| Tue 7 Dec 2004, 15:43 | | Uti Worldwide Reports 51% Increase In Net Income |
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Uniserv - Uti Worldwide Reports 51% Increase In Net Income On 29% Increase In
Net Revenues For Fiscal 2005 Third Quarter Over Year-Earlier 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
third quarter results was released on Nasdaq today, 7 December 2004. The full
text of this announcement is reproduced below:
Contacts:
Lawrence R. Samuels Cecilia Wilkinson/Angie Yang
Senior Vice President, Chief Financial Officer PondelWilkinson Inc.
UTi Worldwide Inc. 310.279.5980
310.604.3311 investor@pondel.com
UTi WORLDWIDE REPORTS 51% INCREASE IN NET INCOME ON 29% INCREASE IN NET
REVENUES FOR FISCAL 2005 THIRD QUARTER OVER YEAR-EARLIER QUARTER
-- Third Quarter EPS Increases by 20 Cents Year-Over-Year to $0.62 per
Diluted Share --
Rancho Dominguez, California - December 7, 2004 - UTi Worldwide Inc. (NASDAQ
NM: UTIW) today reported increases in gross and net revenues and net income for
the three- and nine-month periods ended October 31, 2004 compared with
year-earlier results.
Gross revenues for the fiscal 2005 third quarter rose 51 percent to $602.5
million from $398.7 million in the corresponding prior-year period. Net
revenues grew 29 percent to $202.0 million from $156.5 million a year earlier.
Revenue growth for the fiscal 2005 period reflects improved performance across
all service categories.
Comparing the 2005 fiscal third quarter to the same period in fiscal 2004, UTi
posted a 28 percent increase in airfreight forwarding net revenues; a 32
percent rise in ocean freight forwarding net revenues; and growth of 32 percent
in contract logistics net revenues.
Operating income rose 49 percent to $26.7 million in the current fiscal third
quarter from $18.0 million in the corresponding year-earlier period. Operating
income as a percent of net revenues increased by 170 basis points to 13.2
percent in the current fiscal third quarter when compared to the prior-year
third fiscal quarter.
`UTi`s performance in the third quarter is indicative of the balanced strength
of our operations throughout the world,` said Roger I. MacFarlane, chief
executive officer of UTi Worldwide. `The operating improvement reflects the
company`s continued focus on operational productivity and increasing network
density to improve operating profit margin.
`After 11 quarters of our 20-quarter NextLeap strategic initiative, the UTi
team continues to realize the benefit of our focus on meeting customers`
evolving needs. Our results underscore UTi`s success at becoming the primary
logistics partner to more of our global customers and as a provider of
outsourced solutions in global integrated logistics,` MacFarlane said.
UTi`s global network also achieved gross and net revenue gains, as well as
operating income improvements over the prior-year third quarter across all
geographic regions. Asia Pacific, the largest contributor to gross revenues in
the fiscal 2005 third quarter, achieved gains as Asian exports to all the
world`s regions continued to expand.
The company`s Europe region saw continued improvement with a 37% increase in
both gross and net revenues, and productivity gains led to an almost doubling
of operating income in this region. The Americas region experienced growth in
freight forwarding exports and imports. In the Americas, the company completed
its acquisition of specialty contract logistics provider, Unigistix Inc.,
during the last month of the quarter. Net revenues grew fastest in the Africa
region, bolstered by a full quarter`s contribution from International
Healthcare Distributors Ltd. (IHD), which UTi acquired in June 2004.
Net income for the fiscal 2005 third quarter advanced 51 percent to $19.9
million, or $0.62 per diluted share, from $13.2 million, or $0.42 per diluted
share, in the fiscal 2004 third quarter.
For the nine-month period ended October 31, 2004, gross revenues advanced 50
percent to $1.6 billion from $1.1 billion for the same period a year ago. Net
revenues rose 29 percent to $558.5 million, up from $432.8 million in the
comparable prior-year period. Operating income for the current nine-month
period totaled $69.0 million, up 56 percent from $44.1 million in the first
nine months of the comparable prior-year period. Operating margin (operating
income as a percentage of net revenues) rose to 12.3 percent in the current
nine-month period, compared with 10.2 percent a year ago. Net income for the
fiscal 2005 nine-month period increased 50 percent to $48.9 million, or $1.52
per diluted share, from $32.6 million, or $1.04 per diluted share, in the
corresponding period a year ago.
At October 31, 2004, the company reported total cash and cash equivalents, net
of outstanding bank lines of credit and short-term bank borrowings, of $26.6
million, compared with $137.2 million at January 31, 2004. This decrease stems
principally from the acquisitions of Unigistix and IHD and from the increase in
working capital requirements to fund the scale of revenue growth achieved in
the third quarter. Historically, prior fourth fiscal quarters have generally
had lower working capital needs than third fiscal quarters.
`As we enter the fourth fiscal quarter, which includes the low freight months
of December and January, our UTi team`s uncompromising dedication to meeting
our customers` needs and improving operating performance bolsters our
confidence that UTi will close out fiscal 2005 well positioned for the
opportunities and challenges ahead,` MacFarlane added. `Nevertheless, we remain
cognizant of the increased costs associated with implementation of
Sarbanes-Oxley requirements as well as our investment in the development and
roll-out of our new supply chain technology solution, eMpower5.`
Investor Conference Call
UTi management will host an investor conference call today, Tuesday, December
7, 2004, at 8:00 a.m. PST (11:00 a.m. EST) to review the company`s financials
and operations for the third quarter ended October 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
approximately 10:00 a.m. PST, Tuesday, December 7, through 5:00 p.m. PST,
Friday, December 10, by calling 888-286-8010 (domestic) or 617-801-6888
(international) and using Reservation No. 57891971.
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 ability to meet customers` needs;
its role as a primary logistics partner and outsourced solution for global
integrated logistics; its expectations for working capital needs, free cash
flow, operating performance and delivery of new products; 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;
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 ended
October 31,
2004 2003
(Unaudited)
Gross revenues:
Airfreight forwarding $ 271,445 $ 195,149
Ocean freight forwarding 183,501 93,319
Customs brokerage 20,479 17,189
Contract logistics 83,432 61,447
Other 43,646 31,622
Total gross revenues $ 602,503 $ 398,726
Net revenues:
Airfreight forwarding $ 67,093 $ 52,230
Ocean freight forwarding 25,317 19,114
Customs brokerage 19,821 17,370
Contract logistics 67,082 50,668
Other 22,706 17,163
Total net revenues 202,019 156,545
Staff costs 102,236 81,206
Depreciation and amortization 4,950 3,531
Amortization of intangible assets 435 178
Other operating expenses 67,655 53,657
Operating income 26,743 17,973
Interest income, net 328 458
Losses on foreign exchange (3) (336)
Pretax income 27,068 18,095
Provision for income taxes (6,548) (4,419)
Income before minority interests 20,520 13,676
Minority interests (610) (498)
Net income $ 19,910 $ 13,178
Basic earnings per ordinary share $ 0.65 $ 0.43
Diluted earnings per ordinary share $ 0.62 $ 0.42
Number of weighted-average shares
outstanding used for per share
calculations:
Basic shares 30,760,187 30,301,508
Diluted shares 32,322,468 31,539,692
Nine months ended
October 31,
2004 2003
(Unaudited)
Gross revenues:
Airfreight forwarding $ 742,879 $ 522,201
Ocean freight forwarding 480,276 256,230
Customs brokerage 57,333 49,430
Contract logistics 229,592 169,355
Other 122,410 90,323
Total gross revenues $ 1,632,490 $ 1,087,539
Net revenues:
Airfreight forwarding $ 184,946 $ 145,376
Ocean freight forwarding 71,525 54,103
Customs brokerage 55,558 47,818
Contract logistics 184,087 141,185
Other 62,395 44,341
Total net revenues 558,511 432,823
Staff costs 289,500 231,760
Depreciation and amortization 13,475 10,750
Amortization of intangible assets 865 484
Other operating expenses 185,713 145,725
Operating income 68,958 44,104
Interest income, net 627 967
Losses on foreign exchange (26) (12)
Pretax income 69,559 45,059
Provision for income taxes (18,970) (11,173)
Income before minority interests 50,589 33,886
Minority interests (1,672) (1,318)
Net income $ 48,917 $ 32,568
Basic earnings per ordinary share $ 1.59 $ 1.08
Diluted earnings per ordinary share $ 1.52 $ 1.04
Number of weighted-average shares
outstanding used for per share
calculations:
Basic shares 30,688,019 30,236,777
Diluted shares 32,137,143 31,392,561
Condensed Consolidated Balance Sheets
(in thousands)
October 31, January 31,
2004 2004
(Unaudited)
ASSETS
Cash and cash equivalents $ 124,340 $ 156,687
Trade receivables, net 438,638 280,044
Deferred income tax assets 6,951 6,534
Other current assets 46,393 33,420
Total current assets 616,322 476,685
Property, plant and equipment, net 72,292 54,421
Goodwill and other intangible assets, net 280,962 158,567
Investments 1,133 1,117
Deferred income tax assets 2,444 2,384
Other non-current assets 10,146 10,167
Total assets $ 983,299 $ 703,341
LIABILITIES & SHAREHOLDERS` EQUITY
Bank lines of credit $ 96,002 $ 18,180
Short-term borrowings 1,727 1,312
Current portion of capital lease
obligations 2,727 2,408
Trade payables and other accrued
liabilities 389,053 269,072
Income taxes payable 18,897 10,864
Deferred income tax liabilities 68 256
Total current liabilities 508,474 302,092
Long-term borrowings 1,547 93
Capital lease obligations 9,176 7,326
Deferred income tax liabilities 9,841 3,860
Retirement fund obligations 1,363 1,251
Minority interests 2,655 2,873
Commitments and contingencies
Shareholders` equity:
Common stock 323,518 318,409
Retained earnings 151,209 105,855
Accumulated other comprehensive loss (24,484) (38,418)
Total shareholders` equity 450,243 385,846
Total liabilities and shareholders` equity $ 983,299 $ 703,341
Consolidated Statements of Cash Flows
(in thousands)
Nine months ended
October 31,
2004 2003
(Unaudited)
OPERATING ACTIVITIES:
Net income $ 48,917 $ 32,568
Adjustments to reconcile net income to net cash
provided
by operating activities:
Stock compensation costs 300 130
Depreciation and amortization 13,475 10,750
Amortization of intangible assets 865 484
Deferred income taxes 1,398 1,009
Tax benefit relating to exercise of stock options 1,101 --
(Gain)/loss on disposal of property, plant and
equipment (228) 194
Other 1,672 1,318
Changes in operating assets and liabilities:
Increase in trade receivables and other current
assets (139,031) (40,113)
Increase in trade payables and other current
liabilities 86,852 30,271
Net cash provided by operating activities 15,321 36,611
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (15,110) (13,759)
Proceeds from disposal of property, plant and
equipment 2,276 584
Increase in other non-current assets (1,020) (794)
Acquisitions of subsidiaries and contingent
earn-out payments (118,476) (14,269)
Other (680) (444)
Net cash used in investing activities (133,010) (28,682)
FINANCING ACTIVITIES:
Increase in bank lines of credit 77,822 893
Decrease in short-term borrowings (1,068) (6,368)
Long-term borrowings -- advanced 1,642 --
Long-term borrowings -- repaid (192) (130)
Repayments of capital lease obligations (2,952) (2,608)
Decrease in minority interests (410) (338)
Net proceeds from issuance of ordinary shares 3,708 2,523
Dividends paid (3,563) (2,890)
Net cash provided by/(used in) financing
activities 74,987 (8,918)
Net decrease in cash and cash equivalents (42,702) (989)
Cash and cash equivalents at beginning of period 156,687 168,125
Effect of foreign exchange rate changes 10,355 (1,246)
Cash and cash equivalents at end of period $ 124,340 $ 165,890
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Three months ended October 31, 2004
(Unaudited)
Europe Americas Asia Pacific
Gross revenue from external
customers $ 144,134 $ 149,962 $ 191,428
Net revenue $ 43,600 $ 72,631 $ 30,202
Staff costs 23,786 40,547 11,463
Depreciation and amortization 1,289 889 632
Amortization of intangible
assets -- 263 --
Other operating expenses 12,524 23,981 7,227
Operating income/(loss) $ 6,001 $ 6,951 $ 10,880
Interest income, net
Losses on foreign exchange
Pretax income
Provision for income taxes
Income before minority
interests
Three months ended October
31, 2004
(Unaudited)
Africa Corporate Total
Gross revenue from external
$ 116,979 $ -- $ 602,503
customers
$ 55,586 $ -- $ 202,019
Net revenue
Staff costs 24,356 2,084 102,236
Depreciation and amortization 1,727 413 4,950
Amortization of intangible assets 172 -- 435
Other operating expenses 21,558 2,365 67,655
$ 7,773 $ (4,862) 26,743
Operating income/(loss)
Interest income, net 328
Losses on foreign exchange (3)
Pretax income 27,068
Provision for income taxes (6,548)
Income before minority interests $ 20,520
Three months ended October 31, 2003
(Unaudited)
Europe Americas Asia Pacific
Gross revenue from external
customers $ 104,961 $ 119,629 $ 118,309
Net revenue $ 31,882 $ 66,221 $ 23,543
Staff costs 18,367 37,343 9,547
Depreciation and amortization 1,085 990 476
Amortization of intangible
assets -- 149 --
Other operating expenses 9,346 22,807 5,693
Operating income/(loss) $ 3,084 $ 4,932 $ 7,827
Interest income, net
Losses on foreign exchange
Pretax income
Provision for income taxes
Income before minority interests
Three months ended October
31, 2003
(Unaudited)
Africa Corporate Total
Gross revenue from external
customers $ 55,827 $ -- $ 398,726
Net revenue $ 34,899 $ -- $ 156,545
Staff costs 14,871 1,078 81,206
Depreciation and amortization 787 193 3,531
Amortization of intangible
assets 29 -- 178
Other operating expenses 14,260 1,551 53,657
Operating income/(loss) $ 4,952 $ (2,822) 17,973
Interest income, net 458
Losses on foreign exchange (336)
Pretax income 18,095
Provision for income taxes (4,419)
Income before minority
interests $ 13,676
UTi Worldwide Inc.
Segment Reporting
(in thousands)
Nine months ended October 31, 2004
(Unaudited)
Europe Americas Asia Pacific
Gross revenue from external
customers $ 429,219 $ 411,733 $ 490,714
Net revenue $ 128,113 $ 209,306 $ 79,544
Staff costs 68,369 121,166 32,167
Depreciation and amortization 3,717 2,566 1,807
Amortization of intangible assets -- 546 --
Other operating expenses 36,534 67,833 19,860
Operating income/(loss) $ 19,493 $ 17,195 $ 25,710
Interest income, net
Losses on foreign exchange
Pretax income
Provision for income taxes
Income before minority interests
Nine months ended October 31, 2004
(Unaudited)
Africa Corporate Total
Gross revenue from external
customers $ 300,824 $ -- $ 1,632,490
$ 141,548 $ -- $ 558,511
Net revenue
Staff costs 62,154 5,644 289,500
Depreciation and amortization 4,098 1,287 13,475
Amortization of intangible assets 319 -- 865
Other operating expenses 55,108 6,378 185,713
Operating income/(loss) $ 19,869 $ (13,309) 68,958
Interest income, net 627
Losses on foreign exchange (26)
Pretax income 69,559
Provision for income taxes (18,970)
Income before minority interests $ 50,589
Nine months ended October 31, 2003
(Unaudited)
Europe Americas Asia Pacific
Gross revenue from external
$ 308,329 $ 337,024 $ 298,311
customers
$ 90,879 $ 188,667 $ 63,801
Net revenue
Staff costs 52,750 109,031 26,607
Depreciation and amortization 3,200 2,992 1,538
Amortization of intangible
assets -- 446 --
Other operating expenses 27,037 63,833 16,012
Operating income/(loss) $ 7,892 $ 12,365 $ 19,644
Interest income, net
Losses on foreign exchange
Pretax income
Provision for income taxes
Income before minority interests
Africa Corporate Total
Gross revenue from external
$ 143,875 $ -- $ 1,087,539
customers
$ 89,476 $ -- $ 432,823
Net revenue
Staff costs 39,659 3,713 231,760
Depreciation and amortization 2,191 829 10,750
Amortization of intangible
assets 38 -- 484
Other operating expenses 34,821 4,022 145,725
Operating income/(loss) $ 12,767 $ (8,564) 44,104
Interest income, net 967
Losses on foreign exchange (12)
Pretax income 45,059
Provision for income taxes (11,173)
Income before minority interests $ 33,886
UTi Worldwide Inc.
Supplemental Financial Information
(in thousands)
Three months ended
October 31,
2004 2003
(Unaudited)
Forwarding, Customs Brokerage & Other:
Gross revenue from external customers $ 496,099 $ 320,033
Net revenue $ 118,800 $ 93,524
Staff costs 58,870 48,179
Depreciation and amortization 2,739 2,349
Other operating expenses 34,686 27,386
Operating income $ 22,505 $ 15,610
Nine months ended
October 31,
2004 2003
(Unaudited)
Forwarding, Customs Brokerage & Other:
Gross revenue from external customers $ 1,335,889 $ 866,256
Net revenue $ 328,941 $ 258,765
Staff costs 166,038 136,588
Depreciation and amortization 7,952 7,106
Other operating expenses 95,285 73,356
Operating income $ 59,666 $ 41,715
Three months ended
October 31,
2004 2003
(Unaudited)
Contract Logistics, Distribution & Other:
Gross revenue from external customers $ 106,404 $ 78,693
$ 83,219 $ 63,021
Net revenue
Staff costs 41,282 31,949
Depreciation and amortization 1,798 989
Amortization of intangible assets 435 178
Other operating expenses 30,604 24,720
Operating income $ 9,100 $ 5,185
Nine months ended
October 31,
2004 2003
(Unaudited)
Contract Logistics, Distribution & Other:
Gross revenue from external customers $ 296,601 $ 221,283
Net revenue $ 229,570 $ 174,058
Staff costs 117,818 91,459
Depreciation and amortization 4,236 2,815
Amortization of intangible assets 865 484
Other operating expenses 84,050 68,347
Operating income $ 22,601 $ 10,953
Date: 07/12/2004 02:56:18 PM
Produced by the JSE SENS Department
