LONG BEACH, Calif., Dec. 2, 2010 (GLOBE NEWSWIRE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported financial results for its fiscal 2011 third quarter ended October 31, 2010.
Fiscal Third Quarter 2011 vs. 2010 Results:
- Revenues were $1,198.4 million, an increase of 24 percent from $967.2 million.
- Net revenues (revenues minus purchased transportation costs) were $406.1 million, an increase of 12 percent from $361.5 million.
- Operating income was $43.9 million, an increase of 40 percent from $31.4 million.
- Net income attributable to UTi Worldwide Inc. was $26.4 million, or $0.26 per diluted share, compared to $18.0 million, or $0.18 per diluted share.
Eric W. Kirchner, chief executive officer, said, "Our improved third quarter performance was the result of higher volumes and greater operating efficiency, partially offset by lower yields. Volume growth, while still ahead of last year, moderated in the third quarter. Airfreight volumes remained robust primarily because of tight inventory levels, but comparisons have become more challenging. Ocean freight peaked in August, and then weakened in each subsequent month. Airfreight tonnage in the fourth quarter is expected to be at levels similar to last year, while ocean freight TEUs may be lower due to unseasonably high levels last year. Yield pressure also showed signs of moderation in the third quarter. Carrier spot rates were slightly more favorable as a result of declining demand and available capacity, and we continued to adjust our pricing in response to market conditions. While this is encouraging, the rate of yield improvement may not be sufficient to offset anticipated volume weakness in the fourth quarter.
"Our contract logistics and distribution business reported solid revenue growth and operating margins. Existing business was strong in consumer and retail sectors, partially offset by slowing volumes in automotive and technology."
Revenues increased 24 percent in the 2011 fiscal third quarter compared to the prior-year third quarter primarily due to the higher airfreight and ocean freight volumes. Net revenues increased 12 percent, less than the revenue increase principally because of yield pressure. On an organic, constant currency basis, adjusted net revenues increased 11 percent compared to the third quarter last year.
Operating expenses in the third quarter of fiscal 2011, excluding purchased transportation costs, were $362.2 million, an increase of 10 percent compared to the same period last year. The increase primarily reflects expenses associated with revenue growth. On an organic, constant currency basis, adjusted operating expenses in the fiscal 2011 third quarter were nine percent higher than the same period last year, less than the net revenue increase.
The company reported operating income in the fiscal 2011 third quarter of $43.9 million, which represented 10.8 percent of net revenues. This compares to operating income in the year-ago third quarter of $31.4 million, or 8.7 percent of net revenues. The operating income and margin increases reflect the higher volumes in freight forwarding and contract logistics, which were somewhat offset by lower yields in freight forwarding and distribution operations, compared to the same period last year.
The substantial increase in volumes and carrier rates during the first nine months of fiscal 2011 necessitated significant additional working capital to fund duties and carrier costs on behalf of clients. Net cash provided by operations totaled $11.7 million in the nine months ended October 31, 2010, compared to cash provided by operations of $51.6 million in the same period last year.
Investor Conference Call:
UTi management will host an investor conference call today, December 2, 2010, at 8:00 a.m. PST (11:00 a.m. EST) to review the company's financials and operations for the fiscal 2011 third quarter. Investment professionals are invited to participate in the live call by dialing 877-941-2332 (domestic) or 480-629-9722 (international) using conference ID 4375434. The call will be open to all interested investors through a live, listen-only audio Internet broadcast at www.go2uti.comand 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. PST, today, through December 5, 2010, by calling 800-406-7325 (domestic) or 303-590-3030 (international) and using replay passcode 4375434.
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 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 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.
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 company's discussion of the estimated airfreight and ocean freight volume trends in the company's fiscal fourth quarter, projected changes in yields and the potential impact thereof, projected growth rates, 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; the impact of sharply rising freight transportation rates on the company's net revenue; 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 of 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 the company's filings with the Securities and Exchange Commission. Although UTi believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, 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)
CONTACT: UTi Worldwide Inc. Jeff Misakian, Vice President, Investor Relations (562) 552-9417 jmisakian@go2uti.com