| Wed 8 Sep 2004, 10:25 | | UTi Worldwide Results For Fiscal 2005 Second Quart |
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Uniserv - UTi Worldwide Reports Record Results For Fiscal 2005 Second Quarter
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 30.3% 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 2005
second quarter results was released on Nasdaq today, 7 September 2004. The full
text of this announcement is reproduced below:
UTi WORLDWIDE REPORTS RECORD RESULTS FOR FISCAL 2005 SECOND QUARTER
Rancho Dominguez, California - September 7, 2004 - UTi Worldwide Inc. (NASDAQ
NM: UTIW) today reported strong financial results for its three-and six-month
periods ended July 31, 2004, posting another record quarter of gross and net
revenues and net income.
Gross revenues for the fiscal 2005 second quarter increased 49 percent to $540.4
million from $362.0 million in the prior-year comparable period. Net revenues
for the current second quarter rose 29 percent to $186.5 million from $144.9
million in the fiscal 2004 second quarter.
For the second quarter of fiscal 2005, UTi achieved a 27 percent increase in
airfreight forwarding net revenues; a 32 percent rise in ocean freight
forwarding net revenues; and a 29 percent improvement in contract logistics net
revenues, compared with the prior-year second quarter.
`We are pleased with the growth in UTi`s global business since the launch of our
NextLeap initiative 10 quarters ago,` said Roger I. MacFarlane, chief executive
officer of UTi Worldwide. `We believe this record underscores the soundness of
our five-year strategic plan and the customer-centric focus of UTi`s global
team.`
Operating income increased 56 percent to $23.5 million in the fiscal 2005 second
quarter from $15.0 million in the prior-year comparable period. Operating
margin, which is operating income expressed as a percentage of net revenues,
rose to 12.6 percent in the second quarter for fiscal 2005, compared with 10.4
percent in the fiscal 2004 second quarter.
`Our focus on improved operating margins is evident in the results as each of
our geographic regions made solid contributions to the growth in operating
income for the second quarter,` MacFarlane said.
UTi`s operations in Asia Pacific continued to deliver strong performance. The
region accounted for the largest contribution to operating income, with
operating income in the region increasing 32 percent in the second quarter of
fiscal 2005 over the prior-year second quarter on a 22 percent improvement in
net revenues. Europe posted a 140 percent increase in operating income in the
quarter, compared with the year-earlier second quarter, reflecting particularly
strong performances in Spain and Germany. The company attributed the more-than-
doubling of operating income in Europe, on a 42 percent increase in net
revenues, to improved operating efficiencies resulting from increased volumes
through UTi`s network of offices. Operating income in the second quarter of
fiscal 2005 in the Americas rose 34 percent on a 4 percent increase in net
revenues, compared with the fiscal 2004 second quarter. The company attributed
the improvement in operating margin in the Americas to increases in freight
forwarding in the region during the quarter and to the shedding of lower-margin
business in the contract logistics area. Africa, helped in part by the
acquisition of International Healthcare Distributors during the second quarter
of fiscal 2005, recorded a 46 percent gain in operating income over the prior-
year comparable period on a 77 percent increase in net revenues.
Net income for the fiscal 2005 second quarter advanced 42 percent to $16.2
million, or $0.51 per diluted share, from $11.4 million, or $0.36 per diluted
share, in the corresponding year-ago period.
`UTi`s fiscal 2005 second quarter exemplifies the adaptability of the company`s
business model as we achieved excellent results, primarily through organic
growth, across all business categories and geographic regions, despite a global
environment teeming with challenges, both geopolitical and economic,` MacFarlane
said. `We are particularly pleased with the improvement in operating margins and
strong net earnings gains for UTi. As we continue to strengthen our global
platform and expand our contract logistics capabilities, we believe we are
better positioned than ever to deliver greater value as we become the primary
logistics partner to more of our customers.`
For the first half of fiscal 2005, gross revenues rose 50 percent to $1.0
billion from $688.8 million for the same prior-year period. Net revenues were up
29 percent for the first half of fiscal 2005, totaling $356.5 million, compared
with $276.3 million in the comparable fiscal 2004 period. Operating income for
the year-to-date period rose 62 percent to $42.2 million from $26.1 million in
the prior-year comparable period. Operating income as a percentage of net
revenues improved to 11.8 percent for the current six-month period from 9.5
percent during the prior-year comparable period. Net income for the first half
of fiscal 2005 advanced 50 percent to $29.0 million, or $0.91 per diluted share,
from $19.4 million, or $0.62 per diluted share, for the first six months of
fiscal 2004.
At July 31, 2004, the company reported total cash and cash equivalents, net of
outstanding bank lines of credit and short-term bank borrowings, of $123.2
million, compared with $137.2 million at January 31, 2004. This decrease
reflects the cash used for the IHD acquisition, which was partially offset by
the $24.3 million of cash that the company generated through operating
activities in the year-to-date period ended July 31, 2004.
MacFarlane added: `We have enjoyed a healthy first half to the year, reflecting
our team`s focus on meeting customer needs while not losing sight of our
operating margin objectives. We have also benefited from generally improved
economic conditions, which we currently expect to continue for the remainder of
the year. However, our cautious optimism for prospects in the second half of
fiscal 2005 is tempered by several factors that will impinge 5
on costs, including our continued investment in rolling out eMpower to our
customers worldwide, as well as the escalating fees associated with meeting the
testing, compliance and control aspects of Sarbanes-Oxley.`
Investor Conference Call
UTi management will host an investor conference call today, Tuesday, September
7, 2004, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company`s financials
and operations for the fiscal second quarter ended July 31, 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.fu lldisclosure.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, September 7, through
5:00 p.m. PDT, Friday, September 10, by calling 888-286-8010 (domestic) or 617-
801-6888 (international) and using the playback pass code 91197298.
Changed Postal Address of U.S. Principal Executive Office The company`s postal
address of its principal executive office in the U.S. has been changed to 19500
Rancho Way, Suite 116, Rancho Dominguez, California 90220. The address for its
registered office in the British Virgin Islands remains unchanged.
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
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.
Condensed Consolidated Income Statements
(in thousands, except share and per share amounts)
Three months Six months
ended July 31, ended July 31,
2004 2003 2004 2003
Gross revenues:
Airfreight forwarding $ 243,443 $ 167,971 $ 471,434 $ 327,052
Ocean freight forwarding 159,702 88,589 296,775 162,911
Customs brokerage 18,273 17,207 36,854 32,241
Contract logistics 76,832 56,601 146,160 107,908
Other 42,109 31,657 78,764 58,701
Total gross revenues $ 540,359 $ 362,025 $ 1,029,987 $ 688,813
Net revenues:
Airfreight forwarding $ 61,090 $ 48,216 $ 117,853 $ 93,146
Ocean freight forwarding 24,977 18,931 46,208 34,989
Customs brokerage 17,824 16,183 35,737 30,448
Contract logistics 60,664 47,139 117,005 90,517
Other 21,948 14,390 39,689 27,178
Total net revenues 186,503 144,859 356,492 276,278
Staff costs 95,332 80,134 187,264 150,554
Depreciation and 4,625 3,751 8,525 7,219
amortization
Amortization of intangible 249 158 430 306
assets
Other operating expenses 62,767 45,778 118,058 92,068
Operating income 23,530 15,038 42,215 26,131
Interest income, net 126 373 299 509
(Losses)/gains on foreign (123) 453 (23) 324
exchange
Pretax income 23,533 15,864 42,491 26,964
Provision for income taxes (6,877) (4,070) (12,422) (6,754)
Income before minority 16,656 11,794 30,069 20,210
interests
Minority interests (442) (378) (1,062) (820)
Net income $ 16,214 $ 11,416 $ 29,007 $ 19,390
Basic earnings per ordinary $ 0.53 $ 0.38 $ 0.95 $ 0.64
share
Diluted earnings per $ 0.51 $ 0.36 $ 0.91 $ 0.62
ordinary share
Number of weighted-average
shares
outstanding used for per
share
calculations:
Basic shares 30,666,608 30,232,198 30,651,537 30,194,917
Diluted shares 32,097,535 31,432,216 32,040,727 31,306,056
Condensed Consolidated Balance Sheets
(in thousands)
July January 31,
31, 2004 2004
(Unaudited)
ASSETS
Cash and cash equivalents $ 150,444 $ 156,687
Trade receivables, net 388,017 280,044
Deferred income tax assets 6,288 6,534
Other current assets 35,060 33,420
Total current assets 579,809 476,685
Property, plant and equipment, net 62,002 54,421
Goodwill and other intangible assets, net 200,227 158,567
Investments 1,050 1,117
Deferred income tax assets 2,441 2,384
Other non-current assets 9,357 10,167
Total assets $ 854,886 $ 703,341
LIABILITIES & SHAREHOLDERS` EQUITY
Bank lines of credit $ 25,495 $ 18,180
Short-term borrowings 1,745 1,312
Current portion of capital lease obligations 2,428 2,408
Trade payables and other accrued liabilities 370,275 269,072
Income taxes payable 16,849 10,864
Deferred income tax liabilities 73 256
Total current liabilities 416,865 302,092
Long-term borrowings 1,541 93
Capital lease obligations 9,041 7,326
Deferred income tax liabilities 8,052 3,860
Retirement fund obligations 1,268 1,251
Minority interests 2,007 2,873
Commitments and contingencies
Shareholders` equity:
Common stock 320,610 318,409
Retained earnings 131,299 105,855
Accumulated other comprehensive loss (35,797) (38,418)
Total shareholders` equity 416,112 385,846
Total liabilities and shareholders` equity $ 854,886 $ 703,341
Consolidated Statements of Cash Flows
(in thousands)
Six months ended July
31,
Unaudited
2004 2003
OPERATING ACTIVITIES:
Net income $ 29,007 $ 19,390
Adjustments to reconcile net income to net cash
provided
by operating activities:
Stock compensation costs 92 87
Depreciation and amortization 8,525 7,219
Amortization of intangible assets 430 306
Deferred income taxes (832) 1,490
Tax benefit relating to exercise of stock options 203 -
Gain on disposal of property, plant and equipment (206) (47)
Other 1,062 820
Changes in operating assets and liabilities:
Increase in trade receivables and other current (93,477) (20,776)
assets
Increase in trade payables and other current 79,473 5,341
liabilities
Net cash provided by operating activities 24,277 13,830
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (9,537) (9,018)
Proceeds from disposal of property, plant and 1,586 312
equipment
Increase in other non-current assets (314) (1,077)
Acquisitions of subsidiaries and contingent earn-out (30,206) (8,044)
payments
Other (901) (170)
Net cash used in investing activities (39,372) (17,997)
FINANCING ACTIVITIES:
Increase/decrease in bank lines of credit 7,315 (1,653)
Decrease in short-term borrowings (1,057) (6,346)
Long-term borrowings - advanced 1,521 -
Long-term borrowings - repaid (77) (116)
Repayments of capital lease obligations (1,798) (1,739)
Decrease in minority interests (404) (327)
Net proceeds from issuance of ordinary shares 1,906 1,567
Dividends paid (3,563) (2,890)
Net cash provided by/used in financing activities 3,843 (11,504)
Net decrease in cash and cash equivalents (11,252) (15,671)
Cash and cash equivalents at beginning of period 156,687 168,125
Effect of foreign exchange rate changes 5,009 (2,880)
Cash and cash equivalents at end of period $ 150,444 $ 149,574
Segment Reporting
(in thousands)
Three months ended July 31, 2004
(Unaudited)
Europe Americas Asia
Pacific
Gross revenue from external
Customers $ 150,391 $ 134,100 $ 154,558
Net revenue $ 44,816 $ 67,972 $ 25,825
Staff costs 22,739 39,227 10,558
Depreciation and amortization 1,258 871 585
Amortization of intangible assets - 135 -
Other operating expenses 13,299 22,356 6,407
Operating income/(loss) $ 7,520 $ 5,383 $ 8,275
Interest income, net
Losses on foreign exchange
Pretax income
Provision for income taxes
Income before minority interests
Three months ended July 31, 2004
(Unaudited)
Africa Corporate Total
Gross revenue from external
Customers $ 101,310 $ - $ 540,359
Net revenue $ 47,890 $ - $ 186,503
Staff costs 20,940 1,868 95,332
Depreciation and amortization 1,398 513 4,625
Amortization of intangible assets 114 - 249
Other operating expenses 18,510 2,195 62,767
Operating income/(loss) $ 6,928 $ (4,576) 23,530
Interest income, net 126
Losses on foreign exchange (123)
Pretax income 23,533
Provision for income taxes (6,877)
Income before minority interests $ 16,656
Three months ended July 31, 2003
(Unaudited)
Europe Americas Asia
Pacific
Gross revenue from external customers $ 104,435 $ 114,281 $ 96,169
Net revenue $ 31,513 $ 65,147 $ 21,147
Staff costs 18,132 38,518 8,897
Depreciation and amortization 1,074 1,022 550
Amortization of intangible assets - 149 -
Other operating expenses 9,174 21,432 5,412
Operating income/(loss) $ 3,133 $ 4,026 $ 6,288
Interest income, net
Gains on foreign exchange
Pretax income
Provision for income taxes
Income before minority interests
Three months ended July 31, 2003
(Unaudited)
Africa Corporate Total
Gross revenue from external customers $ 47,140 $ - $ 362,025
Net revenue $ 27,052 $ - $ 144,859
Staff costs 13,198 1,389 80,134
Depreciation and amortization 742 363 3,751
Amortization of intangible assets 9 - 158
Other operating expenses 8,357 1,403 45,778
Operating income/(loss) $ 4,746 $ (3,155) 15,038
Interest income, net 373
Gains on foreign exchange 453
Pretax income 15,864
Provision for income taxes (4,070)
Income before minority interests $ 11,794
Segment Reporting
(in thousands)
Six months ended July 31, 2004
(Unaudited)
Europe Americas Asia
Pacific
Gross revenue from external
Customers $ 285,085 $ 261,771 $ 299,286
Net revenue $ 84,513 $ 136,675 $ 49,342
Staff costs 44,583 80,619 20,704
Depreciation and amortization 2,428 1,677 1,175
Amortization of intangible assets - 283 -
Other operating expenses 24,010 43,852 12,633
Operating income/(loss) $ 13,492 $ 10,244 $ 14,830
Interest income, net
Losses on foreign exchange
Pretax income
Provision for income taxes
Income before minority interests
Six months ended July 31, 2004
(Unaudited)
Africa Corporate Total
Gross revenue from external
Customers $ 183,845 $ - $ 1,029,987
Net revenue $ 85,962 $ - $ 356,492
Staff costs 37,798 3,560 187,264
Depreciation and amortization 2,371 874 8,525
Amortization of intangible assets 147 - 430
Other operating expenses 33,550 4,013 118,058
Operating income/(loss) $ 12,096 $ (8,447) 42,215
Interest income, net 299
Losses on foreign exchange (23)
Pretax income 42,491
Provision for income taxes (12,422)
Income before minority interests $ 30,069
Six months ended July 31, 2003
(Unaudited)
Europe Americas Asia
Pacific
Gross revenue from external
Customers $ 203,368 $ 217,395 $ 180,002
Net revenue $ 58,997 $ 122,446 $ 40,258
Staff costs 34,383 71,688 17,060
Depreciation and amortization 2,115 2,002 1,062
Amortization of intangible assets - 297 -
Other operating expenses 17,691 41,026 10,319
Operating income/(loss) $ 4,808 $ 7,433 $ 11,817
Interest income, net
Gains on foreign exchange
Pretax income
Provision for income taxes
Income before minority interests
Six months ended July 31, 2003
(Unaudited)
Africa Corporate Total
Gross revenue from external
Customers $ 88,048 $ - $ 688,813
Net revenue $ 54,577 $ - $ 276,278
Staff costs 24,788 2,635 150,554
Depreciation and amortization 1,404 636 7,219
Amortization of intangible assets 9 - 306
Other operating expenses 20,561 2,471 92,068
Operating income/(loss) $ 7,815 $ (5,742) 26,131
Interest income, net 509
Gains on foreign exchange 324
Pretax income 26,964
Provision for income taxes (6,754)
Income before minority interests $ 20,210
Supplemental Financial Information
(in thousands)
Three months Six months
ended July 31, ended July 31,
(Unaudited) (Unaudited)
2004 2003 2004 2003
Forwarding, Customs
Brokerage & Other:
Gross revenue from $ 440,529 $ 287,177 $ 839,790 $ 546,223
external customers
Net revenue $ 110,297 $ 86,374 $ 210,141 $ 165,241
Staff costs 54,599 45,940 107,168 88,409
Depreciation and 2,700 2,446 5,213 4,757
amortization
Other operating expenses 32,567 22,574 60,599 45,970
Operating income $ 20,431 $ 15,414 $ 37,161 $ 26,105
Contract Logistics,
Distribution & Other:
Gross revenue from $ 99,830 $ 74,848 $ 190,197 $ 142,590
external customers
Net revenue $ 76,206 $ 58,485 $ 146,351 $ 111,037
Staff costs 38,865 32,805 76,536 59,510
Depreciation and 1,412 942 2,438 1,826
amortization
Amortization of 249 158 430 306
intangible assets
Other operating expenses 28,005 21,801 53,446 43,627
Operating income $ 7,675 $ 2,779 $ 13,501 $ 5,768
Contacts:
Lawrence R. Samuels Cecilia Wilkinson/Angie Yang
Senior Vice President, PondelWilkinson Inc.
Chief Financial Officer
UTi Worldwide Inc. 310.279.5980
310.604.3311 investor@pondel.com
Date: 08/09/2004 07:00:47 AM
Produced by the JSE SENS Department
