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United Service Technologies Limited - Uti Worldwide Reports Eighth Consecutive
Release Date: 06/04/2004 10:20:05 Code(s): USV
UNITED SERVICE TECHNOLOGIES LIMITED - UTI WORLDWIDE REPORTS EIGHTH CONSECUTIVE
QUARTER OF YEAR-OVER-YEAR GROWTH IN REVENUE AND INCOME
United Service Technologies Limited
(Incorporated in the British Virgin Islands)
Registration number: 3896
Share code: USV
ISIN: ZAE000012431
("Uniserv")
Uniserv has as its only investment a 30% interest in UTi Worldwide Inc. ("UTi"),
a global supply chain solutions provider, which is listed on Nasdaq under the
symbol UTIW. An announcement by UTi in respect of its fiscal 2004 fourth
quarter results was released on Nasdaq this morning, 6 April 2004. The full
text of this announcement is reproduced below:
"UTi WORLDWIDE REPORTS EIGHTH CONSECUTIVE QUARTER OF YEAR-OVER-YEAR GROWTH IN
REVENUE AND INCOME
-- NextLeap Strategy Drives 23% Increase in Net Revenue for Fourth Quarter
Fiscal 2004 --
Rancho Dominguez, California - April 6, 2004 - UTi Worldwide Inc. (NASDAQ NM:
UTIW) today reported strong financial results for the three- and twelve-month
periods ended January 31, 2004, reflecting solid gains in gross and net revenue,
operating income and net income, over comparable year-earlier results.
For the fiscal 2004 fourth quarter, gross revenues increased 23 percent to
$415.3 million from $338.1 million in the corresponding period last fiscal year.
Net revenues for the fiscal 2004 fourth quarter totaled $163.3 million, up 23
percent from $132.8 million in the fourth quarter of fiscal 2003.
"Once again, UTi achieved solid gains in gross and net revenues across all
service categories over the prior-year comparable period," said Roger I.
MacFarlane, chief executive officer of UTi Worldwide. "Our airfreight forwarding
operations continued to perform well, posting a 26 percent increase in net
revenues from last fiscal year"s fourth quarter, which included one month of
heightened airfreight volumes related to last year"s West Coast port lock-out.
We are also pleased that airfreight yields for the fiscal 2004 fourth quarter
remained level with the immediately preceding third quarter at 27 percent, as
compared with 26 percent in the fiscal 2003 fourth quarter."
In the fiscal 2004 fourth quarter, ocean freight forwarding net revenues
advanced 17 percent; customs brokerage net revenues grew 6 percent; and contract
logistics net revenues rose 19 percent, when compared with the year-ago fiscal
fourth quarter.
"All geographic regions of UTi"s global network contributed to gross revenue and
net revenue gains in the fourth quarter of fiscal 2004, over the prior-year
comparable period," MacFarlane said. "Our Asia Pacific operations posted a 21
percent increase in net revenues. Despite weak economic conditions in Europe,
our operations in this region delivered growth of 44 percent in net revenues for
the quarter, helped by a decline in the U.S. dollar, compared with last year.
Currency exchange rates also boosted Africa"s results, which posted a 45 percent
increase in net revenues in the fiscal 2004 fourth quarter when compared to the
prior year comparable period. The Americas recorded net revenue gains of 5
percent from the year-ago fourth quarter."
Operating income in the fiscal 2004 fourth quarter increased 26 percent to $15.0
million from $11.9 million in the prior-year fourth quarter. Operating margin,
which is operating income expressed as a percentage of net revenues, equaled 9.2
percent in the fourth quarter, compared with 9.0 percent in the fiscal 2003
fourth quarter.
Net income for the fiscal 2004 fourth quarter rose 67 percent to $12.2 million,
or $0.38 per diluted share, based on 31.7 million weighted average shares
outstanding. The fiscal 2004 fourth quarter benefited by a change in the
estimated effective tax rate for the fiscal year which resulted in an increase
in net income of approximately 3 cents per diluted share. In the prior-year
fourth quarter, the company recorded net income of $7.3 million, or $0.26 per
diluted share, based on 28.7 million weighted average shares outstanding. UTi"s
secondary offering of 4.6 million ordinary shares in December 2002 resulted in
11 percent more weighted average shares outstanding for the fiscal 2004 fourth
quarter, compared with the corresponding prior-year period.
"We are extremely proud of the solid execution made in our eighth quarter since
beginning our five-year strategic NextLeap journey," said MacFarlane. "NextLeap
continues to guide the path for all our initiatives at UTi, and quarter by
quarter, the global UTi team has delivered greater value to new and existing
customers, and increases in revenues, operating income and net income, compared
with year-earlier results."
Full Year Review
For the year ended January 31, 2004, gross revenues advanced 28 percent to $1.5
billion from $1.2 billion a year ago. Net revenues for fiscal 2004 totaled
$596.1 million, a 47 percent increase over $404.8 million last year. Standard
Corporation, which was acquired effective October 2002, contributed to both
gross and net revenues for the last quarter of fiscal 2003, compared with its
contribution for the full twelve months in fiscal 2004.
Operating income for the year totaled $59.1 million, a 30 percent increase over
$45.5 million in fiscal 2003. Operating margin (operating income expressed as a
percentage of net revenues) equaled 9.9 percent in the current twelve-month
period, compared with 11.2 percent a year ago, reflecting the impact of a full
year"s contribution from Standard, which traditionally operates at a lower
operating margin when compared to other UTi operations.
Net income for fiscal 2004 rose 53 percent to $44.8 million, compared with $29.3
million a year earlier. On a per share basis, net income climbed to $1.42 per
diluted share, based on 31.5 million weighted average shares outstanding, from
$1.11 per diluted share, based on 26.5 million weighted average shares
outstanding, in fiscal 2003.
MacFarlane added: "Fiscal 2004 results underscore the soundness of UTi"s vision
of global integrated logistics. As we look back on the first two years of our
NextLeap journey, we are proud of the accomplishments made by the UTi team in
building a strong platform designed to support growth on many levels for years
to come. Emblematic of NextLeap"s influence on our success is our recent
introduction of eMpower5, UTi"s proprietary information technology system that
provides global visibility across all facets for our customers" supply chains in
one application view. We believe we are well positioned to continue making
progress as we focus on global integrated logistics solutions and becoming the
primary logistics partner with more of our strategic customers."
At January 31, 2004, the company reported total cash and cash equivalents, net
of outstanding bank lines of credit and short-term bank borrowings, of $137.2
million, compared with $125.5 million at January 31, 2003.
About UTi Worldwide
UTi Worldwide Inc. is an international, non-asset based global integrated
logistics company providing air and ocean freight forwarding, contract
logistics, customs brokerage and other supply chain management services. The
company serves a large and diverse base of global and local companies, including
customers operating in industries with unique supply chain requirements such as
the pharmaceutical, 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 customers"
global supply chains.
Investor Conference Call
UTi management will host an investor conference call today, Tuesday, April 6,
2004, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company"s financials and
operations for the fourth quarter and year ended January 31, 2004. The call
will be open to all interested investors through a live, listen-only audio Web
broadcast via the Internet at www.go2uti.com and www.fulldisclosure.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 10:00 a.m. PDT, Tuesday, April 6,
through 5:00 p.m. PDT, Friday, April 9, by calling 800-633-8284 (domestic) or
402-977-9140 (international) and using Reservation No. 21190318.
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 statements may include, but are not limited to, the
company"s discussion of its growth strategy and integration of acquisitions.
Many important factors may cause the company"s actual results to differ
materially from those discussed in any such forward-looking statements,
including increased competition; integration risks associated with acquisitions;
the effects of 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 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. Although
UTi believes that the assumptions underlying the forward-looking statements are
reasonable, any of the assumptions could prove inaccurate and, therefore, there
can be no assurance that the results contemplated in forward-looking statements
will be realized. 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. The historical results achieved by the
company are not necessarily indicative of its future prospects. UTi undertakes
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
UTi Worldwide Inc.
Condensed Consolidated Income Statements
(in thousands, except share and per share amounts)
Three months ended Twelve months ended
January 31, January 31,
2004 2003 2004 2003
(Unaudited)
Gross revenues:
Airfreight $198,488 $164,406 $720,689 $621,905
forwarding
Ocean freight 104,023 74,464 360,253 283,869
forwarding
Customs brokerage 18,429 17,448 67,859 64,221
Contract logistics 60,354 49,973 229,709 101,294
Other 34,042 31,771 124,365 98,771
Total gross $415,336 $338,062 $1,502,875 $1,170,060
revenues
Net revenues:
Airfreight $53,446 $42,450 $198,822 $157,493
forwarding
Ocean freight 21,028 18,039 75,131 66,554
forwarding
Customs brokerage 17,714 16,682 65,532 61,105
Contract logistics 51,784 43,367 192,969 79,517
Other 19,346 12,261 63,687 40,121
Total net 163,318 132,799 596,141 404,790
revenues
Staff costs 86,967 68,927 318,727 204,971
Depreciation and 4,056 3,557 14,806 11,174
amortization
Amortization of 179 128 663 198
intangible assets
Other operating 57,149 48,278 202,874 142,942
expenses
Operating income 14,967 11,909 59,071 45,505
Interest 74 (60) 1,041 (486)
income/(expense), net
Losses on foreign (329) (1,016) (341) (1,725)
exchange
Pretax income 14,712 10,833 59,771 43,294
Provision for income (2,230) (3,307) (13,403) (12,492)
taxes
Income before minority 7,526 46,368 30,802
interests 12,482
Minority interests (279) (198) (1,597) (1,508)
Net income $12,203 $7,328 $44,771 $29,294
Basic earnings per $0.40 $0.26 $1.48 $1.13
ordinary share
Diluted earnings per $0.38 $0.26 $1.42 $1.11
ordinary share
Number of weighted-
average shares
outstanding used for
per share calculations
Basic shares 30,454,062 27,740,029 30,291,543 25,932,164
Diluted shares 31,745,844 28,673,009 31,479,887 26,504,401
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
As of January 31,
2004 2003
Assets
Cash and cash equivalents $156,687 $168,125
Trade receivables, net 280,044 247,893
Deferred income tax assets 6,534 1,592
Other current assets 33,420 30,492
Total current assets 476,685 448,102
Property, plant and equipment, net 54,421 44,566
Goodwill and other intangible assets, net 158,567 125,641
Investments 1,117 847
Deferred income tax assets 2,384 1,227
Other non-current assets 10,167 6,692
Total assets $703,341 $627,075
Liabilities & Shareholders" Equity
Bank lines of credit $18,180 $33,458
Short-term borrowings 1,312 9,121
Current portion of capital lease obligations 2,408 2,539
Trade payables and other accrued liabilities 269,072 236,548
Income taxes payable 10,864 8,083
Deferred income tax liabilities 256 489
Total current liabilities 302,092 290,238
Long-term borrowings 93 199
Capital lease obligations 7,326 7,111
Deferred income tax liabilities 3,860 1,643
Retirement fund obligations 1,251 1,016
Minority interests 2,873 2,699
Commitments and contingencies
Shareholders" equity:
Common stock 318,409 311,161
Retained earnings 105,855 63,973
Accumulated other comprehensive loss (38,418) (50,965)
Total shareholders" equity 385,846 324,169
Total liabilities and shareholders" equity $703,341 $627,075
UTi Worldwide Inc.
Consolidated Statements of Cash Flows
(in thousands)
Twelve months ended
January 31,
2004 2003
Operating Activities:
Net income $44,771 $29,294
Adjustments to reconcile net income to net
cash provided by operating activities:
Stock compensation costs 798 182
Depreciation and amortization 14,806 11,174
Amortization of intangible assets 663 198
Deferred income taxes 847 423
Tax benefit relating to exercise of stock 836 -
options
Gain on disposal of property, plant and 171 110
equipment
Other 1,395 1,329
Changes in operating assets and liabilities:
Increase in trade receivables and other (10,172) (23,564)
current assets
Increase in trade payables and other 11,743 30,456
current liabilities
Net cash provided by operating activities 65,858 49,602
Investing Activities:
Purchases of property, plant and equipment (18,720) (13,572)
Proceeds from disposal of property, plant and 889 430
equipment
Increase in other non-current assets (1,674) -
Acquisitions of subsidiaries and contingent (30,288) (62,944)
earn-out payments
Other (587) (599)
Net cash used in investing activities (50,380) (76,685)
Financing Activities:
(Decrease)/increase in bank lines of credit (15,278) 12,396
Decrease in short-term borrowings (7,421) (3,727)
Long-term borrowings - repaid (146) (204)
Capital lease obligations - repaid (3,444) (3,068)
Decrease in minority interests (1,296) (1,028)
Proceeds from issuance of ordinary shares 5,614 100,836
Dividends paid (2,889) (1,929)
Net cash (used in)/provided by financing (24,860) 103,276
activities
Net (decrease)/increase in cash and cash (9,382) 76,193
equivalents
Cash and cash equivalents at beginning of 168,125 87,594
period
Effect of foreign exchange rate changes (2,056) 4,338
Cash and cash equivalents at end of period $156,687 $168,125
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three months ended January 31, 2004
(Unaudited)
Europe Americas Asia Africa Corporate Total
Pacific
Gross
revenue from $116,128 $112,357 $132,065 $54,786 $- $415,336
external
customers
Net revenue $38,525 $63,711 $22,688 $38,394 $- $163,318
Staff costs 21,064 38,170 10,101 16,008 1,624 86,967
Depreciation 1,215 984 602 897 358 4,056
and
amortization
Amortization - 148 - 31 - 179
of
intangible
assets
Other 13,088 20,927 5,743 16,443 948 57,149
operating
expenses
Operating $3,158 $3,482 $6,242 $5,015 $(2,930) 14,967
income/
(loss)
Interest 74
income, net
Losses on (329)
foreign
exchange
Pretax 14,712
income
Provision (2,230)
for income
taxes
Income $12,482
before
minority
interests
Three months ended January 31, 2003
(Unaudited)
Europe Americas Asia Africa Corporate Total
Pacific
Gross
revenue from $100,626 $105,101 $90,742 $41,593 $- $338,062
external
customers
Net revenue $26,829 $60,692 $18,822 $26,456 $- $132,799
Staff costs 15,796 34,219 7,607 10,470 835 68,927
Depreciation 1,034 925 514 645 439 3,557
and
amortization
Amortization - 128 - - - 128
of
intangible
assets
Other 9,690 21,977 5,426 10,510 675 48,278
operating
expenses
Operating $309 $3,443 $5,275 $4,831 $(1,949) 11,909
income/
(loss)
Interest (60)
expense, net
Losses on (1,016)
foreign
exchange
Pretax 10,833
income
Provision (3,307)
for income
taxes
Income $7,526
before
minority
interests
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Twelve months ended January 31, 2004
Europe Americas Asia Africa Corporate Total
Pacific
Gross
revenue from $424,457 $449,381 $430,376 $198,661 $- $1,502,875
external
customers
Net revenue $129,404 $252,378 $86,489 $127,870 $- $596,141
Staff costs 73,814 147,201 36,708 55,667 5,337 318,727
Depreciation 4,415 3,976 2,140 3,088 1,187 14,806
and
amortization
Amortization - 594 - 69 - 663
of
intangible
assets
Other 40,125 84,760 21,755 51,264 4,970 202,874
operating
expenses
Operating $11,050 $15,847 $25,886 $17,782 $(11,494) 59,071
income/
(loss)
Interest 1,041
income, net
Losses on (341)
foreign
exchange
Pretax 59,771
income
Provision (13,403)
for income
taxes
Income $46,368
before
minority
interests
Twelve months ended January 31, 2003
Europe Americas Asia Africa Corpor- Total
Pacific ate
Gross
revenue from $372,515 $317,314 $337,430 $142,801 $- $1,170,060
external
customers
Net revenue $99,571 $143,484 $70,626 $91,109 $- $404,790
Staff costs 54,864 81,603 29,237 35,263 4,004 204,971
Depreciation 3,526 2,848 1,962 1,982 856 11,174
and
amortization
Amortization - 198 - - - 198
of
intangible
assets
Other 30,608 50,382 19,981 37,695 4,276 142,942
operating
expenses
Operating $10,573 $8,453 $19,446 $16,169 $(9,136) 45,505
income/
(loss)
Interest (486)
expense, net
Losses on (1,725)
foreign
exchange
Pretax 43,294
income
Provision (12,492)
for income
taxes
Income $30,802
before
minority
interests
UTi Worldwide Inc.
Supplemental Financial Information
(in thousands)
Three months ended Twelve months ended
January 31, January 31,
2004 2003 2004 2003
(Unaudited)
Forwarding,
Customs
Brokerage &
Other:
Gross revenue
from external $335,875 $269,580 $1,202,131 $1,008,874
customers
Net revenue $99,222 $80,103 $357,987 $296,266
Staff costs 51,165 39,746 187,753 148,843
Depreciation 2,607 2,362 9,713 8,280
and
amortization
Other operating 31,391 26,066 104,747 91,657
expenses
Operating $14,059 $11,929 $55,774 $47,486
income
Contract
Logistics,
Distribution &
Other:
Gross revenue
from external $79,461 $68,482 $300,744 $161,186
customers
Net revenue $64,096 $52,696 $238,154 $108,524
Staff costs 34,178 28,346 125,637 52,124
Depreciation 1,091 756 3,906 2,038
and
amortization
Amortization of 179 128 663 198
intangible
assets
Other operating 24,810 21,537 93,157 47,009
expenses
Operating $3,838 $1,929 $14,791 $7,155
income
Contacts:
Lawrence R. Samuels Cecilia Wilkinson/Angie Yang
Chief Financial Officer PondelWilkinson Inc.
UTi Worldwide Inc. 323.866.6004
310.604.3311 investor@pondel.com"
Johannesburg
6 April 2004
Sponsor
Rand Merchant Bank, a division of FirstRand Bank Limited, Corporate Finance
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