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World Fuel Services Corporation Reports Third Quarter Results



  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
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