World Fuel Services Corporation Reports Solid Second Quarter Results

  World Fuel Services Corporation Reports Solid Second Quarter Results

       Quarterly Volume Surpassed 4 Billion Gallons for the First Time

Business Wire

MIAMI -- July 31, 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
second quarter net income of $51.0 million or $0.71 diluted earnings per share
compared to $48.6 million or $0.68 diluted earnings per share in the second
quarter of 2012. Non-GAAP net income and diluted earnings per share for the
second quarter, which exclude share-based compensation and amortization of
acquired intangible assets, were $57.5 million and $0.80, respectively,
compared to $52.8 million and $0.74 in 2012.

“Our second quarter results once again demonstrate the resilience and
diversity of our business model. We are pleased with our overall performance
especially in our marine segment,” said Michael J. Kasbar, President and Chief
Executive Officer of World Fuel Services Corporation. “We are confident that
we will continue to capitalize on our unique business model in this ever
changing marketplace.”

The company’s aviation segment generated gross profit of $76.0 million, a
decrease of $1 million or 1% sequentially, but an increase of $6.9 million or
10% year-over-year. The company’s marine segment generated gross profit of
$52.3 million, an increase of $10.6 million or 26% sequentially and $600
thousand or 1% year-over-year. The company’s land segment posted gross profit
of $60.1 million, a decrease of $3.6 million or 6% sequentially, but an
increase of $8.9 million or 17% year-over-year.

"We continue to generate positive operating cash flow, with the total amount
generated over the past twelve months exceeding $335 million," said Ira M.
Birns, Executive Vice President and Chief Financial Officer. "While many of
the markets we serve remain challenging, our profitability and cash flow
generation are strong, providing us with opportunities to fund both organic
growth activities and strategic investments."

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 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 capitalize on our business model in a changing marketplace, 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, potential liabilities and the extent
of any insurance coverage, 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      For the Six Months ended
                   June 30,                         June 30,
                    2013          2012          2013          2012       
                                                                     
                                                                     
Revenue            $ 10,479,604     $ 9,618,797     $ 20,663,633     $ 19,097,852
Cost of revenue     10,291,146     9,446,674     20,292,796     18,768,494 
                                                                     
Gross profit        188,458        172,123       370,837        329,358    
                                                                     
Operating
expenses:
  Compensation
  and employee       72,745           56,183          142,174          110,710
  benefits
  Provision for      2,709            641             3,812            782
  bad debt
  General and       44,268         42,941        89,174         86,252     
  administrative
                                                                     
Total operating     119,722        99,765        235,160        197,744    
expenses
                                                                     
Income from          68,736           72,358          135,677          131,614
operations
Non-operating       (4,771     )    (5,525    )    (8,310     )    (9,620     )
expenses, net
                                                                     
Income before        63,965           66,833          127,367          121,994
income taxes
Provision for       11,608         11,951        23,899         18,566     
income taxes
                                                                     
Net income
including            52,357           54,882          103,468          103,428
noncontrolling
interest
Net income
attributable to     1,341          6,282         3,727          8,413      
noncontrolling
interest
                                                                     
Net income
attributable to    $ 51,016        $ 48,600       $ 99,741        $ 95,015     
World Fuel
                                                                     
Basic earnings     $ 0.71          $ 0.68         $ 1.40          $ 1.34       
per common share
                                                                     
Basic weighted
average common      71,516         71,173        71,483         71,083     
shares
                                                                     
Diluted earnings   $ 0.71          $ 0.68         $ 1.38          $ 1.32       
per common share
                                                                     
Diluted weighted
average common      72,018         71,767        72,099         71,773     
shares


WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED - IN THOUSANDS)

                                                As of
                                                    June 30,     December 31,
                                                    2013          2012
                                                                  
Assets:
Current assets:
   Cash and cash equivalents                        $ 232,480     $  172,740
   Accounts receivable, net                           2,587,977      2,193,866
   Inventories                                        551,333        572,313
   Prepaid expenses and other current assets         312,333       342,458
                                                                  
                Total current assets                  3,684,123      3,281,377
                                                                  
Property and equipment, net                           136,851        112,525
                                                                  
Goodwill, identifiable intangible and other          708,164       713,849
non-current assets
                                                                  
                Total assets                        $ 4,529,138   $  4,107,751
                                                                  
Liabilities and equity:
Liabilities:
Current liabilities:
   Short-term debt                                  $ 28,709      $  26,065
   Accounts payable                                   2,210,525      1,814,794
   Accrued expenses and other current liabilities    265,342       308,439
                                                                  
                Total current liabilities             2,504,576      2,149,298
                                                                  
Long-term debt                                        322,642        354,253
Other long-term liabilities                          69,642        62,576
                Total liabilities                    2,896,860     2,566,127
                                                                  
Equity:
   World Fuel shareholders' equity                    1,606,996      1,517,174
   Noncontrolling interest equity                    25,282        24,450
                Total equity                         1,632,278     1,541,624
                                                                  
                Total liabilities and equity        $ 4,529,138   $  4,107,751


WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED - IN THOUSANDS)
                          
                       For the Three Months     For the Six Months
                             ended                     ended
                             June 30,                  June 30,
                             2013        2012         2013        2012
                                                                    
Cash flows from operating
activities:
  Net income including       $ 52,357     $ 54,882     $ 103,468    $ 103,428
  noncontrolling interest
  Adjustments to reconcile
  net income including
    noncontrolling
    interest to net cash
    provided by
    (used in) operating
    activities:
        Depreciation and     11,439       8,009        22,287       17,668
        amortization
        Provision for bad    2,709        641          3,812        782
        debt
        Share-based
        payment award        4,325        3,053        8,197        5,957
        compensation costs
        Other                197          (9,794)      (49)         (1,023)
        Changes in cash
        collateral with      (1,286)      (163,152)    (723)        (128,058)
        financial
        counterparties
        Changes in assets
        and liabilities,     (44,679)     646          (2,420)      (55,677)
        net of
        acquisitions
              Total          (27,295)     (160,597)    31,104       (160,351)
              adjustments
    Net cash provided by
    (used in) operating      25,062       (105,715)    134,572      (56,923)
    activities
                                                                    
Cash flows from investing
activities:
  Acquisitions and other
  investments, net of cash   (7,697)      (28,948)     (7,697)      (29,038)
  acquired
  Capital expenditures       (11,695)     (5,619)      (24,644)     (9,567)
  Purchase of short-term     (21,588)     -            (21,588)     -
  investments
  Proceeds from the sale
  of short-term              21,588       -            21,588       -
  investments
  Other                      -            115          -            -
    Net cash used in         (19,392)     (34,452)     (32,341)     (38,605)
    investing activities
                                                                    
Cash flows from financing
activities:
  Borrowings (repayments)    74,446       39,085       (29,205)     37,593
  of debt, net
  Dividends paid on common   (2,675)      (2,686)      (5,342)      (5,350)
  stock
  Other                      (3,671)      (952)        (6,406)      (5,947)
    Net cash provided by
    (used in) financing      68,100       35,447       (40,953)     26,296
    activities
                                                                    
Effect of exchange rate
changes on cash and
  cash equivalents           (890)        (1,197)      (1,538)      493
                                                                    
Net increase (decrease) in   72,880       (105,917)    59,740       (68,739)
cash and cash equivalents
                                                                    
Cash and cash equivalents,   159,600      242,593      172,740      205,415
as of beginning of period
                                                                    
Cash and cash equivalents,   $ 232,480    $ 136,676    $ 232,480    $ 136,676
as of end of 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 Six Months ended
                        ended
                        June 30,                    June 30,
                        2013         2012          2013          2012
                                                                   
Non-GAAP financial
measures and
reconciliation:
                                                                   
GAAP net income
attributable to         $  51,016     $  48,600     $  99,741      $  95,015
World Fuel
Share-based
compensation               2,918         2,107         5,461          4,108
expense, net of
income taxes ^(1)
Intangible asset
amortization              3,576        2,118        7,308         6,584
expense, net of
income taxes ^(2)
Non-GAAP net income
attributable to         $  57,510     $  52,825     $  112,510     $  105,707
World Fuel
                                                                   
GAAP diluted
earnings per common     $  0.71       $  0.68       $  1.38        $  1.32
share
Share-based
compensation               0.04          0.03          0.08           0.06
expense, net of
income taxes ^(1)
Intangible asset
amortization              0.05         0.03         0.10          0.09
expense, net of
income taxes ^(2)
Non-GAAP diluted
earnings per common     $  0.80       $  0.74       $  1.56        $  1.47
share


        The pre-tax amount of share-based compensation expense was $4,325 and
^(1)    $3,053 for the three months ended June 30, 2013 and 2012,
        respectively, and $8,197 and $5,957 for the six months ended June 30,
        2013 and 2012, respectively.

        The pre-tax amount of intangible asset amortization expense was $5,594
^(2)    and $3,832 for the three months ended June 30, 2013 and 2012,
        respectively, and $11,439 and $8,544 for the six months ended June 30,
        2013 and 2012, respectively.

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
BUSINESS SEGMENTS INFORMATION
(UNAUDITED - IN THOUSANDS)

                     For the Three Months ended   For the Six Months ended
                       June 30,                      June 30,
                       2013          2012           2013          2012
Revenue:
         Aviation      $ 3,745,070    $ 3,547,871    $ 7,675,658    $ 6,959,418
         segment
         Marine          3,967,109      3,767,144      7,684,248      7,671,335
         segment
         Land           2,767,425     2,303,782     5,303,727     4,467,099
         segment
                       $ 10,479,604   $ 9,618,797    $ 20,663,633   $ 19,097,852
                                                                    
Gross profit:
         Aviation      $ 76,041       $ 69,171       $ 153,025      $ 134,085
         segment
         Marine          52,332         51,748         94,014         106,825
         segment
         Land           60,085        51,204        123,798       88,448
         segment
                       $ 188,458      $ 172,123      $ 370,837      $ 329,358
                                                                    
Income from
operations:
         Aviation      $ 33,873       $ 25,960       $ 68,753       $ 52,793
         segment
         Marine          24,062         27,931         39,321         55,376
         segment
         Land           21,122        28,352        48,502        44,552
         segment
                         79,057         82,243         156,576        152,721
         Corporate
         overhead -     10,321        9,885         20,899        21,107
         unallocated
                       $ 68,736       $ 72,358       $ 135,677      $ 131,614

Contact:

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