updated 6/2/2011 10:47:06 AM ET 2011-06-02T14:47:06

LONG BEACH, Calif., June 2, 2011 (GLOBE NEWSWIRE) -- 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.

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.

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)

UTi Worldwide Inc.
Condensed Consolidated Statements of Income
(in thousands, except share and per share amounts)
   
  Three months ended April 30,
   2011   2010 
     
Revenues: (Unaudited) (Unaudited)
 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

 

UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
   
   April 30, 

 2011 
   January 31,

 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

 

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
 
 
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
   
  Three months ended April 30, 2011
  Freight Forwarding  

Contract

Logistics and 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  
 
 
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
   
  Three months ended April 30, 2010
  Freight Forwarding  

Contract

Logistics and 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  
 
 
UTi Worldwide Inc.
Geographic Reporting
(in thousands)
(Unaudited)
   
  Three months ended April 30, 2011
  Freight

Forwarding

Revenue
Contract

Logistics

and

Distribution

Revenue
Freight Forwarding

Net

Revenue
Contract

Logistics

and

Distribution

Net

Revenue
Operating

(Loss)/Income
Transformation

and facility

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  
  Freight

Forwarding

Revenue
Contract

Logistics

and

Distribution

Revenue
Freight

Forwarding

Net

Revenue
Contract

Logistics

and

Distribution

Net

Revenue
Operating

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  

 

UTi Worldwide Inc.
Supplemental Financial Information – Reconciliation to US GAAP
(in thousands, except per share amounts)
(Unaudited)
   
  Three months ended April 30, 2011
       
   US GAAP   Adjustment  Non

 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.

 
 
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.

 
   
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)

Add: Transformation financial system costs (8)
  4,849

1,612
  1%

—%
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.

 
CONTACT: Jeff Misakian
         Vice President, Investor Relations
         (562) 552-9417
         jmisakian@go2uti.com

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

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