World Fuel Services Corporation Reports Third Quarter Results Aviation Segment Achieves Record Volume Business Wire MIAMI -- October 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 third quarter net income of $51.5 million or $0.72 diluted earnings per share compared to $51.5 million or $0.72 diluted earnings per share in the third quarter of 2012. Non-GAAP net income and diluted earnings per share for the third quarter, which exclude share-based compensation and amortization of acquired intangible assets, were $57.9 million and $0.81, respectively, compared to $57.9 million and $0.81 in 2012. “Considering current market conditions, our overall performance in the third quarter was strong,” said Michael J. Kasbar, president and chief executive officer of World Fuel Services Corporation. “Our global team remains focused on growing our value proposition in the fuel, services and billing and payment sectors, across all three of our business segments, driving greater value for our customers and suppliers.” The company’s aviation segment generated gross profit of $89.8 million, an increase of $13.7 million or 18% sequentially and $5.6 million or 7% year-over-year. The company’s marine segment generated gross profit of $40.2 million, a decrease of $12.1 million or 23% sequentially and $13.7 million or 25% year-over-year. The company’s land segment posted gross profit of $56.4 million, a decrease of $3.7 million or 6% sequentially, but an increase of $13.8 million or 32% year-over-year. "We repurchased $20 million of our common stock in the open market during the third quarter," said Ira M. Birns, executive vice president and chief financial officer of World Fuel Services Corporation. "Our strong cash flow combined with the recently announced expansion of our banking facility further enhances our liquidity profile, increasing our capacity to fund both organic and strategic growth opportunities as well as opportunistic repurchases of our stock, all driving additional value for our shareholders." 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 funding opportunities, our ability to drive value, as well as our expectation about our 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 outcome of pending litigation and other proceedings, 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 Nine Months ended September 30, September 30, 2013 2012 2013 2012 Revenue $ 10,493,661 $ 9,911,673 $ 31,157,294 $ 29,009,525 Cost of 10,307,320 9,730,921 30,600,116 28,499,415 revenue Gross profit 186,341 180,752 557,178 510,110 Operating expenses: Compensation and employee 72,184 65,843 214,358 176,553 benefits Provision for 1,863 3,631 5,675 4,413 bad debt General and 48,091 40,230 137,265 126,482 administrative Total operating 122,138 109,704 357,298 307,448 expenses Income from 64,203 71,048 199,880 202,662 operations Non-operating (5,715 ) (3,467 ) (14,025 ) (13,087 ) expenses, net Income before 58,488 67,581 185,855 189,575 income taxes Provision for 8,191 14,683 32,090 33,249 income taxes Net income including 50,297 52,898 153,765 156,326 noncontrolling interest Net (loss) income attributable (1,175 ) 1,404 2,552 9,817 to noncontrolling interest Net income attributable $ 51,472 $ 51,494 $ 151,213 $ 146,509 to World Fuel Basic earnings per common $ 0.72 $ 0.72 $ 2.12 $ 2.06 share Basic weighted average common 71,371 71,216 71,387 71,128 shares Diluted earnings per $ 0.72 $ 0.72 $ 2.10 $ 2.04 common share Diluted weighted 71,877 71,816 71,970 71,791 average common shares WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED - IN THOUSANDS) As of September 30, December 31, 2013 2012 Assets: Current assets: Cash and cash equivalents $ 333,223 $ 172,740 Accounts receivable, net 2,514,683 2,193,866 Inventories 614,293 572,313 Prepaid expenses and other current assets 313,590 342,458 Total current assets 3,775,789 3,281,377 Property and equipment, net 153,013 112,525 Goodwill, identifiable intangible and other 727,598 713,849 non-current assets Total assets $ 4,656,400 $ 4,107,751 Liabilities and equity: Liabilities: Current liabilities: Short-term debt $ 28,642 $ 26,065 Accounts payable 2,154,129 1,814,794 Accrued expenses and other current liabilities 302,875 308,439 Total current liabilities 2,485,646 2,149,298 Long-term debt 430,003 354,253 Other long-term liabilities 78,495 62,576 Total liabilities 2,994,144 2,566,127 Equity: World Fuel shareholders' equity 1,639,732 1,517,174 Noncontrolling interest equity 22,524 24,450 Total equity 1,662,256 1,541,624 Total liabilities and equity $ 4,656,400 $ 4,107,751 WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED - IN THOUSANDS) For the Three Months ended For the Nine Months ended September 30, September 30, 2013 2012 2013 2012 Cash flows from operating activities: Net income including noncontrolling $ 50,297 $ 52,898 $ 153,765 $ 156,326 interest Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities: Depreciation and 10,525 9,132 32,812 26,800 amortization Provision for bad 1,863 3,631 5,675 4,413 debt Share-based payment award compensation 4,381 4,384 12,578 10,341 costs Other (413 ) (6,462 ) (462 ) (7,485 ) Changes in cash collateral with 20,516 134,999 19,793 6,941 financial counterparties Changes in assets and liabilities, net (25,712 ) (93,388 ) (10,414 ) (149,065 ) of acquisitions Total adjustments 11,160 52,296 59,982 (108,055 ) Net cash provided by 61,457 105,194 213,747 48,271 operating activities Cash flows from investing activities: Acquisitions and other investments, (14,997 ) (42,299 ) (40,412 ) (71,337 ) net of cash acquired Capital expenditures (25,642 ) (9,170 ) (50,286 ) (18,737 ) Purchase of short-term - - (21,588 ) - investments Proceeds from the sale of short-term - - 21,588 - investments Other (469 ) (386 ) (469 ) (386 ) Net cash used in (41,108 ) (51,855 ) (91,167 ) (90,460 ) investing activities Cash flows from financing activities: Borrowings (repayments) of 104,385 (50,453 ) 75,180 (12,860 ) debt, net Dividends paid on (2,678 ) (2,669 ) (8,020 ) (8,019 ) common stock Other (22,025 ) 1,335 (28,431 ) (4,612 ) Net cash provided by (used in) financing 79,682 (51,787 ) 38,729 (25,491 ) activities Effect of exchange rate changes on cash and cash equivalents 712 1,173 (826 ) 1,666 Net increase (decrease) in cash 100,743 2,725 160,483 (66,014 ) and cash equivalents Cash and cash equivalents, as of 232,480 136,676 172,740 205,415 beginning of period Cash and cash equivalents, as of $ 333,223 $ 139,401 $ 333,223 $ 139,401 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 Nine Months ended ended September 30, September 30, 2013 2012 2013 2012 Non-GAAP financial measures and reconciliation: GAAP net income attributable to $ 51,472 $ 51,494 $ 151,213 $ 146,509 World Fuel Share-based compensation expense, net of 2,909 2,475 8,370 6,583 income taxes ^(1) Intangible asset amortization expense, net of 3,501 3,953 10,809 10,537 income taxes ^(2) Non-GAAP net income attributable to $ 57,882 $ 57,922 $ 170,392 $ 163,629 World Fuel GAAP diluted earnings per common $ 0.72 $ 0.72 $ 2.10 $ 2.04 share Share-based compensation expense, net of 0.04 0.03 0.12 0.09 income taxes ^(1) Intangible asset amortization expense, net of 0.05 0.06 0.15 0.15 income taxes ^(2) Non-GAAP diluted earnings per common $ 0.81 $ 0.81 $ 2.37 $ 2.28 share The pre-tax amount of share-based compensation expense was $4,381 and (1) $3,592 for the three months ended September 30, 2013 and 2012, respectively, and $12,578 and $9,549 for the nine months ended September 30, 2013 and 2012, respectively. The pre-tax amount of intangible asset amortization expense was $5,471 and (2) $4,633 for the three months ended September 30, 2013 and 2012, respectively, and $16,910 and $13,177 for the nine months ended September 30, 2013 and 2012, respectively. WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES BUSINESS SEGMENTS INFORMATION (UNAUDITED - IN THOUSANDS) For the Three Months ended For the Nine Months ended September 30, September 30, 2013 2012 2013 2012 Revenue: Aviation segment $ 4,179,018 $ 3,823,338 $ 11,854,676 $ 10,782,756 Marine segment 3,575,777 3,630,094 11,260,025 11,301,429 Land segment 2,738,866 2,458,241 8,042,593 6,925,340 $ 10,493,661 $ 9,911,673 $ 31,157,294 $ 29,009,525 Gross profit: Aviation segment $ 89,758 $ 84,197 $ 242,783 $ 218,282 Marine segment 40,223 53,960 134,237 160,785 Land segment 56,360 42,595 180,158 131,043 $ 186,341 $ 180,752 $ 557,178 $ 510,110 Income from operations: Aviation segment $ 41,002 $ 39,808 $ 109,755 $ 92,601 Marine segment 17,019 27,296 56,340 82,672 Land segment 15,106 18,185 63,608 62,737 73,127 85,289 229,703 238,010 Corporate overhead - 8,924 14,241 29,823 35,348 unallocated $ 64,203 $ 71,048 $ 199,880 $ 202,662 Contact: World Fuel Services Corporation Ira M. Birns, 305-428-8000 Executive Vice President & Chief Financial Officer
World Fuel Services Corporation Reports Third Quarter Results
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