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8-K - 8-K - UTi WORLDWIDE INCc18316e8vk.htm
Exhibit 99.1
(UTI LOGO)
Contact:
Jeff Misakian
Vice President, Investor Relations
(562) 552-9417
jmisakian@go2uti.com
UTi WORLDWIDE REPORTS FISCAL 2012
FIRST QUARTER RESULTS
Long Beach, Calif., June 2, 2011 — UTi Worldwide Inc. (NASDAQ: UTIW) today reported financial results for its fiscal 2012 first quarter ended April 30, 2011.
Fiscal First Quarter 2012 vs. 2011 Results:
   
Revenues were $1,198.7 million, an increase of 14 percent from $1,055.2 million.
   
Net revenues (revenues minus purchased transportation costs) were $410.6 million, an increase of 12 percent from $365.7 million.
   
Net income attributable to UTi Worldwide Inc. was $8.7 million, or $0.08 per diluted share, in the first quarter of fiscal 2012.
   
Transformation and facility exit costs totaled $6.5 million, or $4.6 million after taxes, in the first quarter of fiscal 2012.
   
Excluding these costs, adjusted net income attributable to UTi Worldwide Inc. was $13.3 million, or $0.13 per diluted share, compared to $10.1 million, or $0.10 per diluted share.
Eric W. Kirchner, chief executive officer, said, “Net revenues in the fiscal 2012 first quarter increased over the same period last year primarily because of higher airfreight volumes and contract logistics activity. Airfreight volumes were strong as we continued to win new business in an improved market. Contract logistics and distribution revenues were higher in the first quarter due to an increase in existing business activity and new business. Net revenue per unit of cargo also increased in the first quarter, reflecting declines in carrier spot rates compared to the same period last year. Operating expenses in the fiscal 2012 first quarter included transformation-related costs as well as costs associated with the exit of certain underutilized contract logistics facilities in Europe. We view these actions as important steps toward achieving our long-term targets.”

 

 


 

Revenues increased 13.6 percent in the 2012 fiscal first quarter compared to the prior-year first quarter primarily due to increased airfreight volumes, higher fuel surcharges, which the company passes through to clients, and greater contract logistics activity. Net revenues increased 12.3 percent in the first quarter primarily due to increased volumes and higher net revenue per unit of cargo. Currency trends positively impacted both revenue and net revenue in the first quarter. On an organic, constant currency basis, adjusted net revenues increased 7.9 percent compared to the first quarter last year.
Operating expenses in the first quarter of fiscal 2012, excluding purchased transportation costs, were $391.8 million. The fiscal 2012 first quarter operating expenses include transformation costs of $3.6 million comprising severance of $2.0 million and costs related to the company’s new financial system of $1.6 million. In addition, the company recorded $2.9 million in severance and facility exit costs relating to the closure of underutilized contract logistics facilities in Europe described above. Excluding these items, which total $6.5 million, adjusted operating expenses in the fiscal 2012 first quarter were $385.3 million, an increase of 11.1 percent compared to the same period last year. On an organic, constant currency basis, adjusted operating expenses in the fiscal 2012 first quarter were 6.9 percent higher than the same period last year.
The company reported operating income in the fiscal 2012 first quarter of $18.8 million. Excluding the transformation and facility exit costs of $6.5 million described above, adjusted operating income was $25.3 million, which represented 6.2 percent of net revenues. This compares to operating income in the year-ago first quarter of $19.0 million, or 5.2 percent of net revenues. The adjusted operating income and margin increases primarily reflect the higher volumes and net revenue per unit of cargo improvement in freight forwarding, as well as increased volumes in contract logistics compared to the same period last year.
Investor Conference Call:
UTi management will host an investor conference call today, June 2, 2011, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company’s financial results for the fiscal 2012 first quarter. Investment professionals are invited to participate in the live call by dialing 800-762-8779 (domestic) or 480-629-9771 (international) using conference ID 4438598. The call will be open to all interested investors through a live, listen-only audio Internet broadcast at www.go2uti.com and www.earnings.com. For those who are not available to listen to the live broadcast, the call will be archived for one year at both Web sites. A telephonic playback of the conference call also will be available from approximately 11:00 a.m. PDT, today, through June 5, 2011, by calling 800-406-7325 (domestic) or 303-590-3030 (international) and using replay passcode 4438598.

 

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About UTi Worldwide:
UTi Worldwide Inc. is an international, non-asset-based supply chain services and solutions company providing air and ocean freight forwarding, contract logistics, customs brokerage, distribution, inbound logistics, truckload brokerage and other supply chain management services. The company serves a large and diverse base of global and local companies, including clients operating in industries with unique supply chain requirements such as the pharmaceutical, retail, apparel, chemical, automotive and technology industries. The company seeks to use its global network, proprietary information technology systems, relationships with transportation providers, and expertise in outsourced logistics services to deliver competitive advantage to each of its clients’ supply chains.
Use of Non-GAAP Financial Information:
This press release includes “non-GAAP financial measures” within the meaning of the Securities and Exchange Commission rules. UTi believes that meaningful analysis of its financial performance requires an understanding of the factors underlying that performance and the company’s judgments about the likelihood that particular factors will repeat. Short-term patterns and long-term trends may be obscured by the impact of certain items. For this reason, the company has referred to adjusted operating expenses, which are adjusted to exclude purchased transportation costs, as well as transformation and facility exit costs, and to adjusted net income and adjusted operating income, which are adjusted to exclude transformation and facility exit costs. The company also has referred to organic, constant-currency revenue and net revenue growth, which are adjusted to exclude the impact of acquisitions made since the beginning of the comparative period and the impact of currency fluctuations between comparable periods; and to organic, constant-currency adjusted operating expenses, which are adjusted to exclude purchased transportation costs, the impact of acquisitions made since the beginning of the comparative period and the impact of currency fluctuations between comparable periods. This information is among the information the company uses as a basis for evaluating company performance on a comparable basis over time, allocating resources and planning and forecasting of future periods. The company has also provided this information because such adjustments make performance information more comparable to prior disclosures for investors, and may enhance the ability of investors to analyze the company’s performance. This information is not intended to be considered in isolation or as a substitute for, or superior to, the relevant measures prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the tables at the end of this press release.

 

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Safe Harbor Statement:
Certain statements in this news release may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The company intends that all such statements be subject to the “safe-harbor” provisions contained in those sections. Such forward-looking statements may include, but are not limited to, the statements about the future impact of the company’s efforts to exit certain underutilized contract logistics facilities on the company’s margins, the outlook for the future and other statements not of an historical nature. Many important factors may cause the company’s actual results to differ materially from those discussed in any such forward-looking statements, including but not limited to the economic volatility that has materially impacted trade volumes, transportation capacity, pricing dynamics and overall margins; the financial condition of many of the company’s customers; planned or unplanned consequences of the company’s sales initiatives, procurement initiatives and business transformation efforts; the demand for the company’s services; the impact and related costs associated with reorganization efforts and/or cost reduction measures undertaken by the company; increased competition; the impact of volatile fuel costs and changes in foreign exchange rates; changes in the company’s effective tax rates; industry consolidation making it more difficult to compete against larger companies; general economic, political and market conditions, including those in Africa, Asia and EMENA; work stoppages or slowdowns or other material interruptions in transportation services; risks of international operations; risks associated with, and costs and expenses the company will incur as a result of, the ongoing publicly announced U.S. Department of Justice and other governmental investigations into the pricing practices of the air cargo transportation industry and other similar or related investigations and lawsuits; disruptions caused by epidemics, natural disasters, conflicts, wars and terrorism; and the other risks and uncertainties described in “Risk Factors” and “Forward-looking Statements” in the company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and described in the company’s other filings with the Securities and Exchange Commission. Although UTi believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, the company cannot assure the reader that the results contemplated in forward-looking statements will be realized in the timeframe anticipated or at all. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by UTi or any other person that UTi’s objectives or plans will be achieved. Accordingly, investors are cautioned not to place undue reliance on the company’s forward-looking statements. UTi undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
# # #
(Tables Follow)

 

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UTi Worldwide Inc.
Condensed Consolidated Statements of Income
(in thousands, except share and per share amounts)
                 
    Three months ended April 30,  
    2011     2010  
    (Unaudited)     (Unaudited)  
Revenues:
               
Airfreight forwarding
  $ 439,029     $ 367,692  
Ocean freight forwarding
    281,578       271,832  
Customs brokerage
    30,253       25,435  
Contract logistics
    198,979       177,010  
Distribution
    129,353       117,374  
Other
    119,513       95,813  
 
           
Total revenues
    1,198,705       1,055,156  
 
           
 
               
Operating expenses:
               
Purchased transportation costs:
               
Airfreight forwarding
    350,177       293,542  
Ocean freight forwarding
    234,235       227,186  
Customs brokerage
    1,554       1,570  
Contract logistics
    45,153       35,723  
Distribution
    87,859       79,117  
Other
    69,150       52,270  
 
               
Staff costs
    233,345       207,001  
Depreciation
    12,441       11,412  
Amortization of intangible assets
    3,455       3,344  
Severance and restructuring charges
    4,849        
Other operating expenses
    137,694       125,039  
 
           
Total operating expenses
    1,179,912       1,036,204  
 
           
Operating income
    18,793       18,952  
Interest expense, net
    (4,224 )     (4,119 )
Other income, net
    176        844  
 
           
Pretax income
    14,745       15,677  
Provision for income taxes
    4,235       4,936  
 
           
Net income
    10,510       10,741  
Net income attributable to noncontrolling interests
    1,767        667  
 
           
Net income attributable to UTi Worldwide Inc.
  $ 8,743     $ 10,074  
 
           
 
               
Basic earnings per common share attributable to UTi Worldwide Inc. common shareholders
  $ 0.09     $ 0.10  
 
               
Diluted earnings per common share attributable to UTi Worldwide Inc. common shareholders
  $ 0.08     $ 0.10  
 
               
Number of weighted-average common shares outstanding used for per share calculations
               
Basic shares
    102,110,811       100,071,923  
Diluted shares
    104,015,880       101,528,328  

 

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UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
                 
    April 30,     January 31,  
    2011     2011  
    (Unaudited)          
Assets
               
 
               
Cash and cash equivalents
  $ 304,997     $ 326,795  
Trade receivables, net
    1,027,723       879,842  
Deferred income taxes
    22,238       20,400  
Other current assets
    141,874       131,295  
 
           
Total current assets
    1,496,832       1,358,332  
 
               
Property, plant and equipment, net
    205,014       175,700  
Goodwill and other intangible assets, net
    537,522       515,578  
Investments
    1,159       1,102  
Deferred income taxes
    31,093       29,526  
Other non-current assets
    36,293       32,467  
 
           
 
               
Total assets
  $ 2,307,913     $ 2,112,705  
 
           
 
               
Liabilities & Equity
               
 
               
Bank lines of credit
  $ 198,910     $ 170,732  
Short-term borrowings
    7,724       7,238  
Current portion of long-term borrowings
    43,448       34,232  
Current portion of capital lease obligations
    16,673       16,232  
Trade payables and other accrued liabilities
    907,755       822,887  
Income taxes payable
    8,819       8,521  
Deferred income taxes
    3,976       3,881  
 
           
Total current liabilities
    1,187,305       1,063,723  
 
               
Long-term borrowings, excluding current portion
    72,160       61,230  
Capital lease obligations, excluding current portion
    19,179       19,158  
Deferred income taxes
    31,047       30,487  
Other non-current liabilities
    39,377       37,943  
 
               
Commitments and contingencies
               
 
               
UTi Worldwide Inc. shareholders’ equity:
               
Common stock
    489,193       484,884  
Retained earnings
    446,050       437,307  
Accumulated other comprehensive income/(loss)
    7,879       (35,116 )
 
           
Total UTi Worldwide Inc. shareholders’ equity
    943,122       887,075  
Noncontrolling interests
    15,723       13,089  
 
           
Total equity
    958,845       900,164  
 
           
 
               
Total liabilities and equity
  $ 2,307,913     $ 2,112,705  
 
           

 

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UTi Worldwide Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
                 
    Three months ended  
    April 30,  
    2011     2010  
    (Unaudited)  
 
               
Operating Activities:
               
Net income
  $ 10,510     $ 10,741  
Adjustments to reconcile net income to net cash used in operating activities:
               
Share-based compensation costs, net
    3,698       1,683  
Depreciation
    12,441       11,412  
Amortization of intangible assets
    3,455       3,344  
Amortization of debt issuance costs
    782       713  
Deferred income taxes
    (1,717 )     (859 )
Uncertain tax positions
    168       145  
Excess tax benefit from share-based compensation
    (398 )     (251 )
Loss on disposal of property, plant and equipment
    54       32  
Provision for doubtful accounts
    1,089       730  
Other
    398       239  
Net changes in operating assets and liabilities
    (74,113 )     (56,409 )
 
           
Net cash used in operating activities
    (43,633 )     (28,480 )
 
               
Investing Activities:
               
Purchases of property, plant and equipment
    (3,935 )     (5,064 )
Proceeds from disposal of property, plant and equipment
    906       488  
Purchases of software and other intangible assets
    (5,153 )     (587 )
Net increase in other non-current assets
    (1,620 )     (781 )
Other
    (4 )     (95 )
 
           
Net cash used in investing activities
    (9,806 )     (6,039 )
 
               
Financing Activities:
               
Net borrowings under bank lines of credit
    17,835       23,257  
Net increase in short-term borrowings
    57       963  
Proceeds from issuance of long-term borrowings
    198       55  
Repayment of long-term borrowings
    (1,787 )     (300 )
Repayment of capital lease obligations
    (4,373 )     (7,086 )
Contingent consideration paid
    (26 )      
Acquisition of noncontrolling interest
    (1,168 )      
Dividends paid to noncontrolling interests
    (157 )     (34 )
Net proceeds from issuance of ordinary shares
    1,334       3,189  
Excess tax benefit from share-based compensation
     398        251  
 
           
Net cash provided by financing activities
    12,311       20,295  
 
               
Effect of foreign exchange rate changes on cash and cash equivalents
    19,330       4,161  
 
           
Net decrease in cash and cash equivalents
    (21,798 )     (10,063 )
Cash and cash equivalents at beginning of period
    326,795       350,784  
 
           
 
               
Cash and cash equivalents at end of period
  $ 304,997     $ 340,721  
 
           

 

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UTi Worldwide Inc.
Segment Reporting

(in thousands)
(Unaudited)
                                 
    Three months ended April 30, 2011  
            Contract              
    Freight     Logistics and              
    Forwarding     Distribution     Corporate     Total  
 
                               
Revenues
  $ 829,753     $ 368,952     $     $ 1,198,705  
 
                       
 
                               
Purchased transportation costs
    645,250       142,878             788,128  
Staff costs
    109,667       116,713       6,965       233,345  
Depreciation
    4,388       7,394       659       12,441  
Amortization of intangible assets
    1,086       1,719       650       3,455  
Severance and restructuring charges
    1,973       2,876             4,849  
Other operating expense
    48,664       83,756       5,274       137,694  
 
                       
Total operating expenses
    811,028       355,336       13,548       1,179,912  
 
                       
 
                               
Operating income/(loss)
  $ 18,725     $ 13,616     $ (13,548 )     18,793  
 
                         
Interest expense, net
                            (4,224 )
Other income, net
                             176  
 
                             
Pretax income
                            14,745  
Provision for income taxes
                            4,235  
 
                             
Net income
                            10,510  
Net income attributable to noncontrolling interests
                            1,767  
 
                             
Net income attributable to UTi Worldwide Inc.
                          $ 8,743  
 
                             

 

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UTi Worldwide Inc.
Segment Reporting

(in thousands)
(Unaudited)
                                 
    Three months ended April 30, 2010  
            Contract              
    Freight     Logistics and              
    Forwarding     Distribution     Corporate     Total  
 
                               
Revenues
  $ 721,774     $ 333,382     $     $ 1,055,156  
 
                       
 
                               
Purchased transportation costs
    562,335       127,073             689,408  
Staff costs
    94,390       106,977       5,634       207,001  
Depreciation
    3,832       7,228       352       11,412  
Amortization of intangible assets
    1,030       2,314             3,344  
Other operating expenses
    46,370       73,024       5,645       125,039  
 
                       
Total operating expenses
    707,957       316,616       11,631       1,036,204  
 
                       
 
                               
Operating income/(loss)
  $ 13,817     $ 16,766     $ (11,631 )     18,952  
 
                         
Interest expense, net
                            (4,119 )
Other income, net
                            844  
 
                             
Pretax income
                            15,677  
Provision for income taxes
                            4,936  
 
                             
Net income
                            10,741  
Net income attributable to noncontrolling interests
                             667  
 
                             
Net income attributable to UTi Worldwide Inc.
                          $ 10,074  
 
                             

 

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UTi Worldwide Inc.
Geographic Reporting

(in thousands)
(Unaudited)
                                                 
    Three months ended April 30, 2011  
                            Contract                
            Contract             Logistics                
            Logistics     Freight     and                
    Freight     and     Forwarding     Distribution             Transformation  
    Forwarding     Distribution     Net     Net     Operating     and facility  
    Revenue     Revenue     Revenue     Revenue     (Loss)/Income     exit costs  
 
                                               
EMENA
  $ 273,831     $ 56,471     $ 64,970     $ 38,025     $ (3,571 )   $ 3,798  
Americas
    176,057       202,725       45,609       99,373       3,726       1,051  
Asia Pacific
    257,588       13,046       48,171       8,850       13,804        
Africa
    122,277       96,710       25,753       79,826       18,382        
Corporate
                            (13,548 )     1,612  
 
                                   
Total
  $ 829,753     $ 368,952     $ 184,503     $ 226,074     $ 18,793     $ 6,461  
 
                                   
                                         
    Three months ended April 30, 2010  
                            Contract        
            Contract             Logistics        
            Logistics     Freight     and        
    Freight     and     Forwarding     Distribution        
    Forwarding     Distribution     Net     Net     Operating  
    Revenue     Revenue     Revenue     Revenue     Income/(Loss)  
 
                                       
EMENA
  $ 230,394     $ 65,194     $ 58,813     $ 39,649     $ 2,787  
Americas
    150,100       173,304       40,772       90,531       4,888  
Asia Pacific
    255,062       9,187       38,737       6,620       8,885  
Africa
    86,218       85,697       21,117       69,509       14,023  
Corporate
                            (11,631 )
 
                             
Total
  $ 721,774     $ 333,382     $ 159,439     $ 206,309     $ 18,952  
 
                             

 

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UTi Worldwide Inc.
Supplemental Financial Information — Reconciliation to US GAAP

(in thousands, except per share amounts)
(Unaudited)
                         
    Three months ended April 30, 2011  
                    Non  
    US GAAP     Adjustment     US GAAP  
Revenue
  $ 1,198,705     $     $ 1,198,705  
 
                 
 
                       
Purchased transportation costs
    788,128             788,128  
Staff costs (1)
    233,345       (503 )     232,842  
Depreciation and amortization (1)
    12,441       (466 )     11,975  
Amortization of intangible assets
    3,455             3,455  
Severance and restructuring charges (2)
    4,849       (4,849 )      
Other operating expenses (1)
    137,694       (643 )     137,051  
 
                 
Operating income
    18,793       6,461       25,254  
Interest expense, net
    (4,224 )           (4,224 )
Other income, net
     176              176  
 
                 
Pretax income
    14,745       6,461       21,206  
Provision for income taxes
    4,235       1,856       6,091  
 
                 
 
                       
Net income
    10,510       4,605       15,115  
Net income attributable to noncontrolling interests
    1,767             1,767  
 
                 
Net income attributable to UTi Worldwide Inc.
  $ 8,743     $ 4,605     $ 13,348  
 
                 
 
                       
Basic earnings per share
  $ 0.09             $ 0.13  
Diluted earnings per share
  $ 0.08             $ 0.13  
     
(1)  
During the quarter ended April 30, 2011, the company recorded other transformation-related costs totaling $1,612 that are related to its new financial system. These costs are comprised of $503 of staff costs, amortization of capitalized software costs of $466 and consulting fees of $643.
 
(2)  
During the quarter ended April 30, 2011, the company recorded severance and restructuring charges totaling $4,849, which were comprised of $1,973 in severance costs related to transformation activities and $2,876 in severance and facility exit costs associated with the closure of certain underutilized contract logistics facilities in Europe.

 

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UTi Worldwide Inc.
Revenue Growth Reconciliation

(in thousands)
(Unaudited)
Set forth below is a reconciliation of our organic growth in our revenues and net revenues over the corresponding prior-year period.
                                 
    Revenues             Net Revenues          
 
                               
Three months ended April 30, 2010
  $ 1,055,156             $ 365,748          
Add: Acquisitions impact (3)
    2,634       %     192       %
Add: Currency impact (4)
    42,420       4 %     15,613       4 %
Organic growth
    98,495       9 %     29,024       8 %
 
                           
 
                               
Three months ended April 30, 2011
  $ 1,198,705             $ 410,577          
 
                           
     
(3)  
Relates to revenues and net revenues in the current period for businesses acquired from May 2010.
 
(4)  
Represents the fluctuations in foreign currency exchange rates when balances are translated on constant currency basis into U.S. dollars. The company makes constant currency computations using actual results computed at the foreign currency exchange rates for the comparative prior period.

 

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UTi Worldwide Inc.
Total Operating Expense Reconciliation

(in thousands)
(Unaudited)
Set forth below is a reconciliation of our organic growth in our operating expenses over the corresponding prior-year period.
                         
    Three months ended        
    April 30, 2011     April 30, 2010        
 
                       
Total operating expenses
  $ 1,179,912     $ 1,036,204          
Less: Purchased transportation costs
    788,128       689,408          
 
                   
Adjusted operating expenses
  $ 391,784       346,796          
 
                     
 
                       
Reconciliation of adjusted operating expenses
                       
Add: Acquisition impact (5)
            300       %
Add: Currency impact (6)
            14,385       4 %
Add: Severance and restructuring charges (7)
            4,849       1 %
Add: Transformation financial system costs (8)
            1,612       %
Add: Organic impact
            23,842       7 %
 
                     
Adjusted operating expenses for the three months ended April 30, 2011
          $ 391,784          
 
                     
     
(5)  
Relates to operating expenses in the current period for businesses acquired from May 2010.
 
(6)  
Represents the fluctuations in foreign currency exchange rates when balances are translated on constant currency basis into U.S. dollars. The company makes constant currency computations using actual results computed at the foreign currency exchange rates for the comparative prior period.
 
(7)  
Includes $1,973 in severance costs related to transformation activities and $2,876 in severance and other costs associated with the exit of certain underutilized contract logistics facilities in Europe.
 
(8)  
Represents other transformation-related costs associated with the company’s new financial system.

 

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