RANCHO DOMINGUEZ, Calif., Sept. 8, 2005 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported record levels of quarterly gross and net revenues, operating income, net income and earnings per share for the three months ended July 31, 2005.
Gross revenues increased 27 percent to $686.2 million for the second quarter of fiscal 2006 from $540.4 million in the corresponding prior-year period. Net revenues for the 2006 second fiscal quarter increased 28 percent to $238.3 million from $186.5 million in the fiscal 2005 second quarter. The increases in gross and net revenues were driven principally by strong levels of organic growth across all regions and service lines.
Operating income for the second quarter of fiscal 2006 increased 43 percent to $33.6 million from $23.5 million in the comparable prior-year period. Operating income as a percentage of net revenues continued to show improvement, reaching 14.1 percent in the fiscal 2006 second quarter, compared with 12.6 percent in the prior-year second quarter.
Net income for the fiscal 2006 second quarter grew 38 percent to $22.3 million, or $0.69 per diluted share, compared with $16.2 million, or $0.51 per diluted share, for the prior-year second quarter.
"We continue to see positive market reception to NextLeap's goal of global integrated logistics, particularly as evidenced by the greater than 50 percent growth in our contract logistics net revenue in the current quarter, compared with the second quarter a year ago," said Roger I. MacFarlane, chief executive officer of UTi Worldwide. "In addition, the improvement in operating performance in our freight forwarding services during the 2006 second quarter reflects the benefits of increased network density through our global platform as we handled more shipments for new and existing customers.
"As we move toward the final stages of our NextLeap journey, which began in February 2002, we believe we are on track to complete the transformation of UTi into a company capable of providing a total outsourced solution in global integrated logistics. We have now begun the process of developing our next long-term plan, which will seek to capitalize on the foundation that NextLeap has created in order to deliver even greater competitive advantage and value to each of our customer's supply chain," MacFarlane said.
Airfreight forwarding net revenues grew 18 percent in the fiscal 2006 second quarter over the prior-year second quarter. Ocean freight volumes also grew during the 2006 second quarter, delivering an increase of 17 percent in ocean freight forwarding net revenues during the second quarter of fiscal 2006, compared with the fiscal 2005 second quarter. Contract logistics net revenues improved 53 percent during the fiscal 2006 second quarter, compared with the prior-year period, driven by new customers and the contribution from Canada-based Unigistix, Inc., which UTi acquired in October 2004. As fuel prices and surcharges continue to rise and are passed through to our customers as part of gross revenues, this will constrain improvement in our airfreight and ocean freight yields.
"We are pleased with the global balance of profitability during the quarter across our geographic regions," MacFarlane said. "Each region produced greater than 15 percent organic growth in net revenues and delivered operating income margin improvement in the 2006 second quarter, compared with the prior-year second quarter."
For the six-month period ended July 31, 2005, gross revenues increased 28 percent to $1.3 billion from $1.0 billion for the same period a year ago. Net revenues for the first half of fiscal 2006 rose 29 percent to $459.5 million, up from $356.5 million in the comparable prior-year period. Operating income for the current six-month period totaled $60.6 million, up 43 percent from $42.2 million in the first six months of the comparable prior-year period. Operating income as a percentage of net revenues rose to 13.2 percent in the six-month period ended July 31, 2005, compared with 11.8 percent during the comparable period a year ago. Net income for the six-month period ended July 31, 2005 increased 38 percent to $40.1 million, or $1.23 per diluted share, from $29.0 million, or $0.91 per diluted share, in the corresponding period a year ago.
Investor Conference Call
UTi management will host an investor conference call today, September 8, 2005, at 9:00 a.m. PDT (12:00 noon EDT) to review the company's financials and operations for the fiscal 2006 second quarter ended July 31, 2005. 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.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 5:00 p.m. PDT, Friday, September 9, by calling 888-286-8010 (domestic) or 617-801-6888 (international) and using Reservation No. 69569497.
About UTi Worldwide
UTi Worldwide Inc. is an international, non-asset based global integrated logistics company providing air and ocean freight forwarding, contract logistics, customs brokerage and other supply chain management 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 deliver competitive advantage to each of its customers' global supply chains.
Safe Harbor Statement
Certain statements in this news release may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The company intends that all such statements be subject to the "safe-harbor" provisions contained in those sections. Such statements may include, but are not limited to, the company's discussion of its ability to meet customers' needs; its role as a primary logistics partner and outsourced solution for global integrated logistics; its NextLeap initiatives and strategic operating plan, its global platform or network, operating performance and delivery of value to customers; the company's focus on specialized industry solutions, its growth strategy and the contributions 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 a challenging operating environment; increased competition; the effects of increasing fuel prices, 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 Six months ended July 31, July 31, ------------------------- ------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ (Unaudited) Gross revenues: Airfreight forwarding $ 300,786 $ 243,443 $ 579,066 $ 471,434 Ocean freight forwarding 201,988 159,702 388,623 296,775 Customs brokerage 20,136 18,273 40,444 36,854 Contract logistics 110,172 76,832 204,758 146,160 Other 53,150 42,109 103,534 78,764 ------------ ------------ ------------ ------------ Total gross revenues $ 686,232 $ 540,359 $ 1,316,425 $ 1,029,987 ============ ============ ============ ============ Net revenues: Airfreight forwarding $ 71,946 $ 61,090 $ 142,475 $ 117,853 Ocean freight forwarding 29,288 24,977 54,872 46,208 Customs brokerage 19,439 17,824 39,002 35,737 Contract logistics 92,842 60,664 171,622 117,005 Other 24,750 21,948 51,492 39,689 ------------ ------------ ------------ ------------ Total net revenues 238,265 186,503 459,463 356,492 Staff costs 125,526 95,332 241,297 187,264 Depreciation and amortization 5,619 4,625 11,323 8,525 Amortization of intangible assets 982 249 2,124 430 Other operating expenses 72,490 62,767 144,144 118,058 ------------ ------------ ------------ ------------ Operating income 33,648 23,530 60,575 42,215 Interest (expense)/ income, net (695) 126 (1,418) 299 Losses on foreign exchange (536) (123) (462) (23) ------------ ------------ ------------ ------------ Pretax income 32,417 23,533 58,695 42,491 Provision for income taxes 9,355 6,877 16,931 12,422 ------------ ------------ ------------ ------------ Income before minority interests 23,062 16,656 41,764 30,069 Minority interests (719) (442) (1,652) (1,062) ------------ ------------ ------------ ------------ Net income $ 22,343 $ 16,214 $ 40,112 $ 29,007 ============ ============ ============ ============ Basic earnings per share $ 0.71 $ 0.53 $ 1.29 $ 0.95 Diluted earnings per share $ 0.69 $ 0.51 $ 1.23 $ 0.91 Number of weighted- average shares outstanding used for per share calculations: Basic shares 31,254,963 30,666,608 31,132,762 30,651,537 Diluted shares 32,591,246 32,097,535 32,561,061 32,040,727 UTi Worldwide Inc. Condensed Consolidated Balance Sheets (in thousands) July 31, January 31, 2005 2005 ----------- ----------- (Unaudited) ASSETS Cash and cash equivalents $ 164,770 $ 178,132 Trade receivables, net 477,198 435,223 Deferred income tax assets 13,180 10,027 Other current assets 46,376 44,509 ----------- ----------- Total current assets 701,524 667,891 Property, plant and equipment, net 72,646 71,190 Goodwill and other intangible assets, net 330,942 293,775 Investments 1,683 587 Deferred income tax assets 1,653 1,104 Other non-current assets 10,547 10,120 ----------- ----------- Total assets $ 1,118,995 $ 1,044,667 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Bank lines of credit $ 87,553 $ 92,340 Short-term borrowings 3,716 3,165 Current portion of capital lease obligations 4,346 3,465 Trade payables and other accrued liabilities 420,005 413,003 Income taxes payable 26,241 18,533 Deferred income tax liabilities 5,721 678 ----------- ----------- Total current liabilities 547,582 531,184 Long-term borrowings 18,115 5,105 Capital lease obligations 11,472 9,820 Deferred income tax liabilities 14,681 19,607 Retirement fund obligations 1,286 1,332 Other long-term liabilities 2,103 136 Minority interests 4,341 3,293 Commitments and contingencies Shareholders' equity: Common stock 351,479 325,905 Retained earnings 205,261 169,821 Accumulated other comprehensive loss (37,325) (21,536) ----------- ----------- Total shareholders' equity 519,415 474,190 ----------- ----------- Total liabilities and shareholders' equity $ 1,118,995 $ 1,044,667 =========== =========== UTi Worldwide Inc. Condensed Consolidated Statements of Cash Flows (in thousands) Six months ended July 31, ---------------------- 2005 2004 --------- --------- (Unaudited) OPERATING ACTIVITIES: Net income $ 40,112 $ 29,007 Adjustments to reconcile net income to net cash used in operating activities: Stock compensation costs 2,073 92 Depreciation and amortization 11,323 8,525 Amortization of intangible assets 2,124 430 Deferred income taxes (3,419) (832) Tax benefit relating to exercise of stock options 2,333 203 Gain on disposal of property, plant and equipment (95) (206) Other 1,617 1,062 Changes in operating assets and liabilities: Increase in trade receivables and other current assets (58,894) (93,477) Increase in trade payables and other current liabilities 38,652 79,473 --------- --------- Net cash provided by operating activities 35,826 24,277 INVESTING ACTIVITIES: Purchases of property, plant and equipment (9,020) (9,537) Proceeds from disposal of property, plant and equipment 316 1,586 Increase in other non-current assets (768) (314) Acquisitions of subsidiaries and contingent earn-out payments (36,006) (30,206) Other (754) (901) --------- --------- Net cash used in investing activities (46,232) (39,372) FINANCING ACTIVITIES: (Decrease)/increase in bank lines of credit (4,787) 7,315 Decrease in short-term borrowings (417) (1,057) Long-term borrowings -- advanced 13,715 1,521 Long-term borrowings -- repaid (310) (77) Repayments of capital lease obligations (2,324) (1,798) Decrease in minority interests (474) (404) Net proceeds from issuance of ordinary shares 6,151 1,906 Dividends paid (4,672) (3,563) --------- --------- Net cash provided by financing activities 6,882 3,843 --------- --------- Net decrease in cash and cash equivalents (3,524) (11,252) Cash and cash equivalents at beginning of period 178,132 156,687 Effect of foreign exchange rate changes (9,838) 5,009 --------- --------- Cash and cash equivalents at end of period $ 164,770 $ 150,444 ========= ========= UTi Worldwide Inc. Segment Reporting (in thousands) Three months ended July 31, 2005 ----------------------------------------------------- (Unaudited) Asia Europe Americas Pacific Africa Corporate Total -------- -------- -------- -------- -------- -------- Gross revenue from external customers $179,212 $171,172 $207,406 $128,442 $ -- $686,232 ======== ======== ======== ======== ======== ======== Net revenue $ 52,280 $ 92,056 $ 34,076 $ 59,853 $ -- $238,265 Staff costs 27,655 55,472 14,138 25,487 2,774 125,526 Depreciation and amortization 1,411 1,126 772 1,867 443 5,619 Amortization of intangible assets -- 735 78 169 -- 982 Other operating expenses 14,308 25,712 8,152 21,685 2,633 72,490 -------- -------- -------- -------- -------- -------- Operating income/ (loss) $ 8,906 $ 9,011 $ 10,936 $ 10,645 $ (5,850) 33,648 ======== ======== ======== ======== ======== Interest expense, net (695) Losses on foreign exchange (536) -------- Pretax income 32,417 Provision for income taxes 9,355 -------- Income before minority interests $ 23,062 ======== Three months ended July 31, 2004 ----------------------------------------------------- (Unaudited) Asia Europe Americas Pacific Africa Corporate Total -------- -------- -------- -------- -------- -------- Gross revenue from external customers $150,391 $134,100 $154,558 $101,310 $ -- $540,359 ======== ======== ======== ======== ======== ======== Net revenue $ 44,816 $ 67,972 $ 25,825 $ 47,890 $ -- $186,503 Staff costs 22,739 39,227 10,558 20,940 1,868 95,332 Depreciation and amortization 1,258 871 585 1,398 513 4,625 Amortization of intangible assets -- 135 -- 114 -- 249 Other operating expenses 13,299 22,356 6,407 18,510 2,195 62,767 -------- -------- -------- -------- -------- -------- Operating income/(loss) $ 7,520 $ 5,383 $ 8,275 $ 6,928 $ (4,576) 23,530 ======== ======== ======== ======== ======== Interest income, net 126 Losses on foreign exchange (123) -------- Pretax income 23,533 Provision for income taxes 6,877 -------- Income before minority interests $ 16,656 ======== UTi Worldwide Inc. Segment Reporting (in thousands) Six months ended July 31, 2005 ------------------------------------------------------------ (Unaudited) Asia Europe Americas Pacific Africa Corporate Total --------- --------- --------- --------- --------- ---------- Gross revenue from external cust- omers $ 341,195 $ 327,950 $ 389,120 $ 258,160 $ -- $1,316,425 ========= ========= ========= ========= ========= ========== Net revenue $ 101,908 $ 172,480 $ 62,803 $ 122,272 $ -- $ 459,463 Staff costs 54,816 102,003 26,599 52,854 5,025 241,297 Depreciation and amortiz- ation 2,826 2,242 1,465 3,852 938 11,323 Amortization of intangible assets -- 1,691 78 355 -- 2,124 Other operating expenses 27,770 50,411 15,413 45,736 4,814 144,144 --------- --------- --------- --------- --------- ---------- Operating income/ (loss) $ 16,496 $ 16,133 $ 19,248 $ 19,475 $ (10,777) 60,575 ========= ========= ========= ========= ========= Interest expense, net (1,418) Losses on foreign exchange (462) ---------- Pretax income 58,695 Provision for income taxes 16,931 ---------- Income before minority interests $ 41,764 ========== Six months ended July 31, 2004 ------------------------------------------------------------ (Unaudited) Asia Europe Americas Pacific Africa Corporate Total --------- --------- --------- --------- --------- ---------- Gross revenue from external cust- omers $ 285,085 $ 261,771 $ 299,286 $ 183,845 $ -- $1,029,987 ========= ========= ========= ========= ========= ========== Net revenue $ 84,513 $ 136,675 $ 49,342 $ 85,962 $ -- $ 356,492 Staff costs 44,583 80,619 20,704 37,798 3,560 187,264 Depreciation and amortiz- ation 2,428 1,677 1,175 2,371 874 8,525 Amortization of intangible assets -- 283 -- 147 -- 430 Other operating expenses 24,010 43,852 12,633 33,550 4,013 118,058 --------- --------- --------- --------- --------- ---------- Operating income/ (loss) $ 13,492 $ 10,244 $ 14,830 $ 12,096 $ (8,447) 42,215 ========= ========= ========= ========= ========= Interest income, net 299 Losses on foreign exchange (23) ---------- Pretax income 42,491 Provision for income taxes 12,422 ---------- Income before minority interests $ 30,069 ========== UTi Worldwide Inc. Supplemental Financial Information (in thousands) Three months ended Six months ended July 31, July 31, --------------------- --------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- (Unaudited) FORWARDING, CUSTOMS BROKERAGE AND OTHER: Gross revenue from external customers $ 549,616 $ 440,529 $1,057,210 $ 839,790 ========== ========== ========== ========== Net revenue $ 128,049 $ 110,297 $ 252,909 $ 210,141 Staff costs 65,746 54,599 131,315 107,168 Depreciation and amortization 3,238 2,700 6,498 5,213 Other operating expenses 33,386 32,567 69,301 60,599 ---------- ---------- ---------- ---------- Operating income $ 25,679 $ 20,431 $ 45,795 $ 37,161 ========== ========== ========== ========== CONTRACT LOGISTICS, DISTRIBUTION AND OTHER: Gross revenue from external customers $ 136,616 $ 99,830 $ 259,215 $ 190,197 ========== ========== ========== ========== Net revenue $ 110,216 $ 76,206 $ 206,554 $ 146,351 Staff costs 57,006 38,865 104,957 76,536 Depreciation and amortization 1,938 1,412 3,887 2,438 Amortization of intangible assets 982 249 2,124 430 Other operating expenses 36,471 28,005 70,029 53,446 ---------- ---------- ---------- ---------- Operating income $ 13,819 $ 7,675 $ 25,557 $ 13,501 ========== ========== ========== ==========