Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - UTi WORLDWIDE INC | d42417d8k.htm |
Exhibit 99.1
Contact:
Rick Rodick
Chief Financial Officer
(562) 552-9400
rrodick@go2uti.com
UTi WORLDWIDE REPORTS SECOND QUARTER FISCAL 2016 RESULTS
Long Beach, Calif., September 3, 2015 – UTi Worldwide Inc. (NASDAQ: UTIW) today reported financial results for its fiscal 2016 second quarter ended July 31, 2015.
Edward G. Feitzinger, chief executive officer, said, “We continued to make progress against our four strategic priorities to achieve our long-term goals and improve performance, in spite of unseasonably weak demand in key air and ocean markets this quarter. I am very pleased that we were able to deliver a second consecutive quarter of solid CL&D performance, with year-to-date CL&D results slightly ahead of our internal expectations. We managed our cost structure and pushed productivity improvements throughout the company, especially in freight forwarding. We had one of the strongest working capital performances in the company’s history for a second fiscal quarter and continued to drive improvements in days sales outstanding. We delivered gains in our freight forwarding yields on a sequential basis. Freight forwarding volumes have stabilized sequentially as we have demonstrated improved client retention; however, normal seasonal volume growth did not occur in the second fiscal quarter due to the global macroeconomic slowdown. We do not expect macroeconomic headwinds to abate during the second half of the year, but we do anticipate that our second half volumes and net revenues will benefit from the new client wins we recorded in the first half of the year.”
Financial Results for Second Quarter Fiscal Year 2016
For the second quarter of fiscal year 2016, revenues decreased 16.5% to $913.9 million, compared to $1,094.1 million for the prior year period, while net revenues decreased 14.0% to $338.5 million, compared to $393.7 million for the prior year period. The decrease in net revenues was primarily related to lower air and ocean volumes in freight forwarding as well as the strengthening of the U.S. dollar against the Euro and South African Rand compared to the prior year comparable period. On a constant currency basis, revenues and net revenues were down 8.8% and 5.4%, respectively. As we do every year in the second quarter, we performed an analysis on the value of our goodwill as of July 31, 2015. As a result we determined that an impairment of goodwill had occurred in our freight forwarding segment. Accordingly, we recorded a charge for this impairment of $50.0 million. The operating loss for the second quarter of fiscal 2016, inclusive of the goodwill impairment, was $61.2 million compared to operating
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income of $1.0 million for the prior year comparable period, primarily due to the goodwill impairment and lower freight forwarding net revenues. Earnings before interest, taxes, depreciation and amortization, excluding goodwill impairment and severance and other items, as set out in the reconciliation included with this press release (Adjusted EBITDA), for the second quarter of fiscal 2016 was $11.2 million compared to $23.8 million for the prior year period. Free cash flow (defined as cash flow from operations less capital expenditures) was $60.0 million for the second quarter compared to negative $10.3 million for the prior year period.
Contract Logistics and Distribution
Net revenues for Contract Logistics and Distribution decreased 7.4% to $197.7 million in the second quarter of fiscal 2016 compared to $213.6 million in the prior year period. On a constant currency basis, net revenues for Contract Logistics and Distribution increased 1.0%. Operating income was $15.5 million for the second quarter of fiscal 2016 compared to $15.6 million for the same period last year. On a constant currency basis, operating income increased 8.8%.
Freight Forwarding
Net revenues for Freight Forwarding decreased 21.8% to $140.8 million in the second quarter of fiscal 2016 compared to $180.1 million in the prior year period. On a constant currency basis, net revenues for Freight Forwarding decreased 13.1%. The decrease in net revenues was primarily related to lower air and ocean volumes, which offset significant yield improvement. The operating loss, inclusive of the $50.0 million goodwill impairment, was $59.9 million for the second quarter of fiscal 2016 compared to operating income of $6.3 million for the same period last year. The decrease in operating income was primarily related to the goodwill impairment and lower air and ocean volumes.
Richard G. Rodick, chief financial officer, said, “Working capital management and free cash flow improvement were key priorities for us this quarter. Our disciplined actions drove one of the best second quarter free cash flow results in the history of our company. We continue to believe our efficiency initiatives will enable us to achieve our working capital targets for the full fiscal year.”
Fiscal Year 2016 Outlook
The Company is updating its guidance for full fiscal year 2016 as follows:
| • | The Company continues to anticipate a year-over-year reduction in working capital in the range of $175 million to $200 million for full year fiscal 2016. |
| • | The Company is committed to its original full year adjusted EBITDA guidance of $125 million to $150 million, but now believes that this will be achieved in the 12 months beginning August 1, 2015 rather than for the full fiscal year 2016 due to macro-economic headwinds and the timing of when we expect to see benefits from new business wins. |
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| • | The Company expects full year fiscal 2016 adjusted EBITDA in the range of $75 million to $100 million. |
Edward G. Feitzinger, chief executive officer, commented, “We have made significant progress in a short period of time since our reorganization was announced in late January. We are executing against our working capital and profit improvement initiatives while delivering solid results in our CL&D business. Our team is energized by the momentum we are seeing as well as the shift in our culture instilled by the four strategic priorities of our new playbook. We have narrowed the problem to a volume equation in our freight forwarding business. Although we cannot control the macroeconomic environment, we believe that our forwarding sales efforts have reached an inflection point, and we should start to see the impact in our reported results in the second half of the year.”
Investor Conference Call
UTi management will host an investor conference call today, September 3, 2015, at 2:00 P.M. PDT (5:00 P.M. EDT) to review the Company’s financial results for the fiscal 2016 second quarter. Investment professionals are invited to participate in the live call by dialing 877-328-5514 (domestic) or 412-317-5420 (international) and asking to be connected to the UTi Worldwide, Inc. conference call. The call will be open to all other interested parties through a live, listen-only audio internet broadcast at www.go2uti.com. The slides that will be referenced during the call will be available on the Company’s website at www.go2uti.com (click on “Investor Relations” and then click on “Webcasts & Presentations”). The slides will contain disclosures of certain non-GAAP financial measures, which will be identified in the slides. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures will be included in the slides. For those who are not available to listen to the live broadcast, the call will be archived for one year on the Company’s website. A telephonic playback of the conference call also will be available from approximately 5:00 P.M. PDT, today, through September 8, 2015, by calling 877-344-7529 (domestic), 855-669-9658 (Canada) or 412-317-0088 (international) and using replay access code 10071459.
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.
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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 short-term patterns and long-term trends may be obscured by the impact of certain items. For this reason, the Company has included information in this press release regarding net revenues (revenues minus purchased transportation costs) and regarding constant currency revenue, net revenue and operating income changes, which are adjusted to exclude the impact of currency fluctuations between comparable periods. In addition, the Company has referred to earnings before interest, taxes, depreciation and amortization (EBITDA), and to adjusted EBITDA, which is EBITDA adjusted to exclude goodwill impairment and severance and other items set out in the reconciliation included with this press release. The Company has also referred to free cash flow, which is cash flow from operations less purchases of property, plant and equipment (net of proceeds from disposals), as well as purchases of software and other intangible assets. 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. In addition, the Company’s management believes that presenting adjusted EBITDA provides useful information to investors regarding underlying business trends and performance of the Company’s ongoing operations. This non-GAAP financial 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 generally accepted accounting principles in the U.S. (GAAP). Further, neither free cash flow, EBITDA nor adjusted EBITDA represent net income or cash flow from operations as defined by GAAP, are not derived in accordance with GAAP, and should not be considered as an alternative to net income or cash flow from operations. For more information on these non-GAAP financial measures, please see the tables at the end of this press release.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release which address activities, events or developments that UTi expects or anticipates will or may occur in the future, including, but not limited to statements about such matters as the Company not expecting macroeconomic headwinds to abate during the second half of the year, but anticipating that the Company’s second half volumes and net revenues will benefit from the new client wins recorded in the first half of the year; the Company continuing to believe its efficiency initiatives will enable it to achieve its working capital targets for the full fiscal year; the fact that the Company is targeting adjusted EBITDA in fiscal 2016 in the range of $75 million to $100 million and anticipates year over year working capital
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improvement of $175 million to $200 million; the fact that the Company is anticipating adjusted EBITDA of $125 million to $150 million for the 12 month period beginning August 1, 2015; and any other statements about the Company’s expected, estimated or anticipated future results or strategies, are forward-looking statements.
These statements are based on certain assumptions and analyses made by UTi in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue” and other similar expressions or the negative of these terms or other comparable terms. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Factors that might cause or contribute to a material difference include, but are not limited to, the risks in UTi’s filings with the SEC, including those listed in Item 1A “Risk Factors” in its annual report on Form 10-K relating to the fiscal year ended January 31, 2015 filed with the SEC, and the following: the Company has incurred losses for each of the last three fiscal years and during the three and six months ended July 31, 2015 and such losses are expected to continue; the Company’s ability to achieve its adjusted EBITDA target for the 2016 fiscal year and for the 12 month period beginning August 1, 2015 is dependent on incremental net revenue growth in its freight forwarding business, which growth may not occur; the Company’s ability to maintain sufficient liquidity and capital resources to fund its business and to generate sufficient cash to service its debts and other obligations; the Company’s ability to refinance its indebtedness when it comes due, including near term maturities; the Company’s ability to accurately predict its future business results and liquidity; risks associated with the Company’s clients, including delays or the inability by such clients to pay the Company; the risk that the Company may not be able to achieve its expected working capital improvements; volatility with respect to global trade; global economic, political and market conditions and unrest, including those in Africa, Asia Pacific and Europe; volatile fuel costs; transportation capacity, pricing dynamics and the Company’s ability to secure space on third party aircraft, ocean vessels and other modes of transportation; changes in interest and foreign exchange rates, particularly with respect to the South African rand and the Euro; material interruptions in transportation services; risks of international operations; risks that the carrying values of the Company’s assets might be impaired; risks associated with, and the potential for penalties, fines, costs and expenses the Company may incur as a result of an investigation by the government of Brazil into the international air freight and air cargo transportation industry; risks of adverse legal judgments or other liabilities not limited by contract or covered by insurance; risks associated with the pending securities class action lawsuit and pending investigation by the SEC; the Company’s ability to retain clients while facing increased competition; disruptions caused by epidemics, natural disasters, conflicts, strikes, wars and terrorism; the impact of changes in the Company’s effective tax rates; the Company’s ability to maintain effective disclosure controls and procedures and effective internal control over financial reporting; the
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other risks and uncertainties described herein and in the Company’s other filings with the SEC; and other factors outside the Company’s control. All forward-looking statements set forth in this press release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Company or its business or results of operations. Forward-looking statements set forth in this press release speak only as of the date hereof and the Company does not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except as required by law.
# # #
(Tables Follow)
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UTi Worldwide Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
| Three months ended | Six months ended | |||||||||||||||
| July 31, | July 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenues: |
||||||||||||||||
| Airfreight forwarding |
$ | 252,315 | $ | 316,949 | $ | 547,093 | $ | 638,350 | ||||||||
| Ocean freight forwarding |
230,178 | 282,361 | 472,476 | 545,493 | ||||||||||||
| Customs brokerage |
43,802 | 62,499 | 88,325 | 106,826 | ||||||||||||
| Contract logistics |
185,796 | 197,526 | 369,803 | 384,690 | ||||||||||||
| Distribution |
146,686 | 156,899 | 291,574 | 303,757 | ||||||||||||
| Other |
55,151 | 77,911 | 117,974 | 158,917 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
913,928 | 1,094,145 | 1,887,245 | 2,138,033 | ||||||||||||
| Other operating expenses: |
||||||||||||||||
| Purchased transportation costs: |
||||||||||||||||
| Airfreight forwarding |
193,573 | 245,874 | 424,666 | 491,287 | ||||||||||||
| Ocean freight forwarding |
192,885 | 239,824 | 406,246 | 458,872 | ||||||||||||
| Customs brokerage |
13,041 | 11,939 | 25,495 | 22,947 | ||||||||||||
| Contract logistics |
45,979 | 47,792 | 95,457 | 92,062 | ||||||||||||
| Distribution |
103,264 | 110,651 | 205,013 | 214,435 | ||||||||||||
| Other |
26,637 | 44,345 | 62,367 | 95,356 | ||||||||||||
| Staff costs |
207,609 | 227,968 | 406,740 | 445,145 | ||||||||||||
| Depreciation |
12,847 | 14,222 | 25,925 | 28,028 | ||||||||||||
| Amortization of intangible assets |
7,439 | 7,020 | 14,851 | 14,019 | ||||||||||||
| Severance and other |
469 | 1,644 | 5,483 | 2,291 | ||||||||||||
| Goodwill impairment |
50,000 | — | 50,000 | — | ||||||||||||
| Other operating expenses |
121,426 | 141,907 | 245,075 | 275,902 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other operating expenses |
975,169 | 1,093,186 | 1,967,318 | 2,140,344 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating (loss)/income |
(61,241 | ) | 959 | (80,073 | ) | (2,311 | ) | |||||||||
| Interest expense, net |
(11,399 | ) | (10,066 | ) | (22,136 | ) | (18,663 | ) | ||||||||
| Loss on debt extinguishment |
— | — | — | (21,820 | ) | |||||||||||
| Other income/(expense), net |
67 | (877 | ) | (4 | ) | (997 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Pretax loss |
(72,573 | ) | (9,984 | ) | (102,213 | ) | (43,791 | ) | ||||||||
| (Benefit)/provision for income taxes |
(1,945 | ) | 9,172 | 3,797 | 18,734 | |||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Net loss |
(70,628 | ) | (19,156 | ) | (106,010 | ) | (62,525 | ) | ||||||||
| Net income/(loss) attributable to non-controlling interests |
101 | 2,772 | (1,990 | ) | 3,126 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loss attributable to UTi Worldwide Inc. |
$ | (70,729 | ) | $ | (21,928 | ) | $ | (104,020 | ) | $ | (65,651 | ) | ||||
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|
|
|
|
|
|
|||||||||
| Basic and diluted loss per common share attributable to UTi Worldwide Inc. common shareholders |
$ | (0.70 | ) | $ | (0.24 | ) | $ | (1.05 | ) | $ | (0.67 | ) | ||||
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|
|||||||||
| Number of weighted average common shares outstanding used for per share calculations Basic and diluted shares |
106,024,595 | 105,402,541 | 105,825,063 | 105,164,180 | ||||||||||||
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UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
| July 31, 2015 | January 31, 2015 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Cash and cash equivalents |
$ | 215,505 | $ | 211,832 | ||||
| Cash held as collateral |
34,610 | 29,068 | ||||||
| Trade receivables, net |
798,205 | 887,084 | ||||||
| Deferred income taxes |
12,227 | 12,596 | ||||||
| Other current assets |
155,490 | 154,756 | ||||||
|
|
|
|
|
|||||
| Total current assets |
1,216,037 | 1,295,336 | ||||||
| Property, plant and equipment, net |
177,351 | 195,523 | ||||||
| Goodwill and other intangible assets, net |
362,382 | 429,590 | ||||||
| Investments |
1,095 | 1,023 | ||||||
| Deferred income taxes |
11,450 | 11,175 | ||||||
| Other non-current assets |
38,650 | 41,305 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 1,806,965 | $ | 1,973,952 | ||||
|
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|
|
|
|||||
| LIABILITIES & EQUITY | ||||||||
| Bank lines of credit |
$ | 62,208 | $ | 31,306 | ||||
| Short-term borrowings |
70,417 | 52,825 | ||||||
| Current portion of long-term borrowings |
891 | 1,429 | ||||||
| Current portion of capital lease obligations |
12,442 | 11,429 | ||||||
| Trade payables and other accrued liabilities |
624,661 | 698,450 | ||||||
| Income taxes payable |
4,236 | 8,995 | ||||||
| Deferred income taxes |
12,146 | 12,177 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
787,001 | 816,611 | ||||||
| Long-term borrowings, excluding current portion |
368,344 | 366,846 | ||||||
| Capital lease obligations, excluding current portion |
53,131 | 56,455 | ||||||
| Deferred income taxes |
14,897 | 14,204 | ||||||
| Other non-current liabilities |
34,875 | 36,892 | ||||||
| Convertible preference shares |
188,579 | 181,957 | ||||||
| Commitments and contingencies |
||||||||
| UTi Worldwide Inc. shareholders’ equity: |
||||||||
| Common stock |
578,801 | 575,164 | ||||||
| (Accumulated deficit)/retained earnings |
(17,978 | ) | 92,664 | |||||
| Accumulated other comprehensive loss |
(209,573 | ) | (179,423 | ) | ||||
|
|
|
|
|
|||||
| Total UTi Worldwide Inc. shareholders’ equity |
351,250 | 488,405 | ||||||
| Non-controlling interests |
8,888 | 12,582 | ||||||
|
|
|
|
|
|||||
| Total equity |
360,138 | 500,987 | ||||||
|
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|
|
|
|||||
| Total liabilities and equity |
$ | 1,806,965 | $ | 1,973,952 | ||||
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|
|
|
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UTi Worldwide Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
| Six months ended July 31, | ||||||||
| 2015 | 2014 | |||||||
| (Unaudited) | ||||||||
| OPERATING ACTIVITIES: |
||||||||
| Net loss |
$ | (106,010 | ) | $ | (62,525 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Share-based compensation costs |
4,459 | 6,927 | ||||||
| Depreciation |
25,925 | 28,028 | ||||||
| Amortization of intangible assets |
14,851 | 14,019 | ||||||
| Amortization of debt issuance costs |
1,951 | 1,829 | ||||||
| Make-whole payment |
— | 20,830 | ||||||
| Accretion of convertible senior notes |
4,260 | 3,220 | ||||||
| Goodwill impairment |
50,000 | — | ||||||
| Deferred income taxes |
146 | 1,312 | ||||||
| Uncertain tax positions |
411 | 343 | ||||||
| Gain on disposal of property, plant and equipment |
(1,134 | ) | (225 | ) | ||||
| Provision for doubtful accounts |
(97 | ) | 3,245 | |||||
| Other |
2,194 | 856 | ||||||
| Net changes in operating assets and liabilities |
(4,024 | ) | (142,946 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in operating activities |
(7,068 | ) | (125,087 | ) | ||||
| INVESTING ACTIVITIES: |
||||||||
| Net increase in cash held as collateral |
(5,542 | ) | (44,378 | ) | ||||
| Purchases of property, plant and equipment, excluding software |
(8,575 | ) | (12,241 | ) | ||||
| Proceeds from disposals of property, plant and equipment |
2,456 | 2,388 | ||||||
| Purchases of software and other intangible assets |
(6,355 | ) | (5,928 | ) | ||||
| Net decrease/(increase) in other non-current assets and other |
267 | (310 | ) | |||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(17,749 | ) | (60,469 | ) | ||||
| FINANCING ACTIVITIES: |
||||||||
| Proceeds from issuances of long-term borrowings |
— | 404,427 | ||||||
| Proceeds from the issuance of preference shares |
— | 175,000 | ||||||
| Net borrowings/(repayments) under bank lines of credit |
32,055 | (167,431 | ) | |||||
| Net issuance of financing agreements |
17,000 | — | ||||||
| Net increase/(decrease) in short-term borrowings |
541 | (728 | ) | |||||
| Repayments of long-term borrowings |
(3,300 | ) | (203,162 | ) | ||||
| Make-whole payment |
— | (20,830 | ) | |||||
| Debt and preferred shares issuance costs |
— | (25,789 | ) | |||||
| Repayments of capital lease obligations |
(6,470 | ) | (7,915 | ) | ||||
| Distributions to non-controlling interests and other |
(920 | ) | (44 | ) | ||||
| Ordinary shares settled under share-based compensation plans |
(1,151 | ) | (1,807 | ) | ||||
| Proceeds from issuance of ordinary shares |
130 | 89 | ||||||
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|
|
|
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| Net cash provided by financing activities |
37,885 | 151,810 | ||||||
| Effect of foreign exchange rate changes on cash and cash equivalents |
(9,395 | ) | 8,304 | |||||
|
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|
|
|||||
| Net increase/(decrease) in cash and cash equivalents |
3,673 | (25,442 | ) | |||||
| Cash and cash equivalents at beginning of period |
211,832 | 204,384 | ||||||
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|
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| Cash and cash equivalents at end of period |
$ | 215,505 | $ | 178,942 | ||||
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UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
| Three months ended July 31, 2015 | ||||||||||||||||
| Freight Forwarding |
Contract Logistics and Distribution |
Corporate | Total | |||||||||||||
| Revenues |
$ | 564,841 | $ | 349,087 | $ | — | $ | 913,928 | ||||||||
|
|
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|
|
|
|
|
|
|||||||||
| Purchased transportation costs |
424,032 | 151,347 | — | 575,379 | ||||||||||||
| Staff costs |
96,886 | 102,078 | 8,645 | 207,609 | ||||||||||||
| Depreciation |
3,851 | 7,600 | 1,396 | 12,847 | ||||||||||||
| Amortization of intangible assets |
6,656 | 783 | — | 7,439 | ||||||||||||
| Severance and other |
469 | — | — | 469 | ||||||||||||
| Goodwill impairment |
50,000 | — | — | 50,000 | ||||||||||||
| Other operating expenses |
42,855 | 71,803 | 6,768 | 121,426 | ||||||||||||
|
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|
|
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|
|
|
|||||||||
| Total operating expenses |
624,749 | 333,611 | 16,809 | 975,169 | ||||||||||||
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|
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| Operating (loss)/income |
$ | (59,908 | ) | $ | 15,476 | $ | (16,809 | ) | (61,241 | ) | ||||||
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|
|
|
|||||||||||
| Interest expense, net |
(11,399 | ) | ||||||||||||||
| Other income, net |
67 | |||||||||||||||
|
|
|
|||||||||||||||
| Pretax loss |
(72,573 | ) | ||||||||||||||
| Benefit for income taxes |
(1,945 | ) | ||||||||||||||
|
|
|
|||||||||||||||
| Net loss |
(70,628 | ) | ||||||||||||||
| Net income attributable to non-controlling interests |
101 | |||||||||||||||
|
|
|
|||||||||||||||
| Net loss attributable to UTi Worldwide Inc. |
$ | (70,729 | ) | |||||||||||||
|
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|
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Page 10 of 18
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
| Three months ended July 31, 2014 | ||||||||||||||||
| Freight Forwarding |
Contract Logistics and Distribution |
Corporate | Total | |||||||||||||
| Revenues |
$ | 712,042 | $ | 382,103 | $ | — | $ | 1,094,145 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Purchased transportation costs |
531,915 | 168,510 | — | 700,425 | ||||||||||||
| Staff costs |
113,070 | 106,216 | 8,682 | 227,968 | ||||||||||||
| Depreciation |
4,397 | 8,418 | 1,407 | 14,222 | ||||||||||||
| Amortization of intangible assets |
6,063 | 957 | — | 7,020 | ||||||||||||
| Severance and other |
943 | 181 | 520 | 1,644 | ||||||||||||
| Other operating expenses |
49,331 | 82,230 | 10,346 | 141,907 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
705,719 | 366,512 | 20,955 | 1,093,186 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income/(loss) |
$ | 6,323 | $ | 15,591 | $ | (20,955 | ) | 959 | ||||||||
|
|
|
|
|
|
|
|||||||||||
| Interest expense, net |
(10,066 | ) | ||||||||||||||
| Other expense, net |
(877 | ) | ||||||||||||||
|
|
|
|||||||||||||||
| Pretax loss |
(9,984 | ) | ||||||||||||||
| Provision for income taxes |
9,172 | |||||||||||||||
|
|
|
|||||||||||||||
| Net loss |
(19,156 | ) | ||||||||||||||
| Net income attributable to non-controlling interests |
2,772 | |||||||||||||||
|
|
|
|||||||||||||||
| Net loss attributable to UTi Worldwide Inc. |
$ | (21,928 | ) | |||||||||||||
|
|
|
|||||||||||||||
Page 11 of 18
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
| Six months ended July 31, 2015 | ||||||||||||||||
| Freight Forwarding |
Contract Logistics and Distribution |
Corporate | Total | |||||||||||||
| Revenues |
$ | 1,187,598 | $ | 699,647 | $ | — | $ | 1,887,245 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Purchased transportation costs |
909,503 | 309,741 | — | 1,219,244 | ||||||||||||
| Staff costs |
188,492 | 202,366 | 15,882 | 406,740 | ||||||||||||
| Depreciation |
7,823 | 15,318 | 2,784 | 25,925 | ||||||||||||
| Amortization of intangible assets |
13,287 | 1,564 | — | 14,851 | ||||||||||||
| Severance and other |
2,897 | 2,296 | 290 | 5,483 | ||||||||||||
| Goodwill impairment |
50,000 | — | — | 50,000 | ||||||||||||
| Other operating expenses |
86,591 | 142,916 | 15,568 | 245,075 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
1,258,593 | 674,201 | 34,524 | 1,967,318 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating (loss)/income |
$ | (70,995 | ) | $ | 25,446 | $ | (34,524 | ) | (80,073 | ) | ||||||
|
|
|
|
|
|
|
|||||||||||
| Interest expense, net |
(22,136 | ) | ||||||||||||||
| Other expense, net |
(4 | ) | ||||||||||||||
|
|
|
|||||||||||||||
| Pretax loss |
(102,213 | ) | ||||||||||||||
| Provision for income taxes |
3,797 | |||||||||||||||
|
|
|
|||||||||||||||
| Net loss |
(106,010 | ) | ||||||||||||||
| Net loss attributable to non-controlling interests |
(1,990 | ) | ||||||||||||||
|
|
|
|||||||||||||||
| Net loss attributable to UTi Worldwide Inc. |
$ | (104,020 | ) | |||||||||||||
|
|
|
|||||||||||||||
Page 12 of 18
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
| Six months ended July 31, 2014 | ||||||||||||||||
| Freight Forwarding |
Contract Logistics and Distribution |
Corporate | Total | |||||||||||||
| Revenues |
$ | 1,395,912 | $ | 742,121 | $ | — | $ | 2,138,033 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Purchased transportation costs |
1,048,176 | 326,783 | — | 1,374,959 | ||||||||||||
| Staff costs |
221,190 | 205,962 | 17,993 | 445,145 | ||||||||||||
| Depreciation |
8,826 | 16,344 | 2,858 | 28,028 | ||||||||||||
| Amortization of intangible assets |
12,114 | 1,905 | — | 14,019 | ||||||||||||
| Severance and other |
1,511 | 260 | 520 | 2,291 | ||||||||||||
| Other operating expenses |
96,577 | 161,601 | 17,724 | 275,902 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
1,388,394 | 712,855 | 39,095 | 2,140,344 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income/(loss) |
$ | 7,518 | $ | 29,266 | $ | (39,095 | ) | (2,311 | ) | |||||||
|
|
|
|
|
|
|
|||||||||||
| Interest expense, net |
(18,663 | ) | ||||||||||||||
| Loss on debt extinguishment |
(21,820 | ) | ||||||||||||||
| Other expense, net |
(997 | ) | ||||||||||||||
|
|
|
|||||||||||||||
| Pretax loss |
(43,791 | ) | ||||||||||||||
| Provision for income taxes |
18,734 | |||||||||||||||
|
|
|
|||||||||||||||
| Net loss |
(62,525 | ) | ||||||||||||||
| Net income attributable to non-controlling interests |
3,126 | |||||||||||||||
|
|
|
|||||||||||||||
| Net loss attributable to UTi Worldwide Inc. |
$ | (65,651 | ) | |||||||||||||
|
|
|
|||||||||||||||
Page 13 of 18
UTi Worldwide Inc. Supplemental Financial Information
(in thousands, except per share amounts)
(Unaudited)
| Three months ended | Six months ended | |||||||||||||||
| July 31, 2015 | July 31, 2014 | July 31, 2015 | July 31, 2014 | |||||||||||||
| Revenues |
$ | 913,928 | $ | 1,094,145 | $ | 1,887,245 | $ | 2,138,033 | ||||||||
| Purchased transportation costs |
(575,379 | ) | (700,425 | ) | (1,219,244 | ) | (1,374,959 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net revenues |
$ | 338,549 | $ | 393,720 | $ | 668,001 | $ | 763,074 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Three months ended | Six months ended | |||||||||||||||
| Freight Forwarding |
July 31, 2015 | July 31, 2014 | July 31, 2015 | July 31, 2014 | ||||||||||||
| Revenues |
$ | 564,841 | $ | 712,042 | $ | 1,187,598 | $ | 1,395,912 | ||||||||
| Purchased transportation costs |
(424,032 | ) | (531,915 | ) | (909,503 | ) | (1,048,176 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net revenues |
$ | 140,809 | $ | 180,127 | $ | 278,095 | $ | 347,736 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Three months ended | Six months ended | |||||||||||||||
| Contract Logistics and Distribution |
July 31, 2015 | July 31, 2014 | July 31, 2015 | July 31, 2014 | ||||||||||||
| Revenues |
$ | 349,087 | $ | 382,103 | $ | 699,647 | $ | 742,121 | ||||||||
| Purchased transportation costs |
(151,347 | ) | (168,510 | ) | (309,741 | ) | (326,783 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net revenues |
$ | 197,740 | $ | 213,593 | $ | 389,906 | $ | 415,338 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Page 14 of 18
UTi Worldwide Inc.
Constant Currency Growth Reconciliation
(Unaudited)
Set forth below is a reconciliation of the Company’s constant currency growth rates and the growth rates based on the Company’s US GAAP reported results in the Company’s revenues and net revenues for the three and six months ended July 31, 2015. Constant currency growth is a non-GAAP measure that excludes the impact of foreign currency translation.
| Three months ended July 31, 2015 | Six months ended July 31, 2015 | |||||||||||||||||||||||
| Total |
Total Net Change |
+/(-) Currency Impact |
Organic Growth | Total Net Change |
+/(-) Currency Impact |
Organic Growth | ||||||||||||||||||
| Revenues |
(16 | )% | 7 | % | (9 | )% | (12 | )% | 8 | % | (4 | )% | ||||||||||||
| Net revenues |
(14 | )% | 9 | % | (5 | )% | (12 | )% | 8 | % | (4 | )% | ||||||||||||
| Freight Forwarding |
Three months ended July 31, 2015 | Six months ended July 31, 2015 | ||||||||||||||||||||||
| Total Net Change |
+/(-) Currency Impact |
Organic Growth | Total Net Change |
+/(-) Currency Impact |
Organic Growth | |||||||||||||||||||
| Revenues |
(21 | )% | 9 | % | (12 | )% | (15 | )% | 9 | % | (6 | )% | ||||||||||||
| Net revenues |
(22 | )% | 9 | % | (13 | )% | (20 | )% | 8 | % | (12 | )% | ||||||||||||
| Contract Logistics and Distribution |
Three months ended July 31, 2015 | Six months ended July 31, 2015 | ||||||||||||||||||||||
| Total Net Change |
+/(-) Currency Impact |
Organic Growth | Total Net Change |
+/(-) Currency Impact |
Organic Growth | |||||||||||||||||||
| Revenues |
(9 | )% | 7 | % | (2 | )% | (6 | )% | 6 | % | — | % | ||||||||||||
| Net revenues |
(7 | )% | 8 | % | 1 | % | (6 | )% | 8 | % | 2 | % | ||||||||||||
| Operating income |
(1 | )% | 10 | % | 9 | % | (13 | )% | 8 | % | (5 | )% | ||||||||||||
Page 15 of 18
UTi Worldwide Inc.
EBITDA and Adjusted EBITDA Calculations
(in thousands)
(Unaudited)
| Three months ended | Six months ended | |||||||||||||||
| July 31, | July 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| EBITDA: |
||||||||||||||||
| Net loss |
$ | (70,628 | ) | $ | (19,156 | ) | $ | (106,010 | ) | $ | (62,525 | ) | ||||
| (Benefit)/provision for income taxes |
(1,945 | ) | 9,172 | 3,797 | 18,734 | |||||||||||
| Interest expense, net |
11,399 | 10,066 | 22,136 | 18,663 | ||||||||||||
| Depreciation |
12,847 | 14,222 | 25,925 | 28,028 | ||||||||||||
| Amortization of intangible assets |
7,439 | 7,020 | 14,851 | 14,019 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total EBITDA before adjusting items |
(40,888 | ) | 21,324 | (39,301 | ) | 16,919 | ||||||||||
| Adjusting items: |
||||||||||||||||
| Other (income)/expense, net |
(67 | ) | 877 | 4 | 997 | |||||||||||
| Goodwill impairment(1) |
50,000 | — | 50,000 | — | ||||||||||||
| Loss on debt extinguishment(2) |
— | — | — | 21,820 | ||||||||||||
| Legal fees(3) |
1,730 | — | 3,019 | — | ||||||||||||
| Severance and other(4)(5) |
469 | 1,644 | 5,483 | 2,291 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 11,244 | $ | 23,845 | $ | 19,205 | $ | 42,027 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | During the three months ended July 31, 2015, the Company recorded a goodwill impairment charge of $50,000 before a related deferred tax benefit of $9,000. |
| (2) | Loss on debt extinguishment for the three months ended April 30, 2014 includes a make-whole payment of $20,830 with respect to the prepayment of the Company’s $200,000 aggregate principal amount of private placement notes issued on January 25, 2013, as well as a charge of $990 related to unamortized debt issuance costs. |
| (3) | During the three and six months ended July 31, 2015, the Company incurred legal fees of $1,730 and $3,019, respectively, associated with the Company’s pending Securities and Exchange Commission investigation and securities class action lawsuit. |
| (4) | During the three and six months ended July 31, 2015, the Company recorded pre-tax severance of $469 and $3,453, respectively, primarily related to the Company’s January 2015 Reorganization. In addition during the six months ended July 31, 2015, the Company incurred facility exit costs and other expenses of $2,030, associated with the expected exit of a joint venture. |
| (5) | During the three and six months ended July 31, 2014 the Company recorded pre-tax severance of $1,644 and $2,291, primarily related to organizational realignment activities. |
Page 16 of 18
UTi Worldwide Inc.
Free Cash Flow Calculation
(in thousands)
(Unaudited)
| Three months ended | Six months ended | |||||||||||||||
| July 31, | July 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Net cash provided by/(used in) operating activities |
$ | 68,289 | $ | (2,950 | ) | $ | (7,068 | ) | $ | (125,087 | ) | |||||
| Purchases of property, plant and equipment, excluding software |
(5,659 | ) | (6,354 | ) | (8,575 | ) | (12,241 | ) | ||||||||
| Proceeds from disposals of property, plant and equipment |
1,290 | 647 | 2,456 | 2,388 | ||||||||||||
| Purchases of software and other intangible assets |
(4,042 | ) | (1,728 | ) | (6,355 | ) | (5,928 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Free cash flow |
$ | 59,878 | $ | (10,385 | ) | $ | (19,542 | ) | $ | (140,868 | ) | |||||
|
|
|
|
|
|
|
|
|
|||||||||
Page 17 of 18
UTi Worldwide Inc.
Basic and Diluted Earnings Per Share Calculation
(in thousands)
(Unaudited)
| Three months ended | Six months ended | |||||||||||||||
| July 31, | July 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Basic and Diluted Earnings Per Share Calculation |
||||||||||||||||
| Net loss attributable to UTi Worldwide Inc. |
$ | (70,729 | ) | $ | (21,928 | ) | $ | (104,020 | ) | $ | (65,651 | ) | ||||
| Less: Dividends paid-in kind on Convertible Preference Shares |
(3,340 | ) | (3,114 | ) | (6,622 | ) | (5,060 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Loss attributable to UTi Worldwide Inc. common shareholders for calculation of basic and diluted earnings per share |
(74,069 | ) | (25,042 | ) | (110,642 | ) | (70,711 | ) | ||||||||
| Number of weighted average common shares outstanding used for per share calculations Basic and diluted shares |
106,024,595 | 105,402,541 | 105,825,063 | 105,164,180 | ||||||||||||
| Basic and diluted loss per common share attributable to UTi Worldwide Inc. common shareholders |
$ | (0.70 | ) | $ | (0.24 | ) | $ | (1.05 | ) | $ | (0.67 | ) | ||||
Page 18 of 18