World Fuel Services Corporation Reports First Quarter Results

  World Fuel Services Corporation Reports First Quarter Results

    --Generated Operating Cash Flow of $110 Million in the First Quarter--

Business Wire

MIAMI -- April 30, 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
first quarter net income of $48.7 million or $0.68 diluted earnings per share
compared to $46.4 million or $0.65 diluted earnings per share in the first
quarter of 2012. Non-GAAP net income and diluted earnings per share for the
first quarter, which exclude share-based compensation and amortization of
acquired intangible assets, were $55.0 million and $0.77, respectively,
compared to $52.9 million and $0.74 in 2012.

“We are pleased with our overall performance in the first quarter despite
continuous headwinds we face in our marine segment,” stated Michael J. Kasbar,
president and chief executive officer of World Fuel Services Corporation. “We
continue to perform well in this uncertain global environment, while pursuing
additional growth opportunities.”

The company’s aviation segment generated gross profit of $77.0 million, an
increase of $700 thousand or 1% sequentially, and an increase of $12.1 million
or 19% year-over-year. The company’s marine segment generated gross profit of
$41.7 million, a decrease of $5.6 million or 12% sequentially and $13.4
million or 24% year-over-year. The company’s land segment posted gross profit
of $63.7 million, an increase of $23.9 million or 60% sequentially and $26.5
million or 71% year-over-year.

“We generated $110 million in operating cash flow in the first quarter, our
second consecutive quarter of positive operating cash flow, further
strengthening our financial profile,” said Ira M. Birns, executive vice
president and chief financial officer. “Our solid cash flow performance
combined with our continued focus on driving operating efficiencies should
enhance profitability, while providing greater liquidity to support organic
growth and strategic investment opportunities.”

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, 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 strategic investments, our
ability to operate in an uncertain global environment, as well as our
expectation about our profitability and liquidity. 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 (“SEC”) filings, including the company’s Annual Report on Form 10-K
filed with the SEC on February 21, 2013. 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 SEC
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
                                                March 31,
                                                 2013           2012      
                                                                 
                                                                 
Revenue                                         $ 10,184,029     $ 9,479,055
Cost of revenue                                  10,001,650     9,321,820 
                                                                 
     Gross profit                                182,379        157,235   
                                                                 
Operating expenses:
     Compensation and employee benefits           69,429           54,527
     Provision for bad debt                       1,103            141
     General and administrative                  44,906         43,311    
                                                                 
     Total operating expenses                    115,438        97,979    
                                                                 
     Income from operations                       66,941           59,256
Non-operating expenses, net                      (3,539     )    (4,095    )
                                                                 
Income before income taxes                        63,402           55,161
Provision for income taxes                       12,291         6,615     
                                                                 
Net income including noncontrolling interest      51,111           48,546
Net income attributable to noncontrolling        2,386          2,131     
interest
                                                                 
Net income attributable to World Fuel           $ 48,725        $ 46,415    
                                                                 
Basic earnings per common share                 $ 0.68          $ 0.65      
                                                                 
Basic weighted average common shares             71,288         70,998    
                                                                 
Diluted earnings per common share               $ 0.68          $ 0.65      
                                                                 
Diluted weighted average common shares           71,999         71,774    

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED - IN THOUSANDS)
                                                            
                                                    As of
                                                    March 31,     December 31,
                                                    2013          2012
                                                                  
Assets:
Current assets:
   Cash and cash equivalents                        $ 159,600     $  172,740
   Accounts receivable, net                           2,494,373      2,193,866
   Inventories                                        634,057        572,313
   Prepaid expenses and other current assets         292,918       342,458
                                                                  
          Total current assets                        3,580,948      3,281,377
                                                                  
Property and equipment, net                           119,636        112,525
                                                                  
Goodwill, identifiable intangible and other          708,673       713,849
non-current assets
                                                                  
          Total assets                              $ 4,409,257   $  4,107,751
                                                                  
Liabilities and equity:
Liabilities:
Current liabilities:
   Short-term debt                                  $ 28,362      $  26,065
   Accounts payable                                   2,185,325      1,814,794
   Accrued expenses and other current liabilities    283,654       308,439
                                                                  
          Total current liabilities                   2,497,341      2,149,298
                                                                  
Long-term debt                                        248,312        354,253
Other long-term liabilities                          71,491        62,576
          Total liabilities                          2,817,144     2,566,127
                                                                  
Equity:
   World Fuel shareholders' equity                    1,565,277      1,517,174
   Noncontrolling interest equity                    26,836        24,450
          Total equity                               1,592,113     1,541,624
                                                                  
          Total liabilities and equity              $ 4,409,257   $  4,107,751

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED - IN THOUSANDS)
                                                            
                                                    For the Three Months ended
                                                    March 31,
                                                     2013         2012    
                                                                   
Cash flows from operating activities:
  Net income including noncontrolling interest      $ 51,111      $ 48,546  
  Adjustments to reconcile net income including
    noncontrolling interest to net cash provided by
    operating activities:
          Depreciation and amortization               10,848         9,659
          Provision for bad debt                      1,103          141
          Share-based payment award compensation      3,872          2,904
          costs
          Other                                       (246     )     8,771
          Changes in cash collateral with financial   563            35,094
          counterparties
          Changes in assets and liabilities, net of  42,259       (56,323 )
          acquisitions
                            Total adjustments        58,399       246     
    Net cash provided by operating activities        109,510      48,792  
                                                                   
Cash flows from investing activities:
  Acquisitions and other investments, net of cash     -              (90     )
  acquired
  Capital expenditures                                (12,949  )     (3,948  )
  Other                                              -            (115    )
    Net cash used in investing activities            (12,949  )    (4,153  )
                                                                   
Cash flows from financing activities:
  Repayments of debt, net                             (103,651 )     (1,492  )
  Dividends paid on common stock                      (2,667   )     (2,664  )
  Other                                              (2,735   )    (4,995  )
    Net cash used in financing activities            (109,053 )    (9,151  )
                                                                   
Effect of exchange rate changes on cash and
  cash equivalents                                   (648     )    1,690   
                                                                   
Net (decrease) increase in cash and cash              (13,140  )     37,178
equivalents
                                                                   
Cash and cash equivalents, as of beginning of        172,740      205,415 
period
                                                                   
Cash and cash equivalents, as of end of period      $ 159,600     $ 242,593 

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 ended
                                                   March 31,
                                                      2013           2012
                                                                    
Non-GAAP financial measures and
reconciliation:
                                                                    
GAAP net income attributable to World Fuel         $   48,725       $  46,415
        Share-based compensation expense, net          2,543           2,001
        of income taxes ^(1)
        Intangible asset amortization expense,        3,732          4,466
        net of income taxes ^(2)
Non-GAAP net income attributable to World Fuel     $   55,000       $  52,882
                                                                    
GAAP diluted earnings per common share             $   0.68         $  0.65
        Share-based compensation expense, net          0.04            0.03
        of income taxes ^(1)
        Intangible asset amortization expense,        0.05           0.06
        net of income taxes ^(2)
Non-GAAP diluted earnings per common share         $   0.77         $  0.74
                                                                    
                                                                    
(1) The pre-tax amount of share-based compensation expense was $3,872 and
$2,905 for the three months ended March 31, 2013 and 2012, respectively.
                                                                    
(2) The pre-tax amount of intangible asset amortization expense was $5,845 and
$4,711 for the three months ended March 31, 2013 and 2012, respectively.

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
BUSINESS SEGMENTS INFORMATION
(UNAUDITED - IN THOUSANDS)
                                                     
                                          For the Three Months ended
                                          March 31,
                                           2013          2012
Revenue:
       Aviation segment                   $ 3,930,588    $ 3,411,547
       Marine segment                       3,717,139      3,904,191
       Land segment                        2,536,302     2,163,317
                                          $ 10,184,029   $ 9,479,055
                                                         
Gross profit:
       Aviation segment                   $ 76,984       $ 64,914
       Marine segment                       41,682         55,077
       Land segment                        63,713        37,244
                                          $ 182,379      $ 157,235
                                                         
Income from operations:
       Aviation segment                   $ 34,880       $ 26,833
       Marine segment                       15,259         27,445
       Land segment                        27,380        16,200
                                            77,519         70,478
       Corporate overhead - unallocated    10,578        11,222
                                          $ 66,941       $ 59,256

Contact:

World Fuel Services Corporation
Ira M. Birns
Executive Vice President & Chief Financial Officer
or
Jason Bewley
Vice President Corporate Finance
305-428-8000
 
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