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United Service Technologies Limited - Quarterly Results
Release Date: 08/06/2004 08:21:00 Code(s): USV
UNITED SERVICE TECHNOLOGIES LIMITED - QUARTERLY RESULTS
UNITED SERVICE TECHNOLOGIES LIMITED
(Incorporated in the British Virgin Islands)
JSE Code: USV
ISIN: ZAE000012431
QUARTERLY RESULTS
United Service Technologies Limited (`Uniserv`) is listed on the JSE Securities
Exchange SA. Their only interest is an investment in UTi Worldwide Inc.
(`UTi`), a global supply chain solutions provider, which is listed on Nasdaq
under the symbol UTIW. Uniserv holds approximately 30,0% of the equity in UTi.
An announcement by UTI in respect of its latest quarterly results was released
on NASDAQ this morning. The full text of this announcement is reproduced below.
UTi Worldwide Posts Record Quarterly Gross and Net Revenues and Net Income
All Geographic Regions Post Gains in Operating Income
RANCHO DOMINGUEZ, Calif., June 7, 2004 (PRIMEZONE) - UTi Worldwide Inc.
(Nasdaq:UTIW) today reported gains in gross and net revenues, operating income
and net income for the fiscal 2005 first quarter ended April 30, 2004, compared
with year-earlier results.
Gross revenues for the fiscal 2005 first quarter rose 50 percent to $489.6
million from $326.8 million in the corresponding prior-year period. Net revenues
for the current first quarter advanced 29 percent to $170.0 million from $131.4
million in the first quarter of fiscal 2004.
`First quarter results reflect another quarter of solid gains in gross and net
revenues across all service categories and geographic regions over the year-ago
comparable period,` said Roger I. MacFarlane, chief executive officer of Uti
Worldwide. `We are especially pleased with our sales efforts, which have driven
higher than expected organic growth rates.`
In the fiscal 2005 first quarter, airfreight forwarding net revenues increased
26 percent; ocean freight forwarding net revenues advanced 32 percent; customs
brokerage net revenues grew 26 percent; and contract logistics net revenues rose
30 percent, when compared with the results of the first quarter of fiscal 2004.
`Our operations in Europe continued the strong trends of the immediately
preceding fourth quarter, despite the weak economic conditions in the region,
and posted a 44 percent increase in net revenues for the quarter, compared with
the comparable period a year ago,` MacFarlane added. `UTi`s Asia Pacific
operations recorded a 23 percent increase in net revenues over the net revenues
for the comparable prior-year period, reflecting higher export volumes in the
region.
Africa reported net revenue gains of 38% as a result of increased volumes. The
Americas achieved net revenue gains of 20 percent, compared with the year-ago
first quarter. Gross and net revenues benefited from favorable exchange rates in
Europe, Asia and Africa when compared to the fiscal 2004 first quarter.`
Operating income increased 68 percent to $18.7 million in the fiscal 2005 first
quarter from $11.1 million in the prior-year comparable period. Operating
margin, which is operating income expressed as a percentage of net revenues,
rose to 11.0 percent in the first quarter for fiscal 2005, compared with 8.4
percent in the fiscal 2004 first quarter.
Net income for the fiscal 2005 first quarter advanced 60 percent to $12.8
million, or $0.40 per diluted share, compared with $8.0 million, or $0.26 per
diluted share, in the corresponding period a year ago.
`We attribute our ninth consecutive quarter of year-over-year improvements in
gross and net revenues, operating income and net income to the ongoing
commitment and focus of our worldwide team on UTi`s NextLeap initiatives,`
MacFarlane said. `Moreover, we believe the operating income gains in the current
first quarter demonstrate the operating leverage inherent in UTi`s global
network. This global platform and our expanding capabilities in contract
logistics enable us to deliver greater value to more of our customers as we
become their primary logistics partner. With these strategic assets, coupled
with the talent of our UTi team, we are confident that our vision of global
integrated logistics will become a reality for more and more of our customers.`
At April 30, 2004, the company reported total cash and cash equivalents, net of
outstanding bank lines of credit and short-term bank borrowings, of $123.9
million, compared with $137.2 million at January 31, 2004. The company used
approximately $4.9 million of cash to fund operating activities in the fiscal
2005 first quarter, which resulted from UTi`s higher business volumes.
Investor Conference Call
UTi management will host an investor conference call today, Monday, June 7,
2004, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company`s financials and
operations for the fiscal first quarter ended April 30, 2004. The call will be
open to all interested parties 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, Monday, June 7, through 5:00 p.m. PDT,
Thursday, June 10, by calling 888-286-8010 (domestic) or 617-801-6888
(international) and using the playback Passcode 72712103.
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.
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 strategies and NextLeap, its global network and its
expanding capabilities in contract logistics. 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; uncertainties and risks associated with the company`s operations in South
Africa; 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 amounts)
Three months ended
April 30,
2004 2003
(Unaudited)
Gross revenues:
Airfreight forwarding $ 227,991 $ 159,081
Ocean freight forwarding 137,073 74,322
Customs brokerage 18,581 15,034
Contract logistics 69,328 51,307
Other 36,655 27,044
Total gross revenues $ 489,628 $ 326,788
Net revenues:
Airfreight forwarding $ 56,763 $ 44,930
Ocean freight forwarding 21,231 16,058
Customs brokerage 17,913 14,265
Contract logistics 56,341 43,378
Other 17,741 12,788
Total net revenues 169,989 131,419
Staff costs 91,932 70,420
Depreciation and
amortization 3,900 3,468
Amortization of intangible
assets 181 148
Other operating expenses 55,291 46,290
Operating income 18,685 11,093
Interest income, net 173 136
Gains/(losses) on
foreign exchange 100 (129)
Pretax income 18,958 11,100
Provision for income
taxes (5,545) (2,684)
Income before minority
interests 13,413 8,416
Minority interests (620) (442)
Net income $ 12,793 $ 7,974
Basic earnings per
ordinary share $ 0.42 $ 0.26
Diluted earnings per
ordinary share $ 0.40 $ 0.26
Number of weighted-average
shares outstanding used
for per share
calculations:
Basic shares 30,614,969 30,156,469
Diluted shares 31,967,335 31,161,542
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
April 30, January 31,
2004 2004
(Unaudited)
ASSETS
Cash and cash equivalents $ 140,864 $ 156,687
Trade receivables, net 328,604 280,044
Deferred income tax assets 5,411 6,534
Other current assets 38,369 33,420
Total current assets 513,248 476,685
Property, plant and
equipment, net 54,553 54,421
Goodwill other intangible
assets, net 158,431 158,567
Investments 871 1,117
Deferred income tax assets 2,313 2,384
Other non-current assets 10,364 10,167
Total assets $ 739,780 $ 703,341
LIABILITIES & SHAREHOLDERS` EQUITY
Bank lines of credit $ 15,410 $ 18,180
Short-term borrowings 1,587 1,312
Current portion of capital
lease obligations 2,181 2,408
Trade payables and other
accrued liabilities 299,120 269,072
Income taxes payable 13,436 10,864
Deferred income tax
liabilities 75 256
Total current liabilities 331,809 302,092
Long-term borrowings 86 93
Capital lease obligations 7,433 7,326
Deferred income tax
liabilities 3,987 3,860
Retirement fund obligations 1,236 1,251
Minority interests 3,196 2,873
Commitments and contingencies
Shareholders` equity:
Common stock 319,337 318,409
Retained earnings 115,085 105,855
Accumulated other
comprehensive loss (42,389) (38,418)
Total shareholders` equity 392,033 385,846
Total liabilities and
shareholders` equity $ 739,780 $ 703,341
UTi Worldwide Inc.
Consolidated Statements of Cash Flows
(in thousands)
Three months ended
April 30,
2004 2003
(Unaudited)
OPERATING ACTIVITIES:
Net income $ 12,793 $ 7,974
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Stock compensation costs 33 45
Depreciation and
amortization 3,900 3,468
Amortization of intangible
assets 181 148
Deferred income taxes 97 4
Tax benefit relating to
exercise of stock options 204 -
Gain on disposal of property,
plant and equipment (143) (47)
Other 620 13
Changes in operating assets
and liabilities:
Increase in trade
receivables and other
current assets (52,736) (4,803)
Increase/(decrease) in
trade payables and
other current
liabilities 30,172 (6,691)
Net cash (used in)/provided
by operating activities (4,879) 111
INVESTING ACTIVITIES:
Purchases of property, plant
and equipment (3,579) (4,862)
Proceeds from disposal of
property, plant and equipment 1,220 225
Increase in other non-current
assets (852) (1,881)
Acquisitions of subsidiaries
and contingent earn-out
payments (2,857) (622)
Other (795) -
Net cash used in
investing activities (6,863) (7,140)
FINANCING ACTIVITIES:
Decrease in bank lines
of credit (2,769) (5,716)
Decrease in short-term
borrowings (175) (6,417)
Long-term borrowings
-- advanced - 3
Long-term borrowings
-- repaid (15) (97)
Repayments of capital
lease obligations (863) (748)
Decrease in minority
interests (144) -
Net proceeds from issuance
of ordinary shares 722 295
Net cash used in
financing activities (3,244) (12,680)
Net decrease in cash
and cash equivalents (14,986) (19,709)
Cash and cash equivalents
at beginning of period 156,687 168,125
Effect of foreign exchange
rate changes (837) (1,058)
Cash and cash equivalents
at end of period $ 140,864 $ 147,358
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three months ended April 30, 2004
(Unaudited)
Europe Americas Asia Africa Corporate Total
Pacific
Gross
revenue
from
external
customers $134,694 $127,671 $144,728 $ 82,535 $ - $489,628
Net
revenue $ 39,697 $ 68,703 $ 23,517 $ 38,072 $ - $169,989
Staff
costs 21,844 41,392 10,146 16,858 1,692 91,932
Depreciation
and
amortiza-
tion 1,170 806 590 973 361 3,900
Amortization
of
intangible
assets - 148 - 33 - 181
Other
operating
expenses 10,711 21,496 6,226 15,040 1,818 55,291
Operating
income/
(loss) $ 5,972 $ 4,861 $ 6,555 $ 5,168 $ (3,871) 18,685
Interest
income,
net 173
Gains on
foreign
exchange 100
Pretax income 18,958
Provision
for income
taxes (5,545)
Income before
minority interests $ 13,413
Three months ended April 30, 2003
(Unaudited)
Europe Americas Asia Africa Corporate Total
Pacific
Gross
revenue
from
external
customers $ 98,933 $103,114 $ 83,833 $ 40,908 $ - $326,788
Net
revenue $ 27,484 $ 57,299 $ 19,111 $ 27,525 $ - $131,419
Staff
costs 16,251 33,170 8,163 11,590 1,246 70,420
Depreciation
and
amortization 1,041 980 512 662 273 3,468
Amortization
of
intangible
assets - 148 - - - 148
Other
operating
expenses 8,517 19,594 4,907 12,204 1,068 46,290
Operating
income/
(loss) $ 1,675 $ 3,407 $ 5,529 $ 3,069 $ (2,587) 11,093
Interest
income,
net 136
Losses on
foreign
exchange (129)
Pretax income 11,100
Provision for
income taxes (2,684)
Income before
minority interests $ 8,416
UTi Worldwide Inc.
Supplemental Financial Information
(in thousands)
Three months ended
April 30,
2004 2003
(Unaudited)
Forwarding, Customs Brokerage & Other:
Gross revenue from
external customers $ 399,261 $ 259,046
Net revenue $ 99,844 $ 78,867
Staff costs 52,569 42,469
Depreciation and
amortization 2,513 2,311
Other operating expenses 28,032 23,396
Operating income $ 16,730 $ 10,691
Contract Logistics, Distribution & Other:
Gross revenue from
external customers $ 90,367 $ 67,742
Net revenue $ 70,145 $ 52,552
Staff costs 37,671 26,705
Depreciation and
amortization 1,026 884
Amortization of
intangible assets 181 148
Other operating expenses 25,441 21,826
Operating income $ 5,826 $ 2,989
CONTACT: UTi Worldwide Inc.
Lawrence R. Samuels
Senior Vice President, Chief Financial Officer
(310) 604-3311
PondelWilkinson Inc.
Cecilia Wilkinson/Angie Yang
(323) 866-6004
investor@pondel.com
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
CORPORATE FINANCE
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