United States
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

For the quarterly period ended April 30, 2004
or

000-31869
(Commission File Number)

UTi Worldwide Inc.

310.604.3311
(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

At May 31, 2004, the number of shares outstanding of the issuer’s ordinary shares was 30,739,106.

UTi Worldwide Inc.

Report on Form 10-Q
For the Quarter Ended April 30, 2004

Table of Contents

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Part I. Financial Information

Item 1. Financial Statements

Condensed Consolidated Income Statements
For the three months ended April 30, 2004 and 2003
(in thousands, except share and per share amounts)

See accompanying notes to condensed consolidated financial statements.

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Condensed Consolidated Balance Sheets
As of April 30, 2004 and January 31, 2004
(in thousands, except share amounts)

See accompanying notes to condensed consolidated financial statements.

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Consolidated Statements of Cash Flows
For the three months ended April 30, 2004 and 2003
(in thousands)

See accompanying notes to condensed consolidated financial statements.

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Notes to the Condensed Consolidated Financial Statements
For the three months ended April 30, 2004 and 2003 (Unaudited)

NOTE 1. Presentation of Financial Statements

The accompanying unaudited condensed consolidated financial statements include the accounts of UTi Worldwide Inc. and its subsidiaries (UTi or the Company). These financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information. They do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Operating results for the three months ended April 30, 2004 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2005 or any other future periods.

The balance sheet at January 31, 2004 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended January 31, 2004 on file with the Securities and Exchange Commission.

All dollar amounts in the notes are presented in thousands except for share and per share data.

Pro Forma Information – Stock Options

As of April 30, 2004, the Company had six stock-based employee and non-employee compensation plans which are accounted for using the intrinsic value method under the recognition and measurement principles of Accounting Principle Board Opinion No. 25, Accounting for Stock Issued to Employees, and its related interpretations (APB No. 25). Compensation cost is recorded in net income only for stock options that have an exercise price below the market value of the underlying common stock on the date of grant. As required by Statement of Financial Accounting Standards (SFAS) No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure – an amendment of FASB Statement No. 123, the following table shows the estimated effect on net income and earnings per share as if the Company had applied the fair value recognition provision of SFAS No. 123, Accounting for Stock-Based Compensation, to all stock options.

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Pro Forma Information – Acquisitions

Effective February 1, 2004, the Company acquired 100% of the issued and outstanding shares of ET Logistics, S.L. (ET Logistics) and ILEX Consulting, S.L. (ILEX). The Company also acquired the remaining 50% of the issued and outstanding shares of Chilltrac (Pty.) Limited as of February 1, 2004. Effective May 1, 2003 and July 1, 2003, the Company acquired 100% of the issued and outstanding shares of IndAir Carriers (Pvt.) Ltd. and 50% of the issued and outstanding shares of Kite Logistics (Pty.) Limited, respectively. The purchase price allocations for ET Logistics and ILEX have not been finalized as of April 30, 2004. In addition to the cash purchase price for ET Logistics, there are three contingent earn-out payments which will be calculated based on a multiple of the acquired operation’s future earnings for the years ending January 31, 2005, 2006 and 2007. The following table shows the supplemental pro forma information as though the Company’s acquisitions had occurred February 1, 2003.

NOTE 2. Recent Accounting Pronouncements

In November 2002, the Financial Accounting Standards Board (FASB) issued Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (FIN No. 45). FIN No. 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurement provisions of FIN No. 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002 The disclosure requirements in this interpretation are effective for financial statements of interim or annual periods ended after December 15, 2002. The Company adopted the provisions of FIN No. 46, as of February 1, 2003, and such adoption did not have a material impact on its consolidated financial position or results of operations.

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In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation of Variable Interest Entities (FIN No. 46). FIN No. 46 clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. In December 2003, the FASB revised FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities [FIN No. 46 (R)]. FIN No. 46 (R) replaces FIN No. 46 in its entirety. FIN No. 46 (R) exempts certain entities from its requirements and clarifies certain complexities arising during the initial implementation of FIN No. 46. This revised interpretation is effective for reporting periods that end after March 15, 2004. The Company adopted the provisions of FIN No. 46 as February 1, 2004 and such adoption did not have a material impact on its consolidated financial position or results of operations.

In December 2003, the FASB issued SFAS No. 132 (revised 2003), Employers’ Disclosures about Pensions and Other Postretirement Benefits (SFAS No. 132). SFAS No. 132 retains the existing disclosure requirements for pensions and other postretirement benefits and requires additional disclosures for pension and other postretirement benefit plan assets, obligations and net costs in financial statements. In addition, SFAS No. 132 requires disclosures of certain plan information on a quarterly basis in interim financial statements. This statement changes the methodologies underlying the measurement of obligations or recognition of expenses. This statement is effective for fiscal years ending after December 15, 2003 for all domestic (United States) plans. As required by the statement, the Company included the interim-period disclosures in its financial reports for its year beginning February 1, 2004. The adoption of this statement did not have a material impact on its consolidated financial position or results of operations.

NOTE 3. Earnings per Share

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This calculation excludes the 323,580 and 401,256 ordinary shares held in the incentive trusts for the Union-Transport Share Incentive Plan and for the Executive Share Plan as of April 30, 2004 and 2003, respectively. Of the 323,580 ordinary shares held in the incentive trusts as of April 30, 2004, 246,329 ordinary shares were returned to the Company and cancelled in May 2004 in connection with the Long-Term Incentive Plan approved by the Company’s shareholders in February 2004.

NOTE 4. Other Comprehensive Income

NOTE 5. Segment Information

The Company operates in four geographic segments comprised of Europe, the Americas, Asia Pacific and Africa, which offer similar products and services. For segment reporting purposes by geographic region, airfreight and ocean freight forwarding gross revenues for the movement of goods is attributed to the country where the shipment originates. Gross revenues, as well as net revenues, for all other services are attributed to the country where the services are performed. Net revenues for airfreight and ocean freight forwarding related to the movement of the goods are prorated between the country of origin and the destination country, based on a standard formula.

Certain unaudited information regarding the Company’s operations by segment is summarized as follows:

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The following table shows the gross revenue and net revenue attributable to the Company’s principal services.

NOTE 6. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by reportable segment for the three months ended April 30, 2004 are as follows:

The amortized intangible assets as of April 30, 2004 relate primarily to the estimated fair value of the customer contracts and customer relationships acquired with Standard Corporation and Kite Logistics (Pty) Limited. The carrying value of intangible assets as of April 30, 2004 and January 31, 2004, are as follows:

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Amortization expense totaled $181 and $148 for the three months ended April 30, 2004 and 2003, respectively. The following table shows the expected amortization expense for these intangible assets for each of the next five fiscal years ended January 31:

NOTE 7. Supplemental Cash Flow Information

The following table shows the supplemental non-cash investing and financing activities and the supplemental cash flow information.

UTi is a holding company and so relies on dividends or advances from its subsidiaries to meet its financial obligations and to pay dividends on its ordinary shares. The ability of UTi’s subsidiaries to pay dividends to the Company and UTi’s ability to receive distributions is subject to applicable local law and other restrictions including, but not limited to, applicable tax laws and limitations contained in some of its bank credit facilities. Such laws and restrictions could limit the payment of dividends and distributions to the Company which would restrict UTi’s ability to continue operations. In general, UTi’s subsidiaries cannot pay dividends in excess of their retained earnings and most countries require the subsidiaries pay a distribution tax on all dividends paid. In addition, the amount of dividends that UTi’s subsidiary in Zimbabwe may pay is limited each year by the cumulative amount that the board of directors of such subsidiary has declared as dividends out of each year’s earnings.

NOTE 8. Contingencies

The Company is subject to legal proceedings and claims, which arise in the ordinary course of its business.

The Company is involved in litigation in Italy and England related to cases filed in 2000 with Enrico Furgada the former ultimate owner of Per Transport SpA and related entities in connection with its April 1998 acquisition of Per Transport SpA and its subsequent termination of the employment of the former ultimate owner as a consultant. The suits seek monetary damages, including compensation for termination of the owner’s consulting agreement. The Company has brought counter-claims for monetary damages in relation to warranty claims under the purchase agreement. The Company has been advised that proceedings to recover amounts owing by the former ultimate owner and other

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entities owned by him, to third parties may be instituted against the Company. It is alleged that Per Transport SpA guaranteed certain obligations of these other entities owned by the former ultimate owner. The Company believes that these alleged guarantees are the responsibility of the former ultimate owner. These alleged guarantees were made prior to its acquisition, were not disclosed to the Company during its acquisition negotiations nor were they disclosed in the audited statutory financial statements of Per Transport SpA. Civil and criminal proceedings have also been instituted against the former ultimate owner in relation to these alleged guarantees. The total of all such actual and potential claims is approximately $15.6 million, based on exchange rates as of April 30, 2004. The Company believes that it has adequate defenses in relation to these claims if these proceedings are brought against it.

The Company is one of seven defendants named in a lawsuit filed on July 30, 2001 in the United States Bankruptcy Court for the Southern District of New York. The plaintiff, the committee of unsecured creditors of FMI Forwarding (formerly known as Intermaritime Forwarding), alleges under a theory of fraudulent conveyance that the Company paid inadequate consideration for certain assets of Intermaritime Forwarding and also alleges that the Company is liable for debts of FMI Forwarding on a successor liability theory. The plaintiff seeks recovery in an amount up to $4.6 million.

The Company is one of approximately 83 defendants named in two class action lawsuits which were originally filed on September 19, 1995 and subsequently consolidated in the District Court of Brazaria County, Texas (23rd Judicial District) where it is alleged that various defendants sold chemicals that were utilized in the 1992 Gulf War by the Iraqi army which caused personal injuries to U.S. armed services personnel and their families, including birth defects. The lawsuits were brought on behalf of the military personnel who served in the 1992 Gulf War and their families and the plaintiffs are seeking in excess of $1 billion in damages. To date, the plaintiffs have not obtained class certification. The Company believes it is a defendant in the suit because an entity that sold the Company assets in 1993 is a defendant. The Company believes it will prevail in this matter because the alleged actions giving rise to the claims occurred prior to our purchase of the assets. The Company further believes that it will ultimately prevail in this matter since it never manufactured chemicals and the plaintiffs have been unable to thus far produce evidence that the Company acted as a freight forwarder for cargo that included chemicals used by the Iraqi army.

On August 19, 2003 in the District Court of Dallas County, Texas, UTi was named as one of the defendants in a wrongful death suit filed by the survivors of an automobile accident caused by the toppling of an ocean container from the chassis of a truck (Sim et. al. versus Sharpless et. al.). The truck was under the control of the steamship line at the time of the accident. The case is being defended by outside counsel appointed by our general liability insurance carrier. The plaintiffs are claiming non-specific but exemplary damages in excess of $4 million.

In the opinion of management, the amount of ultimate liability with respect to these actions will not materially affect the results of operations, financial position or liquidity of the Company. In accordance with SFAS No. 5, Accounting for Contingencies, the Company has not accrued for a loss contingency relating to the disclosed legal proceedings because it believes that, although unfavorable outcomes in the proceedings may be reasonably possible, they are not considered by management to be probable or reasonably estimable.

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NOTE 9. Retirement Benefit Plans

The Company operates defined benefit plans for qualifying employees in certain countries. Under these plans employees are entitled to retirement benefits as a certain percentage of the employee’s final salary on attainment of the qualifying retirement age. No other post-retirement benefits are provided.

The net periodic pension expense for the Company’s defined benefit plans consists of:

For the three months ended April 30, 2004, $222 of contributions have been made by the Company to its pension plans. The Company presently anticipates contributing an additional $735 to fund its pension plan in fiscal 2005 for a total of $957.

NOTE 10. Subsequent Event

On June 7, 2004, the Company announced that a partnership, of which the Company owns 74.9%, with the remaining 25.1% to be owned by a South African black economic empowerment organization, completed the acquisition of International Healthcare Distributors (Pty.) Limited, for the purchase price of approximately $40,000 in cash, including a loan of approximately $17,000 from the Company to the partnership.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

UTi Worldwide Inc. and its subsidiaries (which we refer to as the company or UTi) is an international, non-asset-based global integrated logistics company that provides air and ocean freight forwarding, contract logistics, distribution, customs clearances and other supply chain management services, including consulting, the coordination of purchase orders and customized management services. The company serves its customers through a worldwide network of branch offices, including exclusive agents, and contract logistics centers.

Our business operates in four geographic segments comprised of Europe, the Americas, Asia Pacific and Africa and in each of these geographic segments our principal sources of income include airfreight forwarding, ocean freight forwarding, customs brokerage, contract logistics and other supply chain management services.

Our recent growth in gross revenue and net revenue for the periods ended April 30, 2004 (which we refer to as the first quarter of fiscal 2005) and April 30, 2003 (which we refer to as the first quarter of fiscal 2004), compared to the respective prior year periods, resulted from growth which we attribute to our acquisitions, favorable exchange rates as compared to the U.S. dollar and the growth of our existing operations.

A significant portion of our expenses is variable and adjusts to reflect the level of our business activities. Other than transportation costs, staff costs are our single largest variable expense and are less flexible in the near term as we staff our operations based on uncertain future demand.

In February 2002, we initiated a five-year strategic operating plan which we named NextLeap. NextLeap is our plan to move UTi Worldwide from being a global freight forwarding operator to a company that can offer our customers a comprehensive range of services across the entire supply chain. NextLeap is a process of expanding and integrating our relationship with our customers and increasing the range of services we offer and provide for our customers, and thus cannot be measured in terms of “percentage implemented.” Under NextLeap, we are undertaking various efforts to attempt to increase our customers and revenue, improve our operating margins, and train and develop our employees. As of April 30, 2004, we have completed nine of the twenty quarters covered by NextLeap. This strategic operating plan requires that we successfully manage our operations and growth which we may not be able to do as well as we anticipate. Our business is subject to numerous factors beyond our control and we may not be able to successfully implement NextLeap and no assurances can be given that our efforts will result in increased revenues or improved margins or profitability. If we are not able to increase our revenues and improve our operating margins in the future under NextLeap, our results of operations could be adversely affected.

Effect of Foreign Currency Translation on Comparison of Results

Our reporting currency is the United States (U.S.) dollar. However, due to our global operations, we conduct and will continue to conduct business in currencies other than our reporting currency. The conversion of these currencies into our reporting currency for reporting purposes will be affected by movements in these currencies against the U.S. dollar. A depreciation of these currencies against the U.S. dollar would result in lower gross and net revenues reported, however as applicable costs are also converted from these currencies, costs would also be lower. The net impact on our net income is therefore somewhat mitigated. Similarly, the opposite effect will occur if these currencies appreciate against the U.S. dollar.

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Acquisitions

Acquisitions affect the comparison of our results between quarters for years prior to when acquisitions are made and to the comparable quarter in subsequent years, depending on the date of acquisition (i.e., acquisitions made on February 1, the first day of the first quarter of our fiscal year will only affect a comparison with the prior year’s results and will not affect a comparison to the following year’s results). The results of acquired businesses are included in our consolidated financial statements from the dates of their respective acquisitions. We consider the operating results of an acquired company during the first twelve months following the date of its acquisition to be an “acquisition impact” or a “benefit from acquisitions.” Thereafter, we consider the growth in an acquired company’s results to be organic growth.

Effective February 1, 2004, we acquired 100% of the issued and outstanding shares of ET Logistics, S.L. (ET Logistics) and ILEX Consulting, S.L. (ILEX) in our Europe region. We also acquired the remaining 50% of the issued and outstanding shares of Chilltrac (Pty.) Limited as of February 1, 2004 in our Africa region. Effective May 1, 2003 and July 1, 2003, the Company acquired 100% of the issued and outstanding shares of IndAir Carriers (Pvt) Ltd. (IndAir) and 50% of the issued and outstanding shares of Kite Logistics (Pty) Limited (Kite), respectively. Although these acquisitions do affect the comparison of our results for the first quarter of fiscal 2005 to the first quarter of fiscal 2004, we do not believe the impact of these acquisitions is significant on the results of our operations.

On June 7, 2004, we announced that a partnership, of which we own 74.9%, with the remaining 25.1% to be owned by a South African black economic empowerment organization, completed the acquisition of International Healthcare Distributors (Pty.) Limited, which we refer to as IHD, for the purchase price of approximately $40.0 million in cash, including a loan of $17.0 million from UTi to the partnership. On a going-forward basis, IHD’s revenues will be attributable to our Africa region, within which its revenues will be classified as contract logistics services.

Seasonality

Historically, our operating results have been subject to seasonal trends when measured on a quarterly basis. Our first quarter is traditionally weaker compared with the other fiscal quarters, which we believe is in keeping with the trends of the operating results of other supply chain service providers. This trend is dependent on numerous factors, including the markets in which we operate, holiday seasons, consumer demand and economic conditions. We cannot accurately predict the timing of these factors, nor can we accurately estimate the impact of any particular factor, and thus we can give no assurance that these historical seasonal patterns will continue in future periods.

Forward-Looking Statements

Except for historical information contained herein, this quarterly report on Form 10-Q contains 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, as amended, which involve certain risks and uncertainties. Forward-looking statements are included with respect to, but are not limited to, the company’s current business plan, strategy, strategic operating plan, discussion of its growth strategies and NextLeap, its global network and expanding capabilities in contract logistics. These forward-looking statements are identified by the use of such terms and phrases as “intends,” “intend,” “intended,” “goal,” “estimate,” “estimates,” “expects,” “expect,” “expected,” “project,” “projected,” “projections,” “plans,” “anticipates,” “anticipated,” “should,” “designed to,” “foreseeable future,” “believe,” “believes” and “scheduled” and similar expressions which generally identify forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying our forward-looking statements, including increased competition, integration risks associated with acquisitions, the effects of changes in foreign exchange rates, uncertainties and risks associated with the company’s operations in South Africa, 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. The company’s actual results or outcomes may differ materially from those anticipated. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

In assessing forward-looking statements contained herein, readers are urged to read carefully all cautionary statements contained in this Form 10-Q, including, without limitation, those contained under the heading, “Factors That May Affect Future Results and Other Cautionary Statements,” contained in this Form 10-Q. For these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Discussion of Results

The following discussion of our operating results explains material changes in our consolidated results of operations for the first quarter of fiscal 2005 compared to the first quarter of fiscal 2004. The discussion should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this report and our audited consolidated financial statements and notes thereto for the year ended January 31 2004, which are included in our annual report on Form 10-K for the year ended January 31, 2004, on file with the Securities and Exchange Commission. Our condensed

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consolidated financial statements included in this report, have been prepared in U.S. dollars and in accordance with accounting principles generally accepted in the United States (U.S. GAAP).

Geographic Segment Operating Results

We manage our business through four geographic segments comprised of Europe, the Americas, Asia Pacific and Africa, which offer similar products and services. Each geographic segment is managed by different executives who are directly accountable to and maintain regular contact with our Chief Executive Officer and Chief Operating Officer to discuss operating activities, financial results, forecasts and plans for each geographic region.

For segment reporting purposes by geographic region, airfreight and ocean freight forwarding gross revenues for the movement of goods is attributed to the country where the shipment originates. Gross revenues, as well as net revenues, for all other services are attributed to the country where the services are performed. Net revenues for airfreight and ocean freight forwarding related to the movement of the goods are prorated between the country of origin and the destination country, based on a standard formula. Our gross and net revenues and operating income by operating segment for the three months ended April 30, 2005 and 2004, along with the dollar amount of the changes and the percentage changes between quarters, are set forth in the following tables (in thousands):

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Our Europe region showed improvements in gross and net revenues due to organic growth in both air and ocean freight forwarding, which resulted primarily from higher shipment volumes in the first quarter of fiscal 2005 with airfreight yields comparable to the first quarter of fiscal 2004, increased revenues from our contract logistics services, which totaled over 150% of the contract logistics revenues reported in the comparable prior year period, and the impact of favorable exchange rates as compared to the U.S. dollar in the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004. The improvement in operating income was greatest in the Europe region out of all of our regions in the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004 due to controls on spending which were put in place starting in the second quarter of fiscal 2004 to hold the increase in costs to a lower percentage than our increase in net revenues. In addition, the results for the first quarter of fiscal 2004 were depressed by the results in our Sweden and Ireland operations, which results started to improve in the latter part of fiscal 2004.

The increases in gross and net revenues in the Americas region for the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004 were also due primarily to higher airfreight and ocean freight forwarding shipment volumes, with comparable yields to the first quarter of fiscal 2004, and to increased gross and net revenues from our contract logistics and other services. Similar to our Europe region, the improvement in Americas’ operating income also resulted from our concerted efforts to hold the increases in costs to a lower percentage than our increase in net revenues for the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004.

Our Asia Pacific region posted the highest gross revenues of all our regions for the first quarter of fiscal 2005, reflecting a 73% increase over the first quarter of fiscal 2004, while net revenues increased 23%. These increases were primarily due to increased volumes with lower yields and, secondarily, to the impact of the acquisition of IndAir, which was effective May 1, 2003. Asia Pacific continues to be our region with the highest operating profit margins, calculated by dividing operating income for the region by net revenues for the region, despite decreasing to 27.9% for the first quarter of fiscal 2005 from 28.9% for the first quarter of fiscal 2004. This decrease in operating profit margin was due to higher staff costs and operating expenses resulting from our ongoing investment to expand our network in this region.

Gross and net revenues in our Africa region increased in the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004 due primarily to organic growth, driven by higher volumes, and to the impact of favorable exchange rates as compared to the U.S. dollar. The acquisition impact of Kite also had a favorable impact on Africa’s gross and net revenues. Operating income in Africa grew at a higher rate of growth than our net revenues as a result of our concerted efforts to hold the increases in costs to a lower percentage than our increase in net revenues.

Because of the integrated nature of our business, with global customers being served by all of our regions and with at least two regions operating together to carry out our freight forwarding services, we also analyze our business by type of service in addition to looking at our results by geographic regions.

By service line, our total increase in gross revenue in the first quarter of fiscal 2005 over the first quarter of fiscal 2004 was due to increases in airfreight forwarding of 43%, ocean freight forwarding of 84%, contract logistics of 35%, other revenue of 36% and customs brokerage of 24%. Of the $162.8 million total increase in gross revenue for the first quarter of fiscal 2005, $114.7 million was due to organic growth, $35.8 million was due to the impact of favorable exchange rates as compared to the U.S. dollar and $12.3 million was due to the impact of acquisitions.

We believe that net revenue is a better measure than gross revenue of the importance to us of our various services since our gross revenue for our services as an indirect air and ocean carrier includes the carriers’ charges to us for carriage of the shipment. When we act as an indirect air and ocean carrier, our net revenue is determined by the differential between the rates charged to us by the carrier and the rates we charge our customers plus the fees we receive for our ancillary services. Net revenue derived from freight forwarding generally is shared between the points of origin and destination. Our gross revenue in our other capacities includes only commissions and fees earned by us and is substantially the same as our net revenue.

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The following table shows our net revenues and our operating expenses for the periods presented, expressed as a percentage of total net revenues.

Three months ended April 30, 2004 compared to three months ended April 30, 2003

Net revenue increased $38.6 million, or 29%, to $170.0 million for the first quarter of fiscal 2005 compared to $131.4 million for the first quarter of fiscal 2004. Our net revenue increase resulted primarily from organic growth from operations in all our geographic regions totaling $24.1 million, the impact of favorable exchange rates as compared to the U.S. dollar during the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004 and the impact of acquisitions made during the first quarter of fiscal 2005 as well as the effect of acquisitions made in the last three quarters of fiscal 2004. On a constant currency basis when we translate our first quarter of fiscal 2005 results using currency exchange rates in effect for the first quarter of fiscal 2004, we estimate that favorable exchange rates and acquisitions accounted for approximately $11.7 million and $2.8 million, respectively, of the net revenue increase for the first quarter of fiscal 2005 versus the first quarter of fiscal 2004.

Airfreight forwarding net revenue increased $11.9 million, or 26%, to $56.8 million for the first quarter of fiscal 2005 compared to $44.9 million for the prior year first quarter. This increase primarily resulted from organic growth in all of our regions and to the impact of favorable exchange rates as compared to the U.S. dollar in the first quarter of fiscal 2005 when compared to the first quarter of fiscal 2004, which accounted for approximately $4.7 million of the increase. Our organic growth resulted from higher volumes in all of our regions, partially offset by lower yields in the Africa and Asia Pacific regions. The Americas and Europe regions reported the highest increases in airfreight forwarding net revenue as a result of higher volumes and yield management.

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Ocean freight forwarding net revenue increased $5.1 million, or 32%, to $21.2 million for the first quarter of fiscal 2005 compared to $16.1 million for the same prior year period. This increase was due primarily to increased volumes in fiscal 2005 versus fiscal 2004 and was spread across all of our regions, but was particularly strong in the Africa region, which imports more than it exports, and in the Asia Pacific and Americas regions, which both reported increases of over 30% in volumes shipped. These volume increases were partially offset by our decline in yields in our Africa, Asia Pacific and Europe regions resulting primarily from price increases from ocean carriers which were typically passed through to customers at lower margins than we have historically experienced.

Customs brokerage net revenue increased $3.6 million, or 26%, to $17.9 million for the first quarter of fiscal 2005 compared to $14.3 million for the same prior year period. All of our regions had increased customs brokerage net revenue in the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004 primarily as a result of the higher shipping volumes resulting from increased demand for our services.

Contract logistics net revenue increased $12.9 million, or 30%, to $56.3 million for the first quarter of fiscal 2005 compared to $43.4 million for the first quarter of fiscal year 2004. This increase was primarily due to organic growth in our operations in all of our regions totaling $8.1 million, but in particular our Americas and Europe regions, as well as the generally favorable impact of exchange rates as compared to the U.S. dollar during the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004, which accounted for approximately $2.5 million, and to the impact of acquisitions made in the first quarter of fiscal 2005 and the last three quarters of fiscal 2004 (primarily Kite in our Africa region) which we estimated to be $2.3 million.

Other net revenue, which includes revenue from our other supply chain management services including outsourced distribution services, increased $4.9 million, or 39%, to $17.7 million for the first quarter of fiscal 2005 compared to $12.8 million for the first quarter of fiscal 2004. This increase was primarily in our Americas region and resulted from increased business reported by Standard in the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004.

Staff costs increased $21.5 million, or 31%, to $91.9 million for the first quarter of fiscal 2005 from $70.4 million for the same prior year period, primarily as a result of the addition of personnel in connection with increased levels of business, as well as our acquisitions, and the impact of exchange rates as compared to the generally weakening U.S. dollar during the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004, which accounted for approximately $5.6 million of the increase in staff costs. Total staff costs stayed constant at 54% when expressed as a percentage of net revenues between the first quarter of fiscal year 2005 and first quarter of fiscal year 2004. Staff costs are the largest component of operating expenses and we strive to manage these costs in relation to net revenue growth.

Depreciation and amortization expense increased by $0.4 million, or 12%, to $3.9 million for the first quarter of fiscal 2005 over the first quarter of fiscal 2004 primarily due to the impact of exchange rates as compared to the generally weakening U.S. dollar during the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004. Depreciation and amortization expense declined slightly to 2% of net revenue in fiscal 2004 as compared to 3% in the prior year.

Other operating expenses increased by $9.0 million, or 19%, to $55.3 million in the first quarter of fiscal 2005 compared to $46.3 million for the first quarter of fiscal 2004. Of this increase, approximately $3.8

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million was due to the impact of exchange rates as compared to the generally weakening U.S. dollar during the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004. Included in other operating expenses for the first quarter of fiscal 2005 are facilities and communications costs of $18.9 million compared to $15.2 million of such costs for the first quarter of fiscal 2004. Facilities and communications costs increased primarily as a result of the addition of new locations in the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004 and secondarily to the impact of the exchange rate differences. The balance of the other operating expenses is comprised of selling, general and administrative costs. For the first quarter of fiscal 2005, selling, general and administrative costs were $36.4 million compared to $31.1 million for the first quarter of fiscal 2004. The increase in selling, general and administrative costs was primarily a result of increased costs related to our domestic courier and trucking services and secondarily to the impact of the exchange rate differences. When expressed as a percentage of net revenue, other operating expenses decreased to 33% for the first quarter of fiscal 2005 from 35% for the first quarter of fiscal 2004.

Our interest income relates primarily to interest earned on our cash deposits, while our interest expense consists primarily of interest on our credit facilities and capital lease obligations. Interest income and interest expense decreased in the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004 by $0.5 million, or 36%, and $0.6 million, or 42%, respectively. The decrease in interest income was primarily due to the lower levels of cash balances in the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004 and secondarily to lower interest rates, while the decrease in interest expense was due primarily to lower borrowings in the first quarter of fiscal 2005 as compared to the first quarter of fiscal 2004.

The effective income tax rate increased to 29% in the first quarter of fiscal 2005 compared to 24% in the first quarter of fiscal 2004. This effective income tax rate increase was primarily due to changes in the geographic composition of our taxable income. Our overall tax rate is impacted by the geographic composition of our worldwide taxable income. For fiscal 2005, we currently anticipate that our effective tax rate will be approximately 29%, although such rate may fluctuate due to the geographic mix of our taxable income.

Net income increased by $4.8 million, or 60%, to $12.8 million in the first quarter of fiscal 2005 as compared to $8.0 million in the prior year period for the reasons listed above.

Liquidity and Capital Resources

As of April 30, 2004, our cash and cash equivalents totaled $140.9 million, representing a decrease of $15.8 million from January 31, 2004, as a result of using a total of $15.0 million of cash in our operating, investing and financing activities and a negative impact of $0.8 million related to the effect of foreign exchange rate changes on our cash balances. Historically, we have used our internally generated net cash flow from operating activities along with the net proceeds from the issuance of ordinary shares to fund our working capital requirements, capital expenditures, acquisitions and debt service.

In the first quarter of fiscal 2005, we used $4.9 million in net cash for operating activities. This resulted from net income of $12.8 million plus depreciation and amortization of intangible assets totaling $4.1 million and other items totaling $0.8 million, offset by a net increase in working capital of approximately $22.6 million. The increases in trade receivables and other current assets and trade payables and other current liabilities during the first quarter of fiscal 2005 were primarily due to increased levels of

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business in all of our geographic regions in the first quarter of fiscal 2005 as compared to the three months ended January 31, 2004.

During the first quarter of fiscal 2005, cash used for capital expenditures was $3.6 million, consisting primarily of computer hardware and software and furniture, fixtures and fittings. Based on our current operations, we do not expect our capital expenditures to be significantly higher in fiscal 2005 when compared to fiscal 2004. During the first quarter of fiscal 2005, we used $2.9 million of cash for acquisitions and contingent earn-out payments, of which approximately $1.5 million (net of cash acquired) was used to acquire ET Logistics, $0.4 million was used to increase our shareholding in our Indonesian subsidiary and $1.0 million was used for a final contingent earn-out payment for our acquisition of the Continental group of companies made in fiscal 2001. Future earn-out payment calculations, which may result in a significant use of cash (or in the case of our acquisition of Grupo SLi and Union, SLi, which we refer to as SLi, the issuance of shares as the acquisition agreement permits the sellers to elect, at their option, the earn-out payment in the form of ordinary shares instead of cash at a deemed price of $15.82 per ordinary share), include the second and final contingent earn-out payment for Standard, which is limited by the purchase agreement to be no more than $4.3 million and is scheduled for the fourth quarter of fiscal 2005, the three remaining contingent earn-out payment calculations related to our acquisition of SLi, each of which is scheduled for the second quarter of fiscal 2005, fiscal 2006 and fiscal 2007, respectively, and three contingent earn-out payments related to our recent acquisition of ET Logistics which will be calculated based on a multiple of the acquired operation’s future earnings for the years ending January 31, 2005, 2006 and 2007. There are no contractual limits on the amounts that may be payable under the contingent earn-out payment terms for SLi and ET Logistics as they are contingent on the earnings of each of the acquired businesses; however, we anticipate that the contingent earn-out payments would be self-funding in that the increased earnings from the operations would be used to fund the earn-out payments.

Our financing activities during the first quarter of fiscal 2005 used $3.2 million of cash, primarily due to reductions on our bank lines of credit totaling $2.8 million.

Subsequent to the end of the quarter, we used approximately $3.6 million of cash in May 2004 for the payment of dividends on our ordinary shares as declared by our board of directors on April 6, 2004 and we used approximately $40.0 million of cash in June 2004 for the acquisition of IHD, which includes a loan of approximately $17.0 million to the partnership, of which we own 74.9%.

Credit Facilities

We have various bank credit facilities established in countries where such facilities are required for our business. At April 30, 2004 these facilities provided for lines of credit from approximately $0.1 million to $43.9 million totaling $81.7 million, and provided for guarantees, which are a necessary part of our business, totaling $57.1 million, for a total borrowing capacity of $138.8 million. Due to the global nature of our business, we utilize a number of different financial institutions to provide these various facilities. Consequently, the use of a particular credit facility is normally restricted to the country in which it originated and a particular credit facility may restrict distributions by the subsidiary operating in the country. Our borrowings under these facilities totaled $15.4 million at April 30, 2004 and we had approximately $66.3 million of available, unused borrowing capacity under our various bank lines of credit. Most of our borrowings are secured by grants of security interests in accounts receivable and other assets, including pledges of stock of our subsidiaries. The interest rates on these facilities vary and ranged from 0.5% to 16.8% at April 30, 2004. These rates are generally linked to the prime lending rate in each country where we have facilities. We use our credit facilities to primarily fund our working capital needs as well as to provide for customs bonds and guarantees and forward exchange transactions. The customs bonds and guarantees relate primarily to our obligations for credit that is extended to us in the ordinary course of business by direct carriers, primarily airlines, and for duty and tax deferrals granted by governmental entities responsible for the collection of customs duties and

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value-added taxes. The total underlying amounts that are due and payable by us for transportation costs and governmental excises are properly recorded as liabilities in the attached financial statements. Therefore no additional liabilities have been recorded for these guarantees in the unlikely event that the guarantor company were to be required to perform as those liabilities would be duplicative. While the majority of our borrowings are due and payable within one year, we believe we will be able to renew such facilities on commercially reasonable terms.

Our current largest credit facility is with Nedcor Bank Limited (Nedcor Bank), totaling 28.3 million British pounds sterling (equivalent to approximately $50.2 million as of April 30, 2004). Of this facility, approximately $43.9 million is primarily used for guarantees and standby letters of credit to secure banking facilities and $6.3 million is primarily used for guaranteeing performance undertakings of our subsidiary companies. The facility is available on an ongoing basis until further notice, subject to Nedcor Bank’s credit review procedures and may be terminated by the bank at any time. In the event this credit facility is terminated by the bank, we would be required to seek replacement financing which could involve selling equity securities or incurring debt from another lender which may not be on terms as advantageous as those we obtained from Nedcor Bank. The facility is secured by cross guarantees and indemnities of selected subsidiary companies.

As of the date of this filing, UTi, (U.S.) Holdings, Inc., the U.S. parent company of our operating subsidiary companies in the United States, is in the process of negotiating a proposed senior revolving credit facility primarily for use in our operations in the United States. If completed, it is currently anticipated that the proposed facility would provide for borrowings based upon a borrowing base formula. In the event the proposed credit facility is not finalized, we believe we have sufficient working capital in order to fund our operations in the United States as currently conducted without disruption or adverse consequences.

We believe that with our current cash position, various bank credit facilities and operating cash flows, we have sufficient means to meet our working capital and liquidity requirements for the next twelve months as our operations are currently conducted.

Other Factors which May Affect our Liquidity

As discussed in “Factors That May Affect Future Results and Other Cautionary Statements,” following, South Africa faces a number of social, political and economic issues which may affect our South African operations. In January 2004, the South African government enacted legislation requiring business enterprises to develop empowerment plans and to report on their compliance with those plans. Our operations in South Africa are currently not certified as being “black empowered” for purposes of the legislation and we are actively considering the steps which will be necessary for us to become certified as “black empowered.” To achieve such certification, it may be necessary for us to restructure a portion of our South African operations or to dispose of a portion of our South African assets. Unless our operations become certified as “black empowered,” our existing customers may curtail or discontinue doing business with us or we may be unable to acquire additional business from new customers to the extent those customers seek to do business with black empowered enterprises. In this event, our investments in South Africa and our South African revenue and operating profits may be adversely affected.

We are a holding company and all of our operations are conducted through subsidiaries. Consequently, we rely on dividends or advances from our subsidiaries (including those that are wholly owned) to meet our financial obligations and to pay dividends on our ordinary shares. The ability of our

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subsidiaries to pay dividends to us and our ability to receive distributions on our investments in other entities is subject to applicable local law and other restrictions including, but not limited to, applicable tax laws and limitations contained in some of our bank credit facilities. Such laws and restrictions could limit the payment of dividends and distributions to us which would restrict our ability to continue operations. In general, our subsidiaries cannot pay dividends to us in excess of their retained earnings and most countries in which we conduct business require us to pay a distribution tax on all dividends paid. In addition, the amount of dividends that our subsidiary in Zimbabwe may pay is limited each year by the cumulative amount the board of directors of such subsidiary has declared as dividends out of each year’s earnings. At present, we are not aware of any restrictions that would have a material impact on the ability of our subsidiaries to declare and remit dividends to their respective holding companies.

Off-Balance Sheet Arrangements

Other than operating leases, we have no material off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The company’s financial statements are prepared in conformity with U.S. GAAP. The preparation thereof requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best available information and actual results could differ materially from those estimates.

There have been no significant changes in the company’s critical accounting policies during the first quarter of fiscal 2005.

Factors That May Affect Future Results and Other Cautionary Statements

In addition to the other information contained in this quarterly report on Form 10-Q, you should consider carefully the following factors and uncertainties in evaluating our business. Our business and operations are subject to a number of risks and uncertainties, and the following list should not be considered to be a definitive list of all factors that may affect our business, financial condition and future results of operations and should be read in conjunction with the factors, risks and uncertainties contained in our other filings with the Securities and Exchange Commission. We caution readers that any forward-looking statements made by us are made with the intention of obtaining the benefits of the “safe harbor” provisions of the Private Securities Litigation Reform Act and that a number of factors, including but not limited to those discussed below, could cause our actual results and experiences to differ materially from the anticipated results or expectations expressed in any forward-looking statements.

We conduct business throughout the world and we expect that our results of operations may be impacted by international trade volumes and by global and regional economic conditions.

Our business is related to and dependent on general world economic conditions, and the local, regional, national and international conditions that affect international trade and the specific regions or countries that we serve. We are affected by recessionary economic cycles and downturns in our

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customers’ business cycles, particularly in market segments and industries such as chemicals, pharmaceuticals and apparel, where we have a significant concentration of customers.

Economic conditions, including those resulting from wars, civil unrest, acts of terrorism and other conflicts, may adversely affect the global economy, our customers and their ability to pay for our services. The consequences of any armed conflict are unpredictable, and we may not be able to foresee events that could have an adverse effect on our business. We expect that our revenue and results of operations will continue to be sensitive to global and regional economic conditions.

Our international presence exposes us to potential difficulties associated with managing distant operations and to regulatory, tariff, licensing and other risks.

We conduct a majority of our business outside of the United States and we anticipate that revenue from foreign operations will continue to account for a significant amount of our future revenue. Our international operations are directly related to and dependent on the volume of international trade and local market conditions. Our international operations and international commerce are influenced by many factors, including:

•		changes in economic and political conditions and in governmental policies,
•		changes in international and domestic customs regulations,
•		wars, civil unrest, acts of terrorism and other conflicts,
•		natural disasters,
•		changes in tariffs, trade restrictions, trade agreements and taxation,
•		difficulties in managing or overseeing foreign operations,
•		limitations on the repatriation of funds because of foreign exchange controls,
•		different liability standards, and
•		intellectual property laws of countries which do not protect our intellectual property rights to the same extent as the laws of the United States.

The occurrence or consequences of any of these factors may restrict our ability to operate in the affected region and/or decrease the profitability of our operations in that region.

Restrictions and controls on investments and acquisitions outside of the United States and our ability to conduct business with local agents in particular countries may restrict our ability to operate in those countries.

Investments in joint ventures or businesses outside of the United States have been and will continue to be restricted or controlled to varying degrees. These restrictions or controls have and may continue to limit or preclude investments in proposed joint ventures or business acquisitions outside of the United States or increase our costs and expenses in seeking to effect such transactions. Various governments require governmental approval prior to investments by foreign persons and limit the extent

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of any such investments. In some countries, we may be required by local regulations to conduct operations pursuant to an agency or sponsorship agreement. Even if not required by regulations, we may conduct business in a country with a local agent who can provide knowledge of the local market conditions and facilitate the acquisition of necessary licenses and permits. The loss of an agent or sponsor could result in the temporary or permanent cessation of operations in a particular country. There can be no assurance that we will be able to replace such agent or sponsor on favorable terms, if at all. Furthermore, various governments restrict investment opportunities by foreign persons in some industries or may require governmental approval for the repatriation of capital and income by foreign investors. There can be no assurance that such approvals will be forthcoming in the future. There also can be no assurance that additional or different restrictions or adverse policies applicable to us will not be imposed in the future or, if imposed, as to the duration or impact of any such restrictions or policies.

Foreign currency fluctuations could result in currency translation exchange gains or losses or could increase or decrease the book value of our assets.

Our reporting currency is the United States dollar. In the first quarter of fiscal 2005, we derived a substantial portion of our gross revenue in currencies other than the United States dollar and, due to the global nature of our operations, we expect in the foreseeable future to continue to conduct a significant amount of our business in currencies other than our reporting currency. Appreciation or depreciation in the value of other currencies as compared to our reporting currency will result in currency translation exchange gains or losses which, if the appreciation or depreciation is significant, could be material. In those areas where our revenue is denominated in a local currency rather than our reporting currency, a depreciation of the local currency against the United States dollar could adversely affect our reported United States dollar earnings. Additionally, the assets and liabilities of our international operations are denominated in each country’s local currency. As such, when the value of those assets is translated into United States dollars, foreign currency exchange rates may adversely affect the book value of our assets. We cannot predict the effects of exchange rate fluctuations on our future operating results. We will experience the effects of changes in foreign currency exchange rates on our consolidated net income in the future.

We have significant operations located in South Africa which are subject to various economic, regulatory, political and other uncertainties and factors which could adversely impact our operations located in that country.

For the fiscal year ended January 31, 2004, approximately 20% of our net revenues were generated in South Africa and our South African assets represented approximately 20% of our total assets as of January 31, 2004. South Africa faces a number of social, political and economic issues which may affect our South African operations.

The government of South Africa and the South African business community have recently undertaken a number of significant steps designed to involve historically disadvantaged South Africans in the ownership and management of South African businesses and to achieve broad-based black empowerment in the South African economy. In January 2004, the South African government enacted legislation requiring business enterprises to develop empowerment plans and to report on their compliance with those plans. The purpose of the legislation is to empower historically disadvantaged South Africans through diverse but integrated social economic strategies including direct empowerment, the object of which is the promotion of ownership and control of the South African economy, the promotion of human resource development, and indirect empowerment incorporating criteria such as the level of procurement sourced from businesses which are owned or empowered by

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historically disadvantaged South Africans and investments in, and joint ventures with, businesses empowered or owned by historically disadvantaged South Africans.

Our operations in South Africa are currently not certified as being “black empowered” for purposes of the legislation and we are actively considering the steps which will be necessary for us to become certified as “black empowered.” To achieve such certification, it may be necessary for us to restructure a portion of our South African operations or to dispose of a portion of our South African assets. Unless our operations become certified as “black empowered,” our existing customers may curtail or discontinue doing business with us or we may be unable to acquire additional business from new customers to the extent those customers seek to do business with black empowered enterprises. In this event, our investments in South Africa and our South African revenue and operating profits may be adversely affected.

Because our business is dependent on commercial airfreight carriers and air charter operators, ocean freight carriers and other transportation companies, changes in available cargo capacity and other changes affecting such carriers as well as interruptions in service or work stoppages by such carriers may negatively impact our business.

We rely on commercial airfreight carriers and air charter operators, ocean freight carriers, trucking companies and other transportation companies for the movement of our customers’ cargo. Consequently, our ability to provide these services for our clients could be adversely impacted by shortages in available cargo capacity; changes by carriers and transportation companies in policies and practices such as scheduling, pricing, payment terms and frequency of service or increases in the cost of fuel, taxes and labor; and other factors not within our control. Reductions in airfreight or ocean freight capacity could negatively impact our yields. Material interruptions in service or stoppages in transportation, whether caused by strike, work stoppage, lock-out, slowdown or otherwise, could adversely impact our business, results of operations and financial condition.

Our business is subject to seasonal trends.

Historically, our operating results have been subject to seasonal trends when measured on a quarterly basis. Our first fiscal quarter is traditionally weaker compared with our other fiscal quarters. This trend is dependent on numerous factors, including the markets in which we operate, holiday seasons, consumer demand, climate, economic conditions and numerous other factors beyond our control. There can be no assurance that our historic operating patterns will continue in future periods as we cannot influence or forecast many of these factors.

Comparisons of our operating results from period to period are not necessarily meaningful and should not be relied upon as an indicator of future performance.

Our operating results have fluctuated in the past and it is likely that they will continue to fluctuate in the future because of a variety of factors, many of which are beyond our control. Changes in our pricing policies and those of our competitors and changes in the shipping patterns of our customers may adversely impact our operating results. In addition, the following factors could also cause fluctuations in our operating results:

•		personnel costs,
•		timing and magnitude of capital expenditures,

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•

costs relating to the expansion of operations,

•		costs and revenue fluctuations due to acquisitions,
•		pricing and availability of cargo space on airlines, ships and trucks which we utilize to transport freight,
•		adjustments in inventory levels,
•		customer discounts and credits, and
•		changes in our customers’ requirements for contract logistics and outsourcing services.

Because our quarterly revenues and operating results vary significantly, comparisons of our results from period to period are not necessarily meaningful and should not be relied upon as an indicator of future performance.

We have grown and plan to grow, in part, through acquisitions of other freight forwarders, contract logistics providers, customs brokers, and other supply chain management providers. Growth by acquisitions involves risks and we may not be able to identify or acquire companies consistent with our growth strategy or successfully integrate any acquired business into our operations.

We have grown through acquisitions and we may pursue opportunities to expand our business by acquiring other companies in the future. Acquisitions involve risks including those relating to:

•

identification of appropriate acquisition candidates or negotiation of acquisitions on favorable terms and valuations,

•

integration of acquired businesses and personnel,

•

implementation of proper business and accounting controls,

•

ability to obtain financing, on favorable terms or at all,

•

diversion of management attention,

•

retention of employees and customers, and

•

unexpected liabilities.

Our growth strategy may affect short-term cash flow and net income as we expend funds, increase indebtedness and incur additional expenses in connection with pursuing acquisitions. If we are not able to identify or acquire companies consistent with our growth strategy or if we fail to successfully integrate any acquired companies into our operations, we may not achieve anticipated increases in revenue, cost savings and economies of scale, and our operating results may be adversely affected.

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Our growth and profitability may not continue, which may result in a decrease in our stock price.

We experienced significant growth in revenue and operating income over the past several years. There can be no assurance that our growth rate will continue or that we will be able to effectively adapt our management, administrative and operational systems to respond to any future growth. We can provide no assurance that our operating margins will not be adversely affected by future changes in and expansion of our business or by changes in economic or political conditions. Slower or less profitable growth or losses could adversely affect our results of operations which may result in a decrease in our stock price.

We may not succeed with our NextLeap strategic operating plan, and as a result our revenue and profitability may not increase.

We recently completed the ninth quarter of NextLeap, our five-year strategic operating plan designed to help us transition from being a global freight forwarding operator to a global integrated logistics provider offering our customers a comprehensive range of services across the entire supply chain. Under NextLeap, we are undertaking various efforts to attempt to increase our customers and revenue, improve our operating margins, and train and develop our employees. This strategic operating plan requires that we successfully manage our operations and growth which we may not be able to do as well as we anticipate. Our business is subject to numerous factors beyond our control and we may not be able to successfully implement NextLeap and no assurances can be given that our efforts will result in increased revenues or improved margins or profitability. If we are not able to increase our revenue or improve our operating margins in the future, our results of operations could be adversely affected.

Our effective income tax rate will impact our results of operations, our cash flow and our profitability.

We have international operations and generate taxable income in different countries throughout the world, with different effective income tax rates. Our future effective income tax rate will be impacted by a number of factors, including the geographical composition of our worldwide taxable income. If the tax laws of the countries in which we operate are rescinded or changed or the United States or other foreign tax authorities were to change applicable tax laws or successfully challenge the manner or jurisdiction in which our profits currently are recognized, our effective income tax rate could increase, which would adversely impact our cash flow and profitability.

We face intense competition in the freight forwarding, contract logistics and supply chain management industry.

The freight forwarding, contract logistics and supply chain management industry is intensely competitive and we expect it to remain so for the foreseeable future. We face competition from a number of companies, including many that have significantly greater financial, technical and marketing resources. There are a large number of companies competing in one or more segments of the industry. We also encounter competition from regional and local third-party logistics providers, freight forwarders and integrated transportation companies. Depending on the location of the customer and the scope of services requested, we must compete against both the niche players, including wholesalers in the pharmaceuticals industry, and larger competitors. In addition, customers increasingly are turning to competitive bidding situations involving bids from a number of competitors, including competitors that are larger than us. We also face competition from air and ocean carriers,

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computer information and consulting firms and contract manufacturers, all of which traditionally operated outside of the supply chain management industry, but are now beginning to expand the scope of their operations to include supply chain related services. Increased competition could result in reduced revenues, reduced margins or loss of market share, any of which could damage the long-term or short-term prospects of our business.

Our industry is consolidating and if we cannot gain sufficient market presence in our industry, we may not be able to compete successfully against larger, global companies in our industry.

There currently is a marked trend within our industry toward consolidation of niche players into larger companies which are attempting to increase their global operations through the acquisition of freight forwarders and contract logistics providers. If we cannot gain sufficient market presence in our industry through internal expansion and additional acquisitions, we may not be able to compete successfully against larger, global companies in our industry.

We are dependent on key management personnel and the loss of any such personnel could materially and adversely affect our business.

Our future performance depends, in significant part, upon the continued service of our key management personnel, including Roger MacFarlane (Chief Executive Officer), Matthys Wessels (Chairman of the Board and Chief Executive Officer - African Region), Alan Draper (Executive Vice President and President — Asia Pacific Region) and Lawrence Samuels (Senior Vice President — Finance, Chief Financial Officer and Secretary). There can be no assurance that we can retain such key managerial employees. The unplanned loss of the services of one or more of these or other key personnel could have a material adverse effect on our business, operating results and financial condition. In addition, Peter Thorrington, our President and Chief Operating Officer, announced his intention in December 2003 to retire during fiscal 2005. No assurances can be given that we will be able to find a replacement with the operating experience and skills of Mr. Thorrington. We must continue to develop and retain a core group of management personnel and address issues of succession planning if we are to realize our goal of growing our business. We cannot assure you that we will be successful in our efforts.

Because we are a holding company, we are financially dependent on receiving distributions from our subsidiaries and we could be harmed if such distributions could not be made in the future.

We are a holding company and all of our operations are conducted through subsidiaries. Consequently, we rely on dividends or advances from our subsidiaries (including those that are wholly owned) to meet our financial obligations and to pay dividends on our ordinary shares. The ability of our subsidiaries to pay dividends to us and our ability to receive distributions on our investments in other entities is subject to applicable local law and other restrictions including, but not limited to, applicable tax laws and limitations contained in some of our bank credit facilities. Such laws and restrictions could limit the payment of dividends and distributions to us which would restrict our ability to continue operations. In general, our subsidiaries cannot pay dividends to us in excess of their retained earnings and most countries in which we conduct business require us to pay a distribution tax on all dividends paid. In addition, the amount of dividends that our subsidiary in Zimbabwe may pay is limited each year by the cumulative amount the board of directors of such subsidiary has declared as dividends out of each year’s earnings.

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Because we manage our business on a decentralized basis, our operations may be materially adversely affected by inconsistent management practices.

We manage our business on a decentralized basis, with local and regional management retaining responsibility for day-to-day operations, profitability and the growth of the business. Our decentralized operating strategy can make it difficult for us to implement strategic decisions and coordinated procedures throughout our global operations. In addition, many of our subsidiaries operate with management, sales and support personnel that may be insufficient to support growth in their respective businesses without significant central oversight and coordination. Our decentralized operating strategy could result in inconsistent management practices and materially adversely affect our overall profitability, and ultimately our business, results of operations, financial condition and prospects.

We may need additional financing to fund our operations and finance our growth, and we may not be able to obtain financing on terms acceptable to us or at all.

We may require additional financing to fund our operations and our current plans for expansion. Because our credit facilities often are limited to the country in which the facility is originated, we may require additional financing to fund our operations in countries in which we do not have existing credit facilities. In addition, when our existing credit facilities expire, we may need to obtain replacement financing. Our largest credit facility is with Nedcor Bank which may be terminated by the bank at any time. Additional or replacement financing may involve incurring debt or selling equity securities. There can be no assurance that additional or replacement financing will be available to us on commercially reasonable terms or at all. If we incur debt, the risks associated with our business could increase. If we raise capital through the sale of equity securities, the percentage ownership of our shareholders will be diluted. In addition, any new equity securities may have rights, preferences or privileges senior to those of our ordinary shares. If we are unable to obtain additional or replacement financing, our ability to fund our operations and meet our current plans for expansion will be materially adversely affected.

If we fail to develop and integrate information technology systems or we fail to upgrade or replace our information technology systems to handle increased volumes and levels of complexity, meet the demands of our customers and protect against disruptions of our operations, we may lose inventory items, orders or customers, which could seriously harm our business.

Increasingly, we compete for customers based upon the flexibility and sophistication of the information technology systems supporting our services. The failure of the hardware or software that supports our information technology systems, the loss of data contained in the systems, or the inability to access or interact with our web site or connect electronically, could significantly disrupt our operations, prevent customers from making orders, or cause us to lose inventory items, orders or customers. If our information technology systems are unable to handle additional volume for our operations as our business and scope of services grow, our service levels, operating efficiency and future transaction volumes will decline. In addition, we expect customers to continue to demand more sophisticated, fully integrated information technology systems from their supply chain services providers. If we fail to hire qualified persons to implement, maintain and protect our information technology systems or we fail to upgrade or replace our information technology systems to handle increased volumes and levels of complexity, meet the demands of our customers and protect against disruptions of our operations, we may lose inventory items, orders or customers, which could seriously harm our business.

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Our information technology systems are subject to risks which we cannot control.

Our information technology systems are dependent upon global communications providers, web browsers, telephone systems and other aspects of the Internet infrastructure which have experienced significant system failures and electrical outages in the past. Our systems are susceptible to outages due to fire, floods, power loss, telecommunications failures, break-ins and similar events. Despite our implementation of network security measures, our servers are vulnerable to computer viruses, break-ins and similar disruptions from unauthorized tampering with our computer systems. The occurrence of any of these events could disrupt or damage our information technology systems and inhibit our internal operations, our ability to provide services to our customers and the ability of our customers to access our information technology systems.

We may be adversely affected if we are unable to license the software necessary for our information technology system.

We license a variety of software which is used in our proprietary information technology system which we call eMpower⁵. As a result, the success and functionality of our information technology system is dependent upon our ability to continue our licenses for this software. There can be no assurance that we will be able to maintain these licenses or replace the functionality provided by this software on commercially reasonable terms or at all. The failure to maintain these licenses or a significant delay in the replacement of this software could have a material adverse effect on our business, financial condition and results of operations.

If we fail to adequately protect our intellectual property rights, the value of such rights may diminish and our results of operations and financial condition may be materially adversely affected.

We rely on a combination of copyright, trademark and trade secret laws and confidentiality procedures to protect our intellectual property rights. These protections may not be sufficient, and they do not prevent independent third-party development of competitive products or services. Further, the laws of many foreign countries do not protect our intellectual property rights to the same extent as the laws of the United States. A failure to protect our intellectual property rights could result in the loss or diminution in value of such rights.

If we are not able to limit our liability for customers’ claims through contract terms and the purchase of insurance, we could be required to pay large amounts to our customers as compensation for their claims and our results of operations could be materially adversely affected.

In general, we limit by contract our liability to our customers for loss or damage to their goods to $20 per kilogram (approximately $9.07 per pound) for airfreight shipments and $500 per carton or customary unit, including an ocean container, for ocean freight shipments, with the actual insured amount determined based on the value of the freight. However, because a freight forwarder’s relationship to an airline or ocean carrier is that of a shipper to a carrier, the airline or ocean carrier generally assumes the same responsibility to us as we assume to our customers. When we act in the capacity of an authorized agent for an air or ocean carrier, the carrier, rather than we, assumes liability for the safe delivery of the customer’s cargo to its ultimate destination. When we provide contract logistics services, we may be responsible for losses related to inventory “shrinkage,” for which we limit our liability by purchasing insurance. We have, from time to time, made payments to our customers for

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claims related to our services. Should we experience an increase in the number of such claims or an increase in liability pursuant to claims or unfavorable resolutions of claims, our results could be adversely affected. There can be no assurance that our insurance coverage will provide us with adequate coverage for such claims or that the maximum amounts for which we are liable in connection with our services will not change in the future. In addition, significant increases in insurance costs could reduce our profitability.

The failure of our policies and procedures which are designed to prevent the unlawful transportation or storage of hazardous, explosive or illegal materials could subject us to large fines, penalties or lawsuits.

We are subject to a broad range of foreign and domestic (including state and local) environmental, health and safety and criminal laws and regulations, including those governing discharges into the air and water, the storage, handling and disposal of solid and hazardous waste and the shipment of explosive or illegal substances. In the course of our operations, we may be asked to arrange for the storage or transportation of substances defined as hazardous under applicable laws. As is the case with any such operation, if a release of hazardous substances occurs on or from our facilities or from the transporter, we may be required to participate in the remedy of, or otherwise bear liability for, such release or be subject to claims from third parties whose property or person is injured by the release. In addition, if our employees arrange for the storage or transportation of hazardous, explosive or illegal materials in violation of applicable laws or regulations, we may face civil or criminal fines or penalties, including bans on making future shipments in particular geographic areas. In the event we are found to not be in compliance with applicable environmental, health and safety laws and regulations or there is a future finding that our policies and procedures fail to satisfy requisite minimum safeguards or otherwise do not comply with applicable laws or regulations, we could be subject to large fines, penalties or lawsuits.

If we fail to comply with applicable governmental regulations, we could be subject to substantial fines or revocation of our permits and licenses.

Our air transportation activities in the United States are subject to regulation by the Department of Transportation as an indirect air carrier and by the Federal Aviation Administration (FAA). We are also subject to security measures and strict shipper and customer classifications by the new Transportation Security Administration (TSA) and the FAA. We anticipate new security requirements regarding the handling of airfreight in the near term. Our overseas offices and agents are licensed as airfreight forwarders in their respective countries of operation, as necessary. We are accredited in each of our offices by the International Air Transport Association (IATA) or the Cargo Network Services Corporation, a subsidiary of the IATA, as a registered agent. Our indirect air carrier status is also subject to the Indirect Air Carrier Standard Security Program administered by the TSA. We are licensed as a customs broker by the United States Customs Service of the Department of the Treasury in each United States customs district in which we do business. All United States customs brokers are required to maintain prescribed records and are subject to periodic audits by the United States Customs Service. As a certified party under the self-policing Customs-Trade Partnership against Terrorism, we are also subject to compliance with security regulations within the trade environment that are enforced by the United States Customs Service. We are also subject to regulations under the Container Security Initiative, which is administered by the United States Customs Service. Our foreign customs brokerage operations are licensed in and subject to the regulations of their respective countries.

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We are licensed as an ocean freight forwarder by and registered as an ocean transportation intermediary with the Federal Maritime Commission. The Federal Maritime Commission has established qualifications for shipping agents, including surety bonding requirements. The Federal Maritime Commission also is responsible for the economic regulation of non-vessel operating common carriers that contract for space and sell that space to commercial shippers and other non-vessel operating common carriers for freight originating or terminating in the United States. To comply with these economic regulations, vessel operators and non-vessel operating common carriers are required to publish tariffs that establish the rates to be charged for the movement of specified commodities into and out of the United States. The Federal Maritime Commission has the power to enforce these regulations by assessing penalties. For ocean shipments not originating or terminating in the United States, the applicable regulations and licensing requirements typically are less stringent than those that do originate or terminate in the United States.

As part of our contract logistics services, we operate owned and leased warehouse facilities. Our operations at these facilities include both warehousing and distribution services, and we are subject to various federal and state environmental, work safety and hazardous materials regulations, including those in South Africa related to the pharmaceutical industry.

We may experience an increase in operating costs, such as costs for security, as a result of governmental regulations that have been and will be adopted in response to terrorist activities and potential terrorist activities. No assurances can be given that we will be able to pass these increased costs on to our customers in the form of rate increases or surcharges. We cannot predict what impact future regulations may have on our business. Our failure to maintain required permits or licenses, or to comply with applicable regulations, could result in substantial fines or revocation of our operating permits and licenses.

If we are not able to sell container space that we purchase from ocean shipping lines and capacity that we charter from our carriers, we will not be able to recover our out-of-pocket costs and our profitability may suffer.

As an indirect ocean carrier or non-vessel operating common carrier, we contract with ocean shipping lines to obtain transportation for a fixed number of containers between various points during a specified time period at variable rates. As an airfreight forwarder, we occasionally charter aircraft capacity to meet peak season volume increases for our customers, particularly in Hong Kong and other locations in Asia. We then solicit freight from our customers to fill the ocean containers and air charter capacity. When we contract with ocean shipping lines to obtain containers and with air carriers to obtain charter aircraft capacity, we become obligated to pay for the container space or charter aircraft capacity that we purchase. If we are not able to sell all of our purchased container space or charter aircraft capacity, we will not be able to recover our out-of-pocket costs for such purchase of container space or charter aircraft capacity.

If we lose certain of our contract logistics customers or we cannot maintain adequate levels of utilization in our shared warehouses, then we may experience revenue losses and decreased profitability.

We anticipate that revenues from our contract logistics services will account for an increasing portion of our consolidated revenues and may continue to increase as we further develop and expand our contract logistics, distribution and outsourcing services. In some cases, we have entered into long-term commitments for facilities. We lease single-tenant warehouses and distribution facilities, which

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represent in the aggregate approximately 51,000 square feet, under leases with terms longer than the logistics services contracts we have with our customers. We are required to pay rent under these real property leases even if such customers decide not to renew or otherwise terminate their agreements with us and we are not able to obtain new customers for these facilities. As a result, our revenues and earnings may be adversely affected. In addition, if we experience a decline in demand for space in our shared warehouses, then our revenues and earnings may decline as we would continue to be obligated to pay the full amount of the underlying leases.

If we are not reimbursed for amounts which we advance for our customers, our net revenue and profitability may decrease.

We make significant disbursements on behalf of our customers for transportation costs concerning collect freight and customs duties and taxes and in connection with our performance of other contract logistics services. The billings to our customers for these disbursements may be several times larger than the amount of revenue and fees derived from these transactions. If we are unable to recover a significant portion of these disbursements or if our customers do not reimburse us for a substantial amount of these disbursements in a timely manner, we may experience net revenue losses and decreased profitability.

Our executive officers, directors and principal shareholders control a significant portion of our shares and their interests may be different than or conflict with yours.

Our current executive officers, directors and principal shareholders and their respective affiliates control a significant portion of our ordinary shares. As a result, these shareholders may be able to influence us and our affairs, including the election of directors and approval of significant corporate transactions. This concentration of ownership also may delay, defer or prevent a change in control of our company, and make some transactions more difficult or impossible without the support of these shareholders. These transactions might include proxy contests, mergers, tender offers, open market purchase programs or other purchases of our ordinary shares that could give our shareholders the opportunity to realize a premium over the then-prevailing market price of our ordinary shares.

It may be difficult for our shareholders to effect service of process and enforce judgments obtained in United States courts against us or our directors and executive officers who reside outside of the United States.

We are incorporated in the British Virgin Islands. Several of our directors and executive officers reside outside the United States, and a majority of our assets are located outside the United States. As a result, we have been advised by legal counsel in the British Virgin Islands that it may be difficult or impossible for our shareholders to effect service of process upon, or to enforce judgments obtained in United States courts against, us or our directors and executive officers, including judgments predicated upon the civil liability provisions of the federal securities laws of the United States.

Because we are incorporated under the laws of the British Virgin Islands, it may be more difficult for our shareholders to protect their rights than it would be for a shareholder of a corporation incorporated in another jurisdiction.

Our corporate affairs are governed by our Memorandum and Articles of Association and by the International Business Companies Act of the British Virgin Islands. Principles of law relating to such matters as the validity of corporate procedures, the fiduciary duties of management and the rights of

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our shareholders may differ from those that would apply if we were incorporated in the United States or another jurisdiction. The rights of shareholders under British Virgin Islands law are not as clearly established as are the rights of shareholders in many other jurisdictions. Thus, you may have more difficulty protecting your interests in the face of actions by our board of directors or our principal shareholders than you would have as shareholders of a corporation incorporated in another jurisdiction.

Future issuances of preference shares could adversely affect the holders of our ordinary shares.

We are authorized to issue up to 100,000,000 preference shares, of which 50,000,000 have been designated as Class A preference shares and 50,000,000 have been designated as Class B preference shares. Our board of directors may determine the rights and preferences of the Class A and Class B preference shares within the limits set forth in our Memorandum and Articles of Association and applicable law. Among other rights, our board of directors may determine, without further vote or action by our shareholders, the dividend, voting, conversion, redemption and liquidation rights of our preference shares. Our board of directors may also amend our Memorandum and Articles of Association to create from time to time one or more classes of preference shares. The issuance of any preference shares could adversely affect the rights of the holders of ordinary shares, and therefore reduce the value of the ordinary shares. While currently no preference shares are outstanding, no assurances can be made that we will not issue preference shares in the future.

Our Memorandum and Articles of Association contain anti-takeover provisions which may discourage attempts by others to acquire or merge with us and which could reduce the market value of our ordinary shares.

Provisions of our Memorandum and Articles of Association may discourage attempts by other companies to acquire or merge with us, which could reduce the market value of our ordinary shares. Provisions in our Memorandum and Articles of Association may delay, deter or prevent other persons from attempting to acquire control of us. These provisions include:

•

the authorization of our board of directors to issue preference shares with such rights and preferences determined by the board, without the specific approval of the holders of ordinary shares,

•

our board of directors is divided into three classes each of which is elected in a different year,

•

the prohibition of action by the written consent of the shareholders,

•

the establishment of advance notice requirements for director nominations and actions to be taken at shareholder meetings, and

•

the requirement that the holders of two-thirds of the outstanding shares entitled to vote at a meeting are required to approve changes to specific provisions of our Memorandum and Articles of Association including those provisions described above and others which are designed to discourage non-negotiated takeover attempts.

In addition, our Memorandum and Articles of Association permits special meetings of the shareholders to be called only by our chief executive officer or our board of directors upon request by a majority of our directors or the written request of holders of more than 50 percent of our outstanding voting

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securities. Provisions of British Virgin Islands law to which we are subject could impede a merger, takeover or other business combination involving us or discourage a potential acquiror from making a tender offer or otherwise attempting to obtain control of us.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Foreign Exchange Risk

The nature of our operations necessitates dealing in many foreign currencies. Our results are subject to fluctuations due to changes in exchange rates. We attempt to limit our exposure to changing foreign exchange rates through both operational and financial market actions. We provide services to customers in locations throughout the world and, as a result, operate with many currencies including the key currencies of North America, Latin America, Africa, Asia Pacific and Europe.

Our short-term exposures to fluctuating foreign currency exchange rates are related primarily to intercompany transactions. The duration of these exposures is minimized through our use of an intercompany netting and settlement system that settles all of our intercompany trading obligations once per month. In addition, selected exposures are managed by financial market transactions in the form of forward foreign exchange contracts (typically with maturities at the end of the month following the purchase of the contract). Forward foreign exchange contracts are primarily denominated in the currencies of our principal markets. We will normally generate foreign exchange gains and losses through normal trading operations. We do not enter into derivative contracts for speculative purposes.

We do not hedge our foreign currency exposure in a manner that would entirely eliminate the effects of changes in foreign exchange rates on our consolidated net income.

Interest Rate Risk

We are subject to changing interest rates because our debt consists primarily of short-term working capital lines. We do not undertake any specific actions to cover our exposure to interest rate risk and we are not a party to any interest rate risk management transactions. We do not purchase or hold any derivative financial instruments for trading or speculative purposes.

As of April 30, 2004, there had been no material changes in our exposure to market risks since January 31, 2004 as described in our annual report on Form 10-K on file with the SEC. For a discussion of the company’s market risks associated with foreign currencies and interest rates, see Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” of the company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2004.

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Item 4. Controls and Procedures

As of April 30, 2004, the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of the company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the company’s disclosure controls and procedures, as such term is defined under Rule 13a – 15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on that evaluation, the company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the company’s disclosure controls and procedures were effective as of the end of the period covered by this report at ensuring that required information will be disclosed on a timely basis in the company’s reports filed under the Exchange Act. No change in the company’s internal control over financial reporting has occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

From time to time, we are a defendant or plaintiff in various legal proceedings, including litigation arising in the ordinary course of our business. There were no material developments during the first quarter of fiscal 2005 in any of the legal proceedings previously disclosed under Item 3, “Legal Proceedings,” of the company’s annual report on Form 10-K for the fiscal year ended January 31, 2004 on file with the Securities and Exchange Commission except as set forth in the next paragraph. In accordance with SFAS No. 5, Accounting for Contingencies, we have not accrued for a loss contingency relating to the disclosed legal proceedings because we believe that, although unfavorable outcomes in the proceedings may be reasonably possible, they are not considered by management to be probable or reasonably estimable.

The previously disclosed legal proceeding with De La Rue International was settled on or about April 15, 2004 with no admittance of fault by either party and with the settlement payment required to be made by UTi’s insurer with no additional payment required to be made by UTi. De La Rue International, a former customer, had filed a complaint against us in the Superior Court of Gwinnett County, Georgia on April 21, 2003 alleging that we were negligent, that we breached our contractual obligations and that we fraudulently concealed the fact that three shipments in August and September 1999 were not properly and timely reported to U.S. Customs for clearance. The plaintiff was asking for damages in excess of $2.0 million.

Item 4. Submission of Matters to a Vote of Security Holders

A special meeting of the shareholders (members) of the company was held on February 27, 2004, to consider and vote upon a proposal to approve the UTi Worldwide Inc. 2004 Long-Term Incentive Plan. The proposal was approved as follows:

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Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

(b) Reports on Form 8-K

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	UTi Worldwide Inc.
Date: June 9, 2004	By:	/s/ Roger I. MacFarlane
		Roger I. MacFarlane
		Chief Executive Officer and Director

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EXHIBIT INDEX

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