World Fuel Services Corporation Reports Fourth Quarter and Full Year Earnings Generated Operating Cash Flow of $98 Million in the Fourth Quarter and $146 Million for the Full Year Business Wire MIAMI -- February 21, 2013 World Fuel Services Corporation (NYSE:INT), a leading global fuel logistics company, principally engaged in the marketing, sale and distribution of aviation, marine and land fuel products and related services, today reported full year net income of $189.3 million or $2.64 diluted earnings per share. Excluding one-time expenses of $4.5 million related to the acquisition of select assets of Multi Service Corporation (“Multi Service”), net income was $192.3 million or $2.68 diluted earnings per share. This compares to $194.0 million or $2.71 diluted earnings per share for the same period in 2011. Non-GAAP net income and diluted earnings per share for the full year, excluding share-based compensation, amortization of acquired intangible assets and expenses related to the Multi Service acquisition, were $215.9 million and $3.01, respectively, compared to $221.1 million and $3.09 in 2011. For the fourth quarter, net income was $42.8 million or $0.60 diluted earnings per share. Excluding expenses related to the Multi Service acquisition, net income was $45.8 million or $0.64 diluted earnings per share. This compares to $50.1 million or $0.70 diluted earnings per share in the fourth quarter of 2011. Non-GAAP net income and diluted earnings per share for the fourth quarter, excluding share-based compensation, amortization of acquired intangible assets and expenses related to the Multi Service acquisition, were $52.3 million and $0.73, respectively, compared to $57.4 million and $0.81 in the fourth quarter of 2011. “In 2012, despite a stagnant market, we posted record revenue, gross profit, and volume while completing two strategic acquisitions,” stated Michael J. Kasbar, president and chief executive officer of World Fuel Services Corporation. “Multi Service enhances our comprehensive solutions offering and opens up new opportunities for growth and value creation.” For the full year, the company’s marine segment generated gross profit of $208.0 million, an increase of approximately $12.9 million or 7 percent year-over-year. The company’s aviation segment generated gross profit of $294.6 million, a decrease of $11.5 million or 4 percent year-over-year. The company’s land segment posted gross profit of $170.8 million, an increase of $37.0 million or 28 percent year-over-year. “The two accretive and strategic acquisitions we completed this past year will further expand the value proposition we offer to our customers and suppliers and provide new avenues for growth,” said Ira M. Birns, executive vice president and chief financial officer. “Our operating cash flow contributed to our very strong and liquid balance sheet enabling us to further fuel organic growth as well as make additional strategic acquisitions.” 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, amortization of acquired intangible assets and one-time expenses related to the acquisition of select assets of Multi Service, 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 diluted 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. 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 within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our expectations of opportunities for growth and value creation, as well as our expectation about our value proposition. These forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosures contained in the company’s Securities and Exchange Commission filings, including the company’s Annual Report on Form 10-K. Actual results may differ materially from any forward-looking statements due to risks and uncertainties, including, but not limited to: our ability to effectively integrate and derive benefits from acquired businesses, our ability to capitalize on new market opportunities, the impact of quarterly fluctuations in results, the creditworthiness of our customers and counterparties and our ability to collect accounts receivable, 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 and suppliers operate, our failure to effectively hedge certain financial risks associated with the use of derivatives, non-performance by counterparties or customers on derivatives contracts, loss of, or reduced sales, to a significant government customer, uninsured losses, the impact of natural disasters, adverse results in legal disputes, unanticipated tax liabilities, 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. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, changes in expectations, future events, or otherwise. About World Fuel Services Corporation Headquartered in Miami, Florida, World Fuel Services is a leading global fuel logistics company, principally engaged in the marketing, sale and distribution of aviation, marine and land fuel products and related services on a worldwide basis. World Fuel Services sells fuel and delivers services to its clients at more than 8,000 locations in more than 200 countries and territories worldwide. The company's global team of market makers provides deep domain expertise in all aspects of aviation, marine and land fuel management. Aviation customers include commercial airlines, cargo carriers, private aircraft and fixed base operators (FBOs), as well as the United States and foreign governments. World Fuel Services' marine customers include international container and tanker fleets, cruise lines and time-charter operators, as well as the United States and foreign governments. Land customers include petroleum distributors, retail petroleum operators, and industrial, commercial, and government accounts. The company also offers transaction management services which consist of card payment solutions and merchant processing services to customers in the aviation, marine and land transportation industries. For more information, call 305-428-8000 or visit www.wfscorp.com. WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA) For the Three Months ended For the Year ended December 31, December 31, 2012 2011 2012 2011 Revenue $ 9,935,813 $ 9,323,947 $ 38,945,338 $ 34,622,854 Cost of revenue 9,772,476 9,161,661 38,271,891 33,987,851 Gross profit 163,337 162,286 673,447 635,003 Operating expenses: Compensation and employee 60,809 56,114 237,362 215,275 benefits Provision for 377 1,424 4,790 8,173 bad debt General and 47,790 40,329 174,272 154,583 administrative Total operating 108,976 97,867 416,424 378,031 expenses Income from 54,361 64,419 257,023 256,972 operations Non-operating (4,341 ) (4,501 ) (17,428 ) (18,769 ) expenses, net Income before 50,020 59,918 239,595 238,203 income taxes Provision for 4,995 6,888 38,244 39,001 income taxes Net income including 45,025 53,030 201,351 199,202 noncontrolling interest Net income attributable to 2,189 2,968 12,006 5,173 noncontrolling interest Net income attributable to $ 42,836 $ 50,062 $ 189,345 $ 194,029 World Fuel Basic earnings $ 0.60 $ 0.70 $ 2.66 $ 2.74 per common share Basic weighted average common 71,232 71,036 71,154 70,687 shares Diluted earnings $ 0.60 $ 0.70 $ 2.64 $ 2.71 per common share Diluted weighted average common 71,906 71,772 71,817 71,510 shares WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED - IN THOUSANDS) As of December 31, December 31, 2012 2011 Assets: Current assets: Cash and cash equivalents $ 172,740 $ 205,415 Accounts receivable, net 2,193,866 2,160,561 Inventories 572,313 472,584 Prepaid expenses and other current assets 342,458 283,667 Total current assets 3,281,377 3,122,227 Property and equipment, net 112,525 90,710 Goodwill, identifiable intangible and 713,849 484,309 non-current other assets Total assets $ 4,107,751 $ 3,697,246 Liabilities and equity: Liabilities: Current liabilities: Short-term debt $ 26,065 $ 17,800 Accounts payable 1,814,794 1,739,678 Accrued expenses and other current 308,439 268,664 liabilities Total current liabilities 2,149,298 2,026,142 Long-term debt 354,253 269,348 Other long-term liabilities 62,576 55,038 Total liabilities 2,566,127 2,350,528 Equity: World Fuel shareholders' equity 1,517,174 1,332,961 Noncontrolling interest equity 24,450 13,757 Total equity 1,541,624 1,346,718 Total liabilities and equity $ 4,107,751 $ 3,697,246 WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED - IN THOUSANDS) For the Three Months ended For the Year ended December 31, December 31, 2012 2011 2012 2011 Cash flows from operating activities: Net income including noncontrolling $ 45,025 $ 53,030 $ 201,351 $ 199,202 interest Adjustments to reconcile net income including noncontrolling interest to net cash provided by (used in) operating activities: Depreciation and 9,914 11,419 36,714 40,530 amortization Provision for 377 1,424 4,790 8,173 bad debt Share-based payment award 3,738 2,842 14,079 11,041 compensation costs Other 292 (501 ) (7,193 ) (3,276 ) Change in cash collateral deposits held (18,000 ) 5,252 (11,059 ) 4,957 by financial counterparties Changes in assets and liabilities, 56,174 861 (92,891 ) (403,163 ) net of acquisitions Total 52,495 21,297 (55,560 ) (341,738 ) adjustments Net cash provided by (used in) 97,520 74,327 145,791 (142,536 ) operating activities Cash flows from investing activities: Acquisition of businesses, net of (146,445 ) (10,387 ) (217,782 ) (122,702 ) cash acquired Capital expenditures (9,717 ) (3,685 ) (28,454 ) (19,492 ) Other - 268 (386 ) (2,438 ) Net cash used in investing (156,162 ) (13,804 ) (246,622 ) (144,632 ) activities Cash flows from financing activities: Borrowings (repayments) of 93,096 (4,794 ) 80,236 234,641 debt, net Dividends paid on (2,666 ) (2,654 ) (10,685 ) (10,603 ) common stock Other 1,919 (362 ) (2,693 ) (1,472 ) Net cash provided by (used in) 92,349 (7,810 ) 66,858 222,566 financing activities Effect of exchange rate changes on cash and cash equivalents (368 ) 848 1,298 (2,876 ) Net increase (decrease) in cash and 33,339 53,561 (32,675 ) (67,478 ) cash equivalents Cash and cash equivalents, at 139,401 151,854 205,415 272,893 beginning of period Cash and cash equivalents, at end of $ 172,740 $ 205,415 $ 172,740 $ 205,415 period WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA) For the Three Months For the Year ended ended December 31, December 31, 2012 2011 2012 2011 Non-GAAP financial measures and reconciliation: GAAP net income attributable to $ 42,836 $ 50,062 $ 189,345 $ 194,029 World Fuel Share-based compensation 3,054 1,932 9,637 7,558 expense, net of taxes ^(1) Intangible asset amortization 3,500 5,443 14,037 19,546 expense, net of taxes ^(2) Expenses related to the Multi Service acquisition, net of taxes ^(3) 2,924 - 2,924 - Non-GAAP net income attributable to $ 52,314 $ 57,437 $ 215,943 $ 221,133 World Fuel GAAP diluted earnings per common $ 0.60 $ 0.70 $ 2.64 $ 2.71 share Share-based compensation 0.04 0.03 0.13 0.11 expense, net of taxes Intangible asset amortization 0.05 0.08 0.20 0.27 expense, net of taxes Expenses related to the Multi Service acquisition, net of taxes 0.04 - 0.04 - Non-GAAP diluted earnings per common $ 0.73 $ 0.81 $ 3.01 $ 3.09 share The pre-tax amount of share-based compensation expense was $4,529 ^(1 ^) and $2,840 for the three months ended December 31, 2012 and 2011, respectively, and $14,079 and $11,038 for the year ended December 31, 2012 and 2011, respectively. The pre-tax amount of intangible asset amortization expense was ^(2 ^) $4,950 and $6,895 for the three months ended December 31, 2012 and 2011, respectively, and $18,127 and $25,011 for the year ended December 31, 2012 and 2011, respectively. The pre-tax amount of expenses related to the Multi Service ^(3 ^) acquisition was $4,498 for the three and twelve months ended December 31, 2012. WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION (UNAUDITED - IN THOUSANDS) For the Three Months ended For the Year ended December 31, December 31, 2012 2011 2012 2011 Revenue: Aviation segment $ 3,909,286 $ 3,314,095 $ 14,692,042 $ 12,866,019 Marine segment 3,448,996 3,987,508 14,750,425 14,565,086 Land segment 2,577,531 2,022,344 9,502,871 7,191,749 $ 9,935,813 $ 9,323,947 $ 38,945,338 $ 34,622,854 Gross profit: Aviation segment $ 76,319 $ 69,991 $ 294,601 $ 306,112 Marine segment 47,243 54,151 208,028 195,109 Land segment 39,775 38,144 170,818 133,782 $ 163,337 $ 162,286 $ 673,447 $ 635,003 Income from operations: Aviation segment $ 35,552 $ 29,389 $ 128,153 $ 146,411 Marine segment 20,557 27,965 103,229 95,982 Land segment 12,554 18,707 75,291 62,049 68,663 76,061 306,673 304,442 Corporate overhead - 14,302 11,642 49,650 47,470 unallocated $ 54,361 $ 64,419 $ 257,023 $ 256,972 Contact: World Fuel Services Corporation Ira M. Birns Executive Vice President & Chief Financial Officer or Jason Bewley Vice President Corporate Finance 305-428-8000
World Fuel Services Corporation Reports Fourth Quarter and Full Year Earnings
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