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
World Fuel Services Corporation Reports First Quarter Results
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