(Source: Business Wire)
World Fuel Services Corporation (NYSE:INT), a global leader in the marketing and sale of marine, aviation and land fuel products and related services, today reported first quarter net income of $25.8 million or $0.87 diluted earnings per share compared to $15.8 million or $0.54 diluted earnings per share in the first quarter of 2008. Non-GAAP net income for the first quarter, which excludes share-based compensation and amortization of acquired intangible assets, was $28.3 million or $0.95 non-GAAP diluted earnings per share compared to $17.4 million or $0.60 non-GAAP diluted earnings per share in the first quarter of 2008. A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."
"Although the global economy remained uncertain, we delivered strong first quarter results, effectively managed risk and continued to execute upon our long-term growth strategy," said Paul H. Stebbins, chairman and chief executive officer of World Fuel Services Corporation. "Our balance sheet and liquidity position remain very strong as we continue to be the counterparty of choice in the markets we serve."
The company's marine segment generated gross profit of $47.1 million in the first quarter of 2009, an increase of 28% year-over-year. "During a quarter in which markets continued to soften, our heightened discipline and solid execution allowed us to generate strong operating results," stated Michael J. Kasbar, president and chief operating officer. The company's aviation segment generated first quarter gross profit of $32.0 million, a year-over-year decrease of 9%. "While industry conditions remain challenging, our aviation segment delivered good results," added Kasbar. The company's land segment posted gross profit of $8.2 million in the first quarter, an increase of $6.4 million year-over-year, driven principally by our acquisition of the Texor business.
"By delivering strong operating results and further reducing our net trade cycle we generated $89.6 million of operating cash flow in the first quarter," stated Ira M. Birns, executive vice president and chief financial officer. "We have now generated more than $570 million of operating cash flow over the past three quarters, further strengthening our balance sheet and liquidity profile."
Non-GAAP Financial Measures
This press release includes selected financial information that has not been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). This information includes non-GAAP net income and non-GAAP diluted earnings per share. The non-GAAP financial measures exclude costs associated with share-based compensation and amortization of acquired intangible assets, primarily because we do not believe they are reflective of the company's core operating results. We believe that these non-GAAP financial measures, when considered in conjunction with our financial information prepared in accordance with GAAP, are useful for investors to evaluate our core operating results and trends.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In addition, our presentation of non-GAAP net income and non-GAAP earnings per share may not be comparable to the presentation of such metrics by other companies. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure. As previously mentioned, a reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release.
Information Relating to Forward-Looking Statements
With the exception of historical information in this news release, this document includes forward-looking statements that involve risks and uncertainties, including, but not limited to, quarterly fluctuations in results, the creditworthiness of customers and counterparties and our ability to collect accounts receivable and settle derivatives contracts, fluctuations in world oil prices or foreign currency, changes in political, economic, regulatory, or environmental conditions, adverse conditions in the markets or industries in which we or our customers operate, our failure to effectively hedge certain financial risks associated with the use of derivatives, non-performance by counterparties or customers on derivatives contracts, the integration of acquired businesses, uninsured losses, our ability to retain and attract senior management and other key employees and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. Actual results may differ materially from any forward-looking statements set forth herein.
About World Fuel Services Corporation
Headquartered in Miami, Florida, World Fuel Services is a global leader in the marketing and sale of marine, aviation and land fuel products, as well as related services. World Fuel Services sells fuel and delivers services to its clients at more than 6,000 locations in more than 190 countries, including airports, seaports, tanker truck loading terminals and other customer storage locations. With 44 strategically located global offices (including satellite offices), World Fuel Services offers its clients a value-added outsource service for the supply, quality control, logistical support and price risk management of marine, aviation and land fuel.
The Company's global team of market makers provides deep domain expertise in all aspects of marine, aviation and land fuel management. World Fuel Services' marine customers include international container and tanker fleets and time-charter operators, as well as the United States and foreign governments. Aviation customers include commercial airlines, cargo carriers and corporate clientele, as well as the United States and foreign governments. Land customers include petroleum distributors, retail petroleum operators, and industrial, commercial and government accounts. For more information, call 305-428-8000 or visit http://www.wfscorp.com.
WORLD FUEL SERVICES CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA) For the Three Months ended March 31, 2009 2008 Revenue $ 2,013,943 $ 4,491,486 Cost of revenue 1,926,608 4,417,677 Gross profit 87,335 73,809 Operating expenses: Compensation and employee benefits 33,793 29,498 Provision for bad debt 458 1,910 General and administrative 19,979 20,080 54,230 51,488 Income from operations 33,105 22,321 Interest and other expense, net (1,356 ) (2,224 ) Income before income taxes 31,749 20,097 Provision for income taxes 5,930 4,202 Net income including noncontrolling interest 25,819 15,895 Less: net (loss) income attributable to noncontrolling interest (11 ) 142 Net income attributable to World Fuel $ 25,830 $ 15,753 Basic earnings per share $ 0.88 $ 0.55 Basic weighted average shares 29,392 28,598 Diluted earnings per share $ 0.87 $ 0.54 Diluted weighted average shares 29,586 29,043 -------------------------------------------------------------------------------
WORLD FUEL SERVICES CORPORATION CONSOLIDATED BALANCE SHEETS (UNAUDITED - IN THOUSANDS) As of March 31, December 31, 2009 2008 Assets: Current assets: Cash and cash equivalents $ 386,328 $ 314,352 Short-term investments 8,100 8,100 Accounts receivable, net 587,782 676,100 Inventories 45,760 28,726 Short-term derivative assets, net 55,379 72,260 Prepaid expenses and other current assets 44,267 72,612 Total current assets 1,127,616 1,172,150 Property and equipment, net 34,599 35,328 Other assets 202,297 197,148 Total assets $ 1,364,512 $ 1,404,626 Liabilities: Current liabilities: Short-term debt $ 9,642 $ 23,840 Accounts payable 518,257 548,876 Short-term derivative liabilities, net 59,511 66,302 Customer deposits 34,260 40,961 Accrued expenses and other current liabilities 59,582 71,036 Total current liabilities 681,252 751,015 Long-term debt 10,521 9,537 Other long-term liabilities 34,809 36,156 Total liabilities 726,582 796,708 Equity: World Fuel shareholders' equity 638,186 607,887 Noncontrolling interest (256 ) 31 Total equity 637,930 607,918 Total liabilities and equity $ 1,364,512 $ 1,404,626 -------------------------------------------------------------------------------
WORLD FUEL SERVICES CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED - IN THOUSANDS) For the Three Months Ended March 31, 2009 2008 Cash flows from operating activities: Net income attributable to World Fuel $ 25,830 $ 15,753 Adjustments to reconcile net income attributable to net cash provided by (used in) operating activities: Provision for bad debt 458 1,910 Depreciation and amortization 3,838 2,870 Deferred income tax benefit (2,473 ) (500 ) Share-based payment compensation costs 1,791 1,673 Noncash derivative losses (gains), net 2,647 (4,981 ) Foreign currency transaction losses (gains), net 213 (232 ) Other 236 236 Changes in assets and liabilities 57,066 (22,376 ) Total adjustments 63,776 (21,400 ) Net cash provided by (used in) operating activities 89,606 (5,647 ) Cash flows from investing activities: Capital expenditures (1,303 ) (3,988 ) Net cash used in investing activities (1,303 ) (3,988 ) Cash flows from financing activities: Dividends paid on common stock (1,096 ) (1,085 ) Distribution of noncontrolling interest (276 ) (146 ) Proceeds from exercise of stock options 457 753 Purchases of stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards (2,324 ) (254 ) Repayments under bankers acceptance facility (14,507 ) - Borrowings from noncontrolling shareholders of a subsidiary 1,458 - Borrowings under senior revolving credit facility - 654,000 Repayments under senior revolving credit facility - (614,000 ) Restricted cash - 10,000 Net cash (used in) provided by financing activities (16,288 ) 49,268 Effect of exchange rate changes on cash and cash equivalents (39 ) 232 Net increase in cash and cash equivalents 71,976 39,865 Cash and cash equivalents, at beginning of period 314,352 36,151 Cash and cash equivalents, at end of period $ 386,328 $ 76,016 -------------------------------------------------------------------------------
WORLD FUEL SERVICES CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA) For the Three Months Ended March 31, 2009 2008 Non-GAAP financial measures and reconciliation: GAAP net income attributable to World Fuel $ 25,830 $ 15,753 Share-based compensation expense, net of taxes 1,201 1,125 Intangible asset amortization expense, net of taxes 1,265 568 Non-GAAP net income attributable to World Fuel $ 28,296 $ 17,446 GAAP diluted earnings per share $ 0.87 $ 0.54 Share-based compensation expense, net of taxes 0.04 0.04 Intangible asset amortization expense, net of taxes 0.04 0.02 Non-GAAP diluted earnings per share $ 0.95 $ 0.60 -------------------------------------------------------------------------------
WORLD FUEL SERVICES CORPORATION SEGMENT INFORMATION (UNAUDITED - IN THOUSANDS) For the Three Months ended March 31, 2009 2008 Revenue: Marine segment $ 1,102,862 $ 2,427,173 Aviation segment 710,415 1,872,962 Land segment 200,666 191,351 $ 2,013,943 $ 4,491,486 Gross profit: Marine segment $ 47,092 $ 36,945 Aviation segment 32,021 35,079 Land segment 8,222 1,785 $ 87,335 $ 73,809 Income from operations: Marine segment $ 29,342 $ 17,656 Aviation segment 11,672 12,382 Land segment 1,089 (742 ) 42,103 29,296 Corporate overhead (8,998 ) (6,975 ) $ 33,105 $ 22,321 -------------------------------------------------------------------------------
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