating expenses 147,000 255,320 14,343 416,663
Total operating expenses 2,501,607 1,112,417 39,760 3,653,784
         
Operating income/(loss) $89,753 $56,822  $ (39,760) 106,815
Interest expense, net        (11,414)
Other expense, net        (278)
Pretax income       95,123
Provision for income taxes       29,465
Net income       65,658
Net income attributable to non-controlling interests       5,506
Net income attributable to UTi Worldwide Inc.       $60,152
           
           
UTi Worldwide Inc.          
Geographic Reporting          
(in thousands)          
(Unaudited)          
             
  Three months ended October 31, 2012 
             
  Freight
Forwarding
Revenue
Contract Logistics
and Distribution
Revenue
Freight
Forwarding
Net Revenue
Contract Logistics
and Distribution
Net Revenue
Operating
(Loss)/
Income
Severance
and
Other
             
EMENA  $214,715 $55,467 $57,300 $31,818  $ (1,363) $983
Americas  189,119 213,631 46,239 95,605 10,435 1,083
Asia Pacific  217,098 18,928 47,350 12,564 7,200 5,238
Africa  117,204 102,704 28,704 84,022 21,930 76
Corporate   —  —  —  —  (15,522) 1,717
Total  $738,136 $390,730 $179,593 $224,009 $22,680 $9,097
             
  Three months ended October 31, 2011 
             
  Freight
Forwarding
Revenue
Contract Logistics
and Distribution
Revenue
Freight
Forwarding
Net Revenue
Contract Logistics
and Distribution
Net Revenue
Operating
Income/
(Loss)
Severance
and
Other
             
EMENA  $256,160 $54,690 $66,424 $38,217 $2,441 $1,229
Americas  195,407 227,441 48,525 105,429 14,501 208
Asia Pacific  277,047 16,416 56,907 10,418 20,061  —
Africa  131,241 106,134 29,563 87,892 24,635 147
Corporate   —  —  —  —  (13,357) 71
Total  $859,855 $404,681 $201,419 $241,956 $48,281 $1,655
             
             
UTi Worldwide Inc.          
Geographic Reporting          
(in thousands)          
(Unaudited)          
             
  Nine months ended October 31, 2012 
             
  Freight
Forwarding
Revenue
Contract Logistics
and Distribution
Revenue
Freight
Forwarding
Net Revenue
Contract Logistics
and Distribution
Net Revenue
Operating
Income/
(Loss)
Severance
and
Other
             
EMENA  $695,566 $178,503 $176,485 $103,495 $567 $3,212
Americas  570,992 615,362 141,270 274,479 26,704 2,007
Asia Pacific  654,209 54,436 143,086 35,718 31,358 5,313
Africa  349,150 314,719 81,795 259,112 65,368 133
Corporate   —  —  —  —  (44,747) 2,256
Total  $2,269,917 $1,163,020 $542,636 $672,804 $79,250 $12,921
             
  Nine months ended October 31, 2011 
             
  Freight
Forwarding
Revenue
Contract Logistics
and Distribution
Revenue
Freight
Forwarding
Net Revenue
Contract Logistics
and Distribution
Net Revenue
Operating
(Loss)/
Income
Severance
and
Other
             
EMENA  $808,050 $169,756 $201,492 $115,052 $1,596 $7,216
Americas  574,877 647,313 144,912 306,781 30,177 1,558
Asia Pacific  825,159 46,006 162,595 29,330 52,765 248
Africa  383,274 306,164 84,013 253,173 62,037 147
Corporate   —  —  —  —  (39,760) 818
Total  $2,591,360 $1,169,239 $593,012 $704,336 $106,815 $9,987
 
 
UTi Worldwide Inc. 
Supplemental Financial Information – Reconciliation to US GAAP
(in thousands, except per share amounts)
(Unaudited)
  Three months ended 
October 31, 2012 
Three months ended
October 31, 2011 
     
GAAP Revenues $1,128,866 $1,264,536
Less: Purchased transportation costs  (725,264)  (821,161)
Net Revenues $403,602 $443,375
     
GAAP Operating expenses $1,106,186 $1,216,255
Less: Purchased transportation costs  (725,264)  (821,161)
Operating expenses less purchased transportation costs   380,922  395,094
Severance and other (1)(2)  (9,097)  (1,655)
Non-GAAP Operating expenses $371,825 $393,439
     
GAAP Operating income $22,680 $48,281
Severance and other (1)(2) 9,097 1,655
Non-GAAP Operating income $31,777 $49,936
     
Percent of Net Revenues 7.9% 11.3%
     
GAAP Pretax income $20,247 $44,281
Severance and other (1)(2) 9,097 1,655
Non-GAAP Pretax income $29,344 $45,936
     
GAAP Provision for income taxes $7,378 $13,971
Severance and other (1)(2) 3,315 522
Non-GAAP Provision for income taxes $10,693 $14,493
     
GAAP Net income attributable to UTi Worldwide Inc. $10,548 $28,536
Adjustment for:    
Severance and other (1)(2) 9,097 1,655
Income tax severance and other (3)  (3,315)  (522)
Non-GAAP Net income attributable to UTi Worldwide Inc. $16,330 $29,669
     
GAAP Diluted earnings per common share $0.10 $0.28
Adjustment for:    
Severance and other (1)(2) 0.09 0.02
Income tax severance and other (3)  (0.03)  (0.01)
Non-GAAP Diluted earnings per common share $0.16 $0.29
 
(1)  During the three months ended October 31, 2012, the company recorded pre-tax severance of $3,884 primarily related to transformation activities and accrued pre-tax expenses of $5,213 relating to a legal judgment.
(2)  During the three months ended October 31, 2011, the company recorded pre-tax severance of $1,655 primarily related to transformation activities.
(3)  The provisions for income tax adjustment related to the severance and other costs were calculated based on the prevailing tax rate in each jurisdiction. 
     
     
UTi Worldwide Inc. 
Supplemental Financial Information – Reconciliation to US GAAP
(in thousands, except per share amounts)
(Unaudited)
   Nine months ended
October 31, 2012 
Nine months ended 
October 31, 2011 
     
GAAP Revenues $3,432,937 $3,760,599
Less: Purchased transportation costs  (2,217,497)  (2,463,251)
Net Revenues $1,215,440 $1,297,348
     
GAAP Operating expenses $3,353,687 $3,653,784
Less: Purchased transportation costs  (2,217,497)  (2,463,251)
Operating expenses less purchased transportation costs   1,136,190  1,190,533
Severance and other (4)(5)  (12,921)  (9,987)
Non-GAAP Operating expenses $1,123,269 $1,180,546
     
GAAP Operating income $79,250 $106,815
Severance and other (4)(5) 12,921 9,987
Non-GAAP Operating income $92,171 $116,802
     
Percent of Net Revenues 7.6% 9.0%
     
GAAP Pretax income $71,215 $95,123
Severance and other (4)(5) 12,921 9,987
Non-GAAP Pretax income $84,136 $105,110
     
GAAP Provision for income taxes $23,899 $29,465
Severance and other (4)(5) 4,336 3,094
Non-GAAP Provision for income taxes $28,235 $32,559
     
GAAP Net income attributable to UTi Worldwide Inc. $42,317 $60,152
Adjustment for:    
Severance and other (4)(5) 12,921 9,987
Income tax severance and other (6)  (4,336)  (3,094)
Non-GAAP Net income attributable to UTi Worldwide Inc. $50,902 $67,045
     
GAAP Diluted earnings per common share $0.41 $0.58
Adjustment for:    
Severance and other (4)(5)  0.12  0.10
Income tax severance and other (6)  (0.04)  (0.03)
Non-GAAP Diluted earnings per common share $0.49 $0.65
     
(4)  During the nine months ended October 31, 2012, the company recorded pre-tax severance of $7,708 primarily related to transformation activities and pre-tax accrued expenses of $5,213 relating to a legal judgment.
(5)  During the nine months ended October 31, 2011, the company recorded pre-tax severance and other charges totaling $9,987, which were comprised of $8,073 in severance costs related to transformation activities and $1,914 in severance and facility exit costs associated with the closure of certain underutilized contract logistics facilities in Europe. 
(6)  The provisions for income tax adjustment related to the severance and other costs were calculated based on the prevailing tax rate in each jurisdiction. 
 
 
UTi Worldwide Inc.
Organic Growth Reconciliation
 (Unaudited)
           
Set forth below is a reconciliation of the company's organic growth rates and the growth rates based on the company's GAAP reported results in the company's revenues, net revenues and operating expenses less purchased transportation costs for the three months ended October 31, 2012. Organic growth is a non-GAAP measure that excludes the impact of foreign currency translation.
           
Three months ended October 31, 2012:          
  Total
Net
Change
+/(-)
Currency
Impact

Organic
Growth
+/(-)
Non-GAAP
Items (7)(8)
Adjusted
Organic
Growth
           
Revenues  (11)% 4% (7)% —% (7)%
Net revenues  (9)% 5% (4)% —% (4)%
Operating expenses less purchased transportation costs  (4)% 5% 1% (2)% (1)%
           
(7)  During the three months ended October 31, 2012, the company recorded pre-tax severance of $3,884 primarily related to transformation activities and pre-tax accrued expenses of $5,213 relating to a legal judgment. 
(8)  During the three months ended October 31, 2011, the company recorded pre-tax severance of $1,655 primarily related to transformation activities. 
           
           
UTi Worldwide Inc.
Organic Growth Reconciliation
 (Unaudited)
           
Set forth below is a reconciliation of the company's organic growth rates and the growth rates based on the company's GAAP reported results in the company's revenues, net revenues and operating expenses less purchased transportation costs for the nine months ended October 31, 2012. Organic growth is a non-GAAP measure that excludes the impact of foreign currency translation.
           
Nine months ended October 31, 2012:          
  Total
Net
Change
+/(-)
Currency
Impact

Organic
Growth
+/(-)
Non-GAAP
Items (9)(10)
Adjusted
Organic
Growth
           
Revenues  (9)% 5% (4)% —% (4)%
Net revenues  (6)% 6% 0% —% 0%
Operating expenses less purchased transportation costs  (5)% 6% 1% —% 1%
           
(9)  During the nine months ended October 31, 2012, the company recorded pre-tax severance of $7,708 primarily related to transformation activities and pre-tax accrued expenses of $5,213 relating to a legal judgment. 
(10) During the nine months ended October 31, 2011, the company recorded pre-tax severance and other charges totaling $9,987, which were comprised of $8,073 in severance costs related to transformation activities and $1,914 in severance and facility exit costs associated with the closure of certain underutilized contract logistics facilities in Europe. 
Jeff Misakian
Global Vice President, Investor Relations
(562) 552-9417