RANCHO DOMINGUEZ, Calif., April 3, 2002 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported its results for the fiscal year and fourth quarter ended January 31, 2002.
For the fiscal 2002 year, UTi's gross revenues rose 3 percent to $889.8 million, compared with $863.3 million a year ago. Net revenues for the year totaled $304.6 million, compared with $301.8 million in fiscal 2001. The global economic slowdown, combined with weakening foreign exchange rates, particularly the South African rand, negatively impacted the U.S. dollar-reported revenues for the current fiscal year, compared with last year. On a constant currency basis using exchange rates in effect for the prior year, gross revenues would have been $953.3 million and net revenues would have been $334.9 million, improving 10 percent and 11 percent, respectively, over fiscal 2001.
Net income for fiscal 2002 totaled $19.2 million, or $0.75 per diluted share, compared with net income of $18.5 million, or $0.88 per diluted share, for fiscal 2001.
Net income for fiscal 2002 reflects an effective tax rate of 28 percent, contrasted to an effective tax rate of 24 percent for the prior year. In addition, the U.S. initial public offering of UTi ordinary shares in November 2000 resulted in a higher weighted average number of shares outstanding for the 2002 fiscal year when compared with the 2001 fiscal year. Fiscal 2001 reflects two non-cash items: a charge for compensation expense of $3.0 million related to final incentive plan distributions included in staff costs, and the recognition of a cumulative foreign exchange translation gain of $2.6 million arising from the liquidation of a non-operating subsidiary. Excluding these items, net income for fiscal 2001 totaled $18.8 million, or $0.89 per diluted share.
For fiscal year 2002, operating income increased 9 percent to $29.7 million from $27.2 million a year earlier, excluding the aforementioned $3.0 million of non-cash compensation expense for the 2001 fiscal year. The operating income margin, excluding the aforementioned non-cash compensation expense for fiscal 2001 and amortization of goodwill, improved by 110 basis points to 11.5 percent for fiscal 2002, compared with the prior year.
"Although our performance in 2002 was restrained by the world economic slowdown, we are pleased with our achievements in terms of cost control; operating income growth; integration of our Continental acquisition in Asia; completion of our January 2002 warehousing acquisition in Spain and Portugal; and the rollout of our five-year strategic growth plan. Last year also demonstrated the value of the geographic balance of our global operations," said Roger I. MacFarlane, UTi's chief executive officer.
"We are particularly pleased by the strong profit performance from our business in Africa despite the steep decline in the South African rand. In addition, our strategic efforts to grow UTi's Asia Pacific business have resulted in outstanding performance in that region, underscored by almost 20 percent growth in net revenues and 29 percent increase in operating income for the fourth quarter. Asia Pacific gains were achieved through organic growth as well as the successful integration of the Continental acquisition made during the third quarter of fiscal 2001. These achievements are particularly impressive in the face of a weak economy and reinforce our belief that UTi Worldwide is well positioned to capture additional market share in the Asia Pacific region," MacFarlane said.
"In January 2002, we significantly enhanced our depth of service as well as our global footprint with the acquisition of Grupo SLI, a warehousing and logistics services provider headquartered in Madrid, Spain. With this acquisition, UTi now has approximately 3 million square feet of warehouse space in Europe, and gained a progressive management team, led by Carlos and Jose-Maria Escario," said MacFarlane.
For the fiscal 2002 fourth quarter, UTi's gross revenues were $219.8 million, compared with $220.5 million in the corresponding year-earlier period. Net revenues for the quarter totaled $71.8 million, compared with $77.9 million in the same quarter of fiscal 2001. Fiscal 2002 fourth quarter gross and net revenues were constrained by weak global economic conditions and the steep decline in the South African rand that affected the company's U.S. dollar-reported financial results. On a constant currency basis using exchange rates in effect for the prior-year fourth quarter, gross revenues would have been $238.6 million and net revenues would have been $81.6 million, improving 8 percent and 5 percent, respectively, over the year-ago period.
Net income for the fiscal 2002 fourth quarter totaled $3.8 million, or $0.15 per diluted share, compared with net income of $6.5 million, or $0.26 per diluted share, for the fourth quarter of fiscal 2001. Net income for the fourth quarter of fiscal 2002 reflects an effective tax rate of 35 percent, contrasted to an effective tax rate of 17 percent for the comparable 2001period.
The prior-year fourth quarter net income includes $700,000 of the previously mentioned $3.0 million compensation expense and recognition of a cumulative foreign exchange translation gain of $2.6 million. Excluding these two items, both of which were non-cash, fiscal 2001 fourth quarter net income would have been $4.6 million, or $0.18 per diluted share.
Operating income increased 11 percent to $6.4 million in the current fourth quarter, from $5.8 million last year, excluding the non-cash charge for compensation expense of $700,000 described above for the prior-year fourth quarter. The operating income margin, also excluding the non-cash charge for compensation expense for the fiscal 2001 fourth quarter and amortization of goodwill, increased to 11 percent, a 100 basis point improvement over the prior-year period. "UTi Worldwide adjusted costs to match lower levels of business, producing higher operating profits in the face of a difficult operating climate after September 11. Nonetheless, higher taxes in the fourth quarter of fiscal 2002 offset these gains when compared with the fourth quarter last year. Cost management was critical in the Americas region where net revenues declined by 20 percent over the prior year quarter. We commend our Americas team for their dedicated efforts to align costs in the region, as well as maintaining high air and ocean yields," said MacFarlane.
"The global marketplace in the fourth quarter was full of challenges for our customers, our carriers and our employees. In this environment, our employees have done an extraordinary job of supporting our existing customers as well as pursuing opportunities for new business," said MacFarlane. "We are encouraged by signs of strengthening ocean freight business early in the first quarter of fiscal 2003. However, we are not yet seeing signs of sustained improvement in the airfreight business, particularly in the U.S. Therefore, we remain cautious and continue to manage costs in our operations."
As of January 31, 2002, UTi reported total cash and equivalents, net of bank lines of credit and short-term borrowings, of $55.0 million, after funding acquisitions and earn-out payments of $21.9 million. This compares with a balance of $54.2 million last year. "We generated $33.4 million in free cash flow for the fiscal year, reflecting a strong performance in working capital management in a tough economic environment," MacFarlane said.
In February 2002, the company announced the rollout across the global organization of its strategic growth plan for the next five years, entitled NextLeap. "Through the NextLeap initiative, UTi Worldwide plans to gain strategic customers through a solutions-based approach; accelerate our annual rate of net revenue growth; further strengthen operating margins; raise the skills of employees through increased training; and implement a new profit-based incentive program designed to drive higher performance," MacFarlane added. "We believe these platforms will push our company to new levels of achievement."
About UTi Worldwide
UTi Worldwide Inc. is a global, non-asset based supply chain management business providing logistics services and planning and optimization solutions. The company's services include freight forwarding, customs brokerage and warehousing services such as coordination of shipping and storage of raw materials, supplies, components and finished goods. Through its supply chain planning and optimization services, the company assists clients in designing and implementing systems that improve predictability and visibility and reduce the overall costs of their supply chains. The company has a global and diverse business customer base ranging from large multinational enterprises to smaller local businesses. For more information about the company visit its Web site at www.go2uti.com.
Investor Conference Call
UTi management will host an investor conference call today, Wednesday, April 3, 2002, at 7:00 a.m. PST (10:00 a.m. EST) to review the company's financials and operations for the fourth quarter and year-end periods and to discuss future outlook. The call will be open to all interested investors through a live, listen-only audio broadcast available over the Internet at www.go2uti.com and www.companyboardroom.com. For those who are not able to listen to the live broadcast, the call will be archived for two weeks through 6:00 p.m. PST, Wednesday, April 17, 2002 on both Web sites. A telephonic playback of the conference call also will be available during that same timeframe by calling 800-633-8284 (domestic) or 858-812-6440 (international) and using Reservation No. 20470610.
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 growth strategy and integration of acquisitions. Many important factors may cause the company's actual results to differ materially from those discussed in any such forward-looking statements, including increased competition; integration risks associated with acquisitions; the effects of changes in foreign exchange rates; changes in the company's effective tax rates; industry consolidation making it more difficult to compete against larger companies; general economic, political and market conditions, including those in Africa, Asia and Europe; risks of international operations; the success and effects of new strategies; disruptions caused by conflicts, wars and terrorism; and the other risks and uncertainties described in the company's filings with the Securities and Exchange Commission. Although UTi believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in forward-looking statements will be realized. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by UTi or any other person that UTi's objectives or plans will be achieved. The historical results achieved by the company are not necessarily indicative of its future prospects. UTi undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
UTi Worldwide Inc.
Condensed Consolidated Income Statements
(Prepared in Accordance with U.S. Generally Accepted Accounting
Principles)
(US$000s, except share and per share amounts)
Three Months Ended Twelve Months Ended
January 31, January 31,
2002 2001 2002 2001
---------- ---------- ---------- ----------
(Unaudited)
Gross revenue:
Airfreight
forwarding $ 123,552 $ 119,934 $ 491,946 $ 474,213
Ocean freight
forwarding 62,554 67,819 255,272 254,054
Customs brokerage 12,981 11,911 55,875 58,104
Other 20,705 20,844 86,693 76,888
---------- ---------- ---------- ----------
Total gross
revenue $ 219,792 $ 220,508 $ 889,786 $ 863,259
========== ========== ========== ==========
Net revenue:
Airfreight
forwarding $ 31,908 $ 38,847 $ 142,312 $ 145,594
Ocean freight
forwarding 15,247 15,470 58,633 54,461
Customs
brokerage 12,472 11,779 54,034 55,295
Other 12,146 11,832 49,580 46,496
---------- ---------- ---------- ----------
Total net
revenue 71,773 77,928 304,559 301,846
---------- ---------- ---------- ----------
Staff costs 37,141 39,022 156,005 154,426
Depreciation 2,418 2,344 9,411 9,060
Amortization of
goodwill 1,174 1,106 5,339 4,306
Other operating
expenses 24,635 30,373 104,134 109,846
---------- ---------- ---------- ----------
Operating income 6,405 5,083 29,670 24,208
Interest (expense)
income, net (261) 295 (1,210) (2,221)
Gains on foreign
exchange 477 2,766 17 3,636
---------- ---------- ---------- ----------
Pretax income 6,621 8,144 28,477 25,623
Income tax expense (2,294) (1,377) (7,970) (6,208)
---------- ---------- ---------- ----------
Income before
minority interests 4,327 6,767 20,507 19,415
Minority interests (529) (257) (1,349) (962)
---------- ---------- ---------- ----------
Net income(a) $ 3,798 $ 6,510 $ 19,158 $ 18,453
========== ========== ========== ==========
Basic earnings per
ordinary share $ 0.15 $ 0.26 $ 0.76 $ 0.95
Diluted earnings
per ordinary
share(a) $ 0.15 $ 0.26 $ 0.75 $ 0.88
Number of
weighted-average
shares
outstanding used
for per share
calculations:
Basic shares 25,244,989 24,742,368 25,233,394 19,345,036
Diluted shares 25,531,846 25,434,354 25,501,864 21,053,432
(a) For the three months ended January 31, 2001, amount includes a
$1.9 million, or $0.08 per diluted share, net gain from special
items; and for the fiscal year ended January 31, 2001, a net
expense related to special items of $335,000, or $0.01 per
diluted share.
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(Prepared in Accordance with U. S. Generally Accepted
Accounting Principles)
(US$000s)
As of January 31,
2002 2001
---------------------------
ASSETS
Cash and cash equivalents $ 87,594 $ 98,372
Trade receivables, net 180,866 212,860
Other current assets 23,518 23,551
--------- ---------
Total current assets 291,978 334,783
Property, plant and
equipment, net 31,185 34,952
Goodwill, net 76,611 68,043
Investments 215 209
Deferred income tax assets 1,431 1,469
Other non-current assets 3,191 4,297
--------- ---------
Total assets $ 404,611 $ 443,753
========= =========
LIABILITIES & SHAREHOLDERS'
EQUITY
Bank lines of credit $ 21,062 $ 32,609
Short-term borrowings 11,518 11,570
Current portion of capital
lease obligations 1,780 2,307
Trade payables and other
accrued liabilities 173,113 188,902
Income taxes payable 4,743 3,747
Deferred income tax
liabilities 842 213
--------- ---------
Total current liabilities 213,058 239,348
Long-term bank borrowings 1,192 3,159
Capital lease obligations 5,726 8,672
Deferred income tax
liabilities 1,566 2,377
Pension obligations 693 682
--------- ---------
Total long-term
liabilities 9,177 14,890
Minority interests 2,522 2,027
Commitments and
contingencies
Shareholders' equity:
Common stock 207,143 206,626
Retained earnings 36,608 19,376
Accumulated other
comprehensive loss (63,897) (38,514)
--------- ---------
Total shareholders'
equity 179,854 187,488
--------- ---------
Total liabilities and
shareholders' equity $ 404,611 $ 443,753
========= =========
UTi Worldwide Inc.
Consolidated Statements of Cash Flows
(Prepared in Accordance with U.S. Generally Accepted
Accounting Principles)
(US$000s)
For the Year Ended
January 31,
2002 2001
------------------------
OPERATING ACTIVITIES:
Net income $ 19,158 $ 18,453
Adjustments to reconcile net
income to net cash provided
by operating activities:
Stock compensation costs 300 3,844
Depreciation 9,411 9,060
Amortization of goodwill 5,339 4,306
Deferred income taxes 1,295 941
Gain on disposal of property,
plant and equipment (187) (236)
Loss on disposal of other
investments -- 362
Other 1,326 328
Changes in operating assets
and liabilities:
Decrease/(increase) in
trade receivables and
other current assets 23,273 (61,669)
(Decrease)/increase in
trade payables and other
accrued liabilities (16,829) 57,265
-------- --------
Net cash provided by
operating activities 43,086 32,654
-------- --------
INVESTING ACTIVITIES:
Purchases of property, plant
and equipment (8,711) (10,121)
Proceeds from disposal of
property, plant and equipment 912 887
Proceeds from disposal of
other investments 63 664
Acquisition of subsidiaries
and contingent payments (21,868) (31,202)
Purchases of marketable
securities (83) (262)
Other -- (240)
-------- --------
Net cash used in investing
activities (29,687) (40,274)
-------- --------
FINANCING ACTIVITIES:
(Decrease)/increase in bank
lines of credit (14,225) 12,451
Increase in short-term
borrowings 168 9,437
Long-term bank borrowings
-- advanced 116 2,988
Long-term bank borrowings
-- repaid (72) (181)
Capital lease obligations
-- repaid (1,985) (2,049)
Decrease in minority
interests (532) --
Proceeds from issuance of
ordinary shares 217 72,795
Dividends paid (1,926) (3,118)
-------- --------
Net cash (used in)/provided
by financing activities (18,239) 92,323
-------- --------
Net (decrease)/increase in
cash and cash equivalents (4,840) 84,703
Cash and cash equivalents at
beginning of period 98,372 20,760
Effect of foreign exchange
rate changes (5,938) (7,091)
-------- --------
Cash and cash equivalents at
end of period $ 87,594 $ 98,372
======== ========
UTi Worldwide Inc.
Segment Reporting
(Prepared in Accordance with U.S. Generally Accepted
Accounting Principles)
(US$000s)
Three Months Ended January 31, 2002
(Unaudited)
-----------------------------------
Europe Americas Asia Pacific
--------- --------- ---------
Gross revenue from
external customers $ 68,942 $ 58,201 $ 64,924
========= ========= =========
Net revenue $ 16,269 $ 21,438 $ 14,926
Staff costs 9,637 12,702 6,718
Depreciation 776 560 562
Amortization of goodwill 49 611 461
Other operating expenses 3,813 7,270 4,491
--------- --------- ---------
Operating income $ 1,994 $ 295 $ 2,694
========= ========= =========
Africa Corporate Total
--------- --------- ---------
Gross revenue from
external customers $ 27,725 $ -- $ 219,792
========= ========= =========
Net revenue $ 19,140 $ -- $ 71,773
Staff costs 7,097 987 37,141
Depreciation 429 91 2,418
Amortization of goodwill 53 -- 1,174
Other operating expenses 7,987 1,074 24,635
--------- --------- ---------
Operating income $ 3,574 $ (2,152) 6,405
========= =========
Interest expense, net (261)
Gains on foreign exchange 477
---------
Pretax income 6,621
Income tax expense (2,294)
---------
Income before minority
interests $ 4,327
=========
Three Months Ended January 31, 2001
(Unaudited)
Europe Americas Asia Pacific
-------- -------- --------
Gross revenue from
external customers $ 57,404 $ 79,425 $ 57,301
======== ======== ========
Net revenue $ 16,345 $ 26,826 $ 12,492
Staff costs 8,662 14,461 6,570
Depreciation 721 516 326
Amortization of goodwill 101 451 455
Other operating expenses 5,316 9,532 3,052
-------- -------- --------
Operating income $ 1,545 $ 1,866 $ 2,089
======== ======== ========
Africa Corporate Total
-------- -------- --------
Gross revenue from
external customers $ 26,378 $ -- $220,508
======== ======== ========
Net revenue $ 22,265 $ -- $ 77,928
Staff costs 7,652 1,677 39,022
Depreciation 909 (128) 2,344
Amortization of goodwill 99 -- 1,106
Other operating expenses 11,981 492 30,373
-------- -------- --------
Operating income $ 1,624 $ (2,041) 5,083
======== ========
Interest income, net 295
Gains on foreign exchange 2,766
--------
Pretax income 8,144
Income tax expense (1,377)
--------
Income before minority
interests $ 6,767
========
UTi Worldwide Inc.
Segment Reporting
(Prepared in Accordance with U.S. Generally Accepted
Accounting Principles)
(US$000s)
Twelve Months Ended January 31, 2002
Europe Americas Asia Pacific
----------------------------------
Gross revenue from
external customers $ 264,280 $ 258,008 $ 242,950
========= ========= =========
Net revenue $ 62,457 $ 94,045 $ 60,075
Staff costs 35,632 56,614 26,238
Depreciation 2,571 2,462 1,775
Amortization of goodwill 531 3,096 1,432
Other operating expenses 16,262 29,859 18,098
--------- --------- ---------
Operating income $ 7,461 $ 2,014 $ 12,532
========= ========= =========
Africa Corporate Total
----------------------------------
Gross revenue from
external customers $ 124,548 $ -- $ 889,786
========= ========= =========
Net revenue $ 87,982 $ -- $ 304,559
Staff costs 33,373 4,148 156,005
Depreciation 2,264 339 9,411
Amortization of goodwill 280 -- 5,339
Other operating expenses 38,860 1,055 104,134
--------- --------- ---------
Operating income $ 13,205 $ (5,542) 29,670
========= ========= =========
Interest expense, net (1,210)
Gains on foreign exchange 17
---------
Pretax income 28,477
Income tax expense (7,970)
---------
Income before minority interests $ 20,507
=========
Twelve Months Ended January 31, 2001
Europe Americas Asia Pacific
----------------------------------
Gross revenue from
external customers $ 266,560 $ 293,150 $ 179,286
========= ========= =========
Net revenue $ 62,702 $ 100,577 $ 42,992
Staff costs 33,024 58,548 19,929
Depreciation 2,525 2,119 1,060
Amortization of goodwill 564 2,516 879
Other operating expenses 19,882 32,982 12,188
--------- --------- ---------
Operating income $ 6,707 $ 4,412 $ 8,936
========= ========= =========
Africa Corporate Total
----------------------------------
Gross revenue from
external customers $ 124,263 $ -- $ 863,259
========= ========= =========
Net revenue $ 95,575 $ -- $ 301,846
Staff costs 40,315 2,610 154,426
Depreciation 3,292 64 9,060
Amortization of goodwill 347 -- 4,306
Other operating expenses 44,279 515 109,846
--------- --------- ---------
Operating income $ 7,342 $ (3,189) 24,208
========= ========= =========
Interest expense, net (2,221)
Gains on foreign exchange 3,636
---------
Pretax income 25,623
Income tax expense (6,208)
---------
Income before minority interests $ 19,415
=========