RANCHO DOMINGUEZ, Calif., June 10, 2003 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported strong gains in gross and net revenues, operating income and net income for the three-month period ended April 30, 2003.
Gross revenues increased 39 percent to $326.8 million in the fiscal 2004 first quarter, from $235.7 million in the corresponding period a year ago. Net revenues advanced 71 percent to $131.4 million from $76.9 million in the first quarter last fiscal year. Standard Corporation, which was acquired effective October 1, 2002, contributed $35.1 million to both gross and net revenues during the current first quarter.
"The first quarter of fiscal 2004 saw continued solid revenue gains over corresponding prior-year levels across all service categories," said Roger I. MacFarlane, chief executive officer of UTi Worldwide. "In the midst of the continuing difficult global economic environment, particularly in Europe and the U.S., UTi's airfreight forwarding operations recorded a 31 percent increase in net revenues from a year ago, primarily driven by volume growth in our Asia Pacific region. Our contract logistics service benefited from the addition of Standard, growing to $43.4 million from $6.7 million a year ago and contributing 33 percent of consolidated net revenues. Ocean freight net revenues improved 8 percent. Net revenues for customs brokerage grew 6 percent compared with last year, despite the negative impact of the weaker U.S. dollar in certain markets where revenues are tied to the value of imported goods."
UTi's global network achieved revenue gains in all geographic regions over the prior-year period. The Americas, led by the Standard acquisition, achieved a 164 percent increase in net revenues from a year ago. Asia Pacific recorded a 29 percent increase in net revenues. Europe and Africa posted first quarter net revenue increases of 26 percent and 48 percent, respectively, largely reflecting local currency translation into the weaker U.S. dollar.
Operating income grew 40 percent to $11.1 million in the fiscal 2004 first quarter from $7.9 million a year ago. Operating income as a percentage of net revenues equaled 8.4 percent in the fiscal 2004 first quarter, compared with 10.3 percent in the fiscal 2003 first quarter. Operating margin in the current first quarter was reduced by the inclusion of Standard Corporation, which operates at lower margins than other UTi operations, and the residual impact during the fiscal 2004 first quarter of a reorganization of UTi's roadfreight forwarding business in Sweden and Ireland effected in the fourth quarter of fiscal 2003. In addition, the weaker U.S. dollar resulted in lower customs brokerage revenues in regions of the world where revenues are tied to the value of goods imported from the U.S. and dollar-linked countries, while operating expenses in those regions did not similarly decline.
Excluding the operating income of Standard, the company's operating profit ratio, equaled 9.6 percent in the fiscal 2004 first quarter, compared with 10.3 percent in the corresponding prior-year period. Management believes this metric is a key operating indicator to allow a better comparison of the company's current performance against its historical performance, and the attached schedule shows a reconciliation of this measure to UTi's operating income as presented in U.S. GAAP.
Net income for the fiscal 2004 first quarter rose 68 percent to $8.0 million, or $0.26 per diluted share, based on 31.2 million weighted average shares outstanding, compared with prior-year first quarter net income of $4.8 million, or $0.18 per diluted share, based on 25.8 million weighted average shares outstanding. UTi's follow-on offering of 4.6 million ordinary shares in December 2002 resulted in a higher weighted average number of shares outstanding for the current quarter compared with the corresponding period a year ago.
As of April 30, 2003, the company reported total cash and cash equivalents, net of bank lines of credit and short-term bank borrowings, of $117 million, compared with $126 million at January 31, 2003.
"UTi's improved revenues, operating income and net income this first quarter are the positive outcome of executing our plan during the first five quarters of our NextLeap growth strategy," MacFarlane said. "While the economic outlook remains difficult, our customers continue to reinforce their need for UTi's global integrated logistics solutions. Our commitment to continuing the investment in our sales and account management organization and strengthening its logistics skills reflects our confidence in UTi's competitive positioning."
About UTi Worldwide
UTi Worldwide Inc. is an international, non-asset based supply chain management company providing air and ocean freight forwarding, contract logistics, customs brokerage and other logistics-related services. The company serves a large and diverse base of global and local companies, including customers operating in industries with unique supply chain requirements such as the pharmaceutical, 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 optimize the operation of its customers' global supply chains.
Investor Conference Call
UTi management will host an investor conference call today, Tuesday, June 10, 2003, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company's financials and operations for the first quarter ended April 30, 2003. The call will be open to all interested investors through a live, listen-only audio Web broadcast via the Internet at www.go2uti.com and www.companyboardroom.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 10:00 a.m. PDT, Tuesday, June 10, through 5:00 p.m. PDT, Friday, June 13, by calling 800-633-8284 (domestic) or 402-977-9140 (international) and using Reservation No. 21145441.
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 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, 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
(in thousands, except share and per share amounts)
Three Months Ended
April 30,
2003 2002
(Unaudited)
Gross revenues:
Airfreight forwarding $159,081 $131,057
Ocean freight forwarding 74,322 62,948
Customs brokerage 15,034 13,997
Contract logistics 51,307 11,414
Other 27,044 16,242
Total gross revenues $326,788 $235,658
Net revenues:
Airfreight forwarding $ 44,930 $ 34,281
Ocean freight forwarding 16,058 14,828
Customs brokerage 14,265 13,416
Contract logistics 43,378 6,658
Other 12,788 7,746
Total net revenues 131,419 76,929
Staff costs 70,420 39,620
Depreciation and
Amortization 3,468 2,337
Amortization of
intangible assets 148 --
Other operating
Expenses 46,290 27,060
Operating income 11,093 7,912
Interest income/
(expense), net 136 (370)
Losses on foreign
Exchange (129) (371)
Pretax income 11,100 7,171
Income tax expense (2,684) (2,078)
Income before
minority interests 8,416 5,093
Minority interests (442) (336)
Net income $ 7,974 $ 4,757
Basic earnings per
ordinary share $ 0.26 $ 0.19
Diluted earnings per
ordinary share $ 0.26 $ 0.18
Number of weighted-average
shares outstanding used for
per share calculations:
Basic shares 30,156,469 25,260,212
Diluted shares 31,161,542 25,775,651
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
April 30, January 31,
2003 2003
(unaudited)
ASSETS
Cash and cash equivalents
(including restricted
cash of $4,000) $147,358 $168,125
Trade receivables, net 261,551 247,893
Deferred income
tax assets 5,309 1,592
Other current
Assets 31,031 30,492
Total current assets 445,249 448,102
Property, plant and
equipment, net 48,880 44,566
Goodwill and other
intangible assets,
net 124,493 125,641
Investments 651 847
Deferred income
tax assets 1,648 1,227
Other non-current
Assets 10,061 6,692
Total assets $630,982 $627,075
LIABILITIES & SHAREHOLDERS' EQUITY
Bank lines of credit $ 27,742 $ 33,458
Short-term borrowings 2,341 9,121
Current portion of
capital lease
obligations 2,584 2,539
Trade payables and
other accrued
liabilities 237,360 236,548
Income taxes payable 9,694 8,083
Deferred income tax
Liabilities 239 489
Total current
Liabilities 279,960 290,238
Long-term bank
Borrowings 122 199
Capital lease
Obligations 7,631 7,111
Deferred income tax
Liabilities 1,870 1,643
Retirement fund
Obligations 1,077 1,016
Minority interests 3,208 2,699
Commitments and contingencies
Shareholders' equity:
Common stock 311,500 311,161
Retained earnings 71,947 63,973
Accumulated other
comprehensive loss (46,333) (50,965)
Total shareholders'
Equity 337,114 324,169
Total liabilities
and shareholders'
equity $630,982 $627,075
UTi Worldwide Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended
April 30,
2003 2002
(unaudited)
OPERATING ACTIVITIES:
Net income $ 7,974 $ 4,757
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Stock compensation
Costs 45 45
Depreciation and
Amortization 3,468 2,337
Amortization of
intangible assets 148 --
Deferred income
Taxes 4 481
Gain on disposal of
property, plant
and equipment (47) (68)
Other 13 336
Changes in operating
assets and liabilities:
Increase in trade
receivables and
other current
assets (4,803) (3,207)
(Decrease)/increase
in trade
payables and
other accrued
liabilities (6,691) 4,270
Net cash provided
by operating
activities 111 8,951
INVESTING ACTIVITIES:
Purchases of property,
plant and equipment (4,862) (2,474)
Proceeds from disposal
of property, plant
and equipment 225 135
Increase in other
non-current assets (1,881) --
Acquisition of
subsidiaries and
contingent payments (622) (1,793)
Purchases of
marketable
securities -- (8)
Net cash used in
investing
activities (7,140) (4,140)
FINANCING ACTIVITIES:
Decrease in bank
lines of credit (5,716) (7,537)
Decrease in short-term
Borrowings (6,417) --
Long-term bank
borrowings - advanced 3 91
Long-term bank
borrowings - repaid (97) (867)
Capital lease
obligations - repaid (748) (468)
Decrease in minority
Interests -- (190)
Proceeds from issuance
of ordinary shares 295 231
Dividends paid -- (970)
Net cash used in
financing
activities (12,680) (9,710)
Net decrease in cash
and cash
equivalents (19,709) (4,899)
Cash and cash
equivalents at
beginning of
period 168,125 87,594
Effect of foreign
exchange rate
changes (1,058) 1,070
Cash and cash
equivalents at
end of period $147,358 $ 83,765
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three Months Ended April 30, 2003
(Unaudited)
Europe Americas Asia Africa Corporate Total
Pacific
Gross
revenue
from
external
customers $98,933 $103,114 $83,833 $40,908 $-- $326,788
Net
Revenue $27,484 $57,299 $19,111 $27,525 $-- $131,419
Staff
Costs 16,251 33,170 8,163 11,590 1,246 70,420
Depreciation
and
amortiza-
tion 1,041 980 512 662 273 3,468
Amortization
of
intangible
assets -- 148 -- -- -- 148
Other
operating
expenses 8,517 19,594 4,907 12,204 1,068 46,290
Operating
income/
(loss) $1,675 $3,407 $5,529 $3,069 $(2,587) 11,093
Interest
income,
net 136
Loss on
foreign
exchange (129)
Pretax
Income 11,100
Income tax
Expense (2,684)
Income before
minority
interests $8,416
Three Months Ended April 30, 2002
(Unaudited)
Europe Americas Asia Africa Corporate Total
Pacific
Gross
revenue
from
external
customers $79,238 $61,542 $65,154 $29,724 $-- $235,658
Net
Revenue $21,802 $21,708 $14,841 $18,578 $-- $76,929
Staff
Costs 11,386 13,249 6,637 7,389 959 39,620
Depreciation
and
amortiz-
ation 759 638 459 410 71 2,337
Other
operating
expenses 6,328 6,943 4,538 7,759 1,492 27,060
Operating
income/
(loss) $3,329 $878 $3,207 $3,020 $(2,522) 7,912
Interest
expense,
net (370)
Loss on
foreign
exchange (371)
Pretax
Income 7,171
Income
tax
expense (2,078)
Income before
minority
interests $5,093
UTi Worldwide Inc.
Reconciliation of Non-U.S. GAAP Measure to U.S. GAAP Measure
(in thousands)
Three Months Ended
April 30,
2003 2002
(Unaudited)
OPERATING PROFIT RATIO
Operating income,
per U.S. GAAP $ 11,093 $ 7,912
Less: Operating
income for Standard
Corporation, per
U.S. GAAP 1,890 --
Adjusted operating income $ 9,203 $ 7,912
Divided by:
Net revenue,
per U.S. GAAP $131,419 $ 76,929
Less: Net revenue for
Standard Corporation,
per U.S. GAAP 35,056 --
Adjusted net revenue $ 96,363 $ 76,929
Operating Profit Ratio,
a non- U.S. GAAP measure 9.6% 10.3%