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
World Fuel Services Corporation Reports Solid Second Quarter Results
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