LONG BEACH, Calif., March 24, 2011 (GLOBE NEWSWIRE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported financial results for its fiscal 2011 fourth quarter ended January 31, 2011.
Fiscal Fourth Quarter 2011 vs. 2010 Results:
- Revenues were $1,145.1 million, an increase of 15 percent from $991.5 million.
- Net revenues (revenues minus purchased transportation costs) were $404.5 million, an increase of 15 percent from $350.6 million.
- Operating income was $26.0 million, compared to $11.8 million.
- Net income attributable to UTi Worldwide Inc. was $14.5 million, or $0.14 per diluted share, compared to $1.5 million, or $0.02 per diluted share.
Eric W. Kirchner, chief executive officer, said, "Airfreight volumes increased more than we anticipated, while ocean freight volumes contracted in the fourth quarter against more challenging comparatives in the same period last year. Yields and net revenue per unit in the fourth quarter generally improved over last year and the previous quarter as carrier spot rates moderated, particularly in ocean freight. Contract logistics and distribution revenues were up in the fourth quarter, due to both an increase in existing business activity and new business wins. Operating expenses grew at a slower rate than net revenue, despite the fact that we incurred $2.6 million in costs associated with our new financial system. Our operating margin improved in the fourth quarter of fiscal 2011 over the same period last year, but it still remains below our long-term target."
Revenues and net revenues increased 15 percent in the 2011 fiscal fourth quarter compared to the prior-year fourth quarter primarily due to the increased airfreight and logistics volumes. Revenues also increased because of higher fuel surcharges, which the company passes through to clients.
Operating expenses in the fourth quarter of fiscal 2011, excluding purchased transportation costs, were $378.6 million, an increase of 12 percent compared to the same period last year. The increase primarily reflects expenses associated with revenue and shipment growth.
The company began expensing costs associated with its new financial system following the successful implementation in certain operations. As a result, operating expenses in the fourth quarter of fiscal 2011 included $2.6 million in related costs.
In the fourth quarter of fiscal 2010, the company recorded goodwill impairment and other charges totaling $6.7 million, which included goodwill impairment charges of $1.6 million, severance charges of $2.9 million and $2.2 million in other costs primarily associated with the exit of certain operations in smaller European countries.
The company reported operating income in the fiscal 2011 fourth quarter of $26.0 million, which represented 6.4 percent of net revenues. This compares to operating income in the year-ago fourth quarter of $11.8 million, or 3.4 percent of net revenues. The operating income and margin increases reflect the higher volumes and yield improvement in freight forwarding, as well as increased volumes in contract logistics compared to the same period last year.
The substantial increase in volumes and carrier rates in fiscal 2011 required significant additional working capital to fund duties and carrier costs on behalf of clients. Net cash provided by operations totaled $72.9 million in fiscal 2011, compared to net cash provided by operations of $120.0 million in fiscal 2010.
Kirchner added, "We have begun a process to simplify our organizational structure in order to pave the way for implementation of new standardized, global processes and systems. These actions are expected to result in severance and related costs throughout fiscal 2012. In addition, costs related to our new financial system of $8 million to $10 million are expected to be incurred this year. These costs will generate little benefit in fiscal 2012, but are expected to deliver benefits over the medium-to-long term when integrated with the new freight forwarding operating system. We anticipate modest volume growth in fiscal 2012, consistent with overall market forecasts, though the increase in the first half of the year is expected to be muted when compared to last year's unusually strong growth rates. The first quarter of the year also may be dampened by higher fuel costs, harsh winter weather, geopolitical events, and the near-term disruption caused by the tragic events in Japan.
"These near-term challenges aside, we are still targeting growth ahead of a market which has returned to historical levels, and is more stable than we have seen in recent years. The dynamics of supply and demand are more supportive of yield stability. And we continue to focus on operating efficiency, while we move forward aggressively in our transformation initiatives. These efforts are part of our strategy of achieving long-term growth and sustainable margin improvement."
Investor Conference Call:
UTi management will host an investor conference call today, March 24, 2011, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company's financial results for the fiscal 2011 fourth 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 4412887. 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. PDT, today, through March 27, 2011, by calling 800-406-7325 (domestic) or 303-590-3030 (international) and using replay passcode 4412887.
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:
The tables to this press release include "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, in the tables to this press release 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 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.
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 estimated growth in fiscal 2012 and the relative softness in anticipated growth in the first half of the year, the impact of macro-related conditions on the first quarter of fiscal 2012, the company's target of growing ahead of the market, the dynamics of supply and demand and their impact on yield stability, the company's strategy for achieving long-term growth and sustainable margin improvement, the timing and anticipated impact of various actions aimed at simplifying the company's organizational structure, including the expected severance and related costs arising therefrom, the amount and timing of charges relating to the company's new financial system, 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)
CONTACT: Jeff Misakian Vice President, Investor Relations (562) 552-9417 jmisakian@go2uti.com