Consolidated volume increases 19%
year-over-year
Generated operating cash flow of $448 million
in 2015
World Fuel Services Corporation (NYSE: INT) today reported full
year net income of $186.9 million or $2.64 diluted earnings per
share. Excluding the impact of certain one-time items, adjusted
full year net income was $193.3 million or $2.73 adjusted diluted
earnings per share. For 2014, net income as adjusted for one-time
items was $216.7 million or $3.04 adjusted diluted earnings per
share. Non-GAAP net income and diluted earnings per share for the
full year, excluding share-based compensation, amortization of
acquired intangible assets and other one-time items were $225.1
million and $3.18, respectively, compared to $249.0 million and
$3.49 in 2014.
For the fourth quarter, net income was $51.8 million or $0.74
diluted earnings per share. Excluding the impact of one-time items,
adjusted net income was $52.7 million or $0.75 adjusted diluted
earnings per share. In the fourth quarter of 2014, net income as
adjusted for one-time items was $57.5 million or $0.81 diluted
earnings per share. Non-GAAP net income and diluted earnings per
share for the fourth quarter of 2015, excluding share-based
compensation, amortization of acquired intangible assets and other
one-time items were $62.1 million and $0.88, respectively, compared
to $68.0 million and $0.96 in the fourth quarter of 2014.
“Our performance during a period of macroeconomic turmoil in
many of the markets we serve demonstrates the resiliency of our
business model,” stated Michael J. Kasbar, chairman and chief
executive officer of World Fuel Services Corporation. “We continued
to leverage our integrated portfolio of products, services and
technology solutions, while pursuing long-term growth opportunities
that will drive sustainable shareholder value.”
For the full year, the company’s aviation segment generated
gross profit of $361.4 million, an increase of $39.8 million or 12%
year-over-year. The company’s marine segment generated gross profit
of $189.6 million, a decrease of $16.0 million or 8%
year-over-year. The company’s land segment posted gross profit of
$309.5 million, an increase of $23.1 million or 8%
year-over-year.
“Our balance sheet and strong cash flow profile provided us with
the opportunity to pursue strategic initiatives and return $71.0
million to shareholders through our stock repurchase program during
2015,” said Ira M. Birns, executive vice president and chief
financial officer. “For 2016, our strong financial position will
enable us to continue executing on additional organic and strategic
growth opportunities, such as the ExxonMobil transaction announced
this morning.”
Non-GAAP Financial Measures
The non-GAAP financial measures exclude costs associated with
share-based compensation, amortization of acquired intangible
assets, expenses related to acquisitions, deferred revenue purchase
accounting adjustments, the termination of employment agreement,
the executive non-renewal charge and the gain on the sale of the
crude oil joint venture interests (net of certain related operating
expenses) primarily because we do not believe they are reflective
of the Company’s core operating results. We believe the exclusion
of share-based compensation from operating expenses is useful given
the variation in expense that can result from changes in the fair
value of our common stock, the effect of which is unrelated to the
operational conditions that give rise to variations in the
components of our operating costs. Also, we believe the exclusion
of the amortization of acquired intangible assets, the expenses
related to acquisitions, the termination of employment agreement,
the executive non-renewal charge and the gain on the sale of the
crude oil joint venture interests (net of certain related
operating) expenses are useful for purposes of evaluating operating
performance of our core operating results and comparing them period
over period. In accordance with the fair value provisions
applicable to the accounting for business combinations, acquired
deferred revenue is often recorded on the opening balance sheet at
an amount that is lower than the historical carrying value.
Although this acquisition accounting requirement has no impact on
our business or cash flows, it adversely impacts our reported GAAP
revenue in the reporting periods following an acquisition. We
believe that the exclusion of the deferred revenue purchase
accounting adjustment is useful to investors as an additional means
to reflect trends of our business and provides investors with
financial information that facilitates comparison of both
historical and future results. We believe that these non-GAAP
financial measures, when considered in conjunction with our
financial information prepared in accordance with GAAP, are useful
to investors to further aid in evaluating the ongoing financial
performance of the Company and to provide greater transparency as
supplemental information to our GAAP results.
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 common share
may not be comparable to the presentation of such metrics by other
companies. Non-GAAP diluted earnings per common share is computed
by dividing non-GAAP net income attributable to World Fuel and
available to common shareholders by the sum of the weighted average
number of shares of common stock, stock units, restricted stock
entitled to dividends not subject to forfeiture and vested RSUs
outstanding during the period and the number of additional shares
of common stock that would have been outstanding if our outstanding
potentially dilutive securities had been issued. Investors are
encouraged to review the reconciliation of these non-GAAP measures
to their most directly comparable GAAP financial measures.
Information Relating to Forward-Looking
Statements
This release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding our expectations about our strategy
on driving growth and delivering value. 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 12, 2015.
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 global
fuel logistics, transaction management and payment processing
company, principally engaged in the distribution of fuel and
related products and services in the aviation, marine and land
transportation industries. 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, residential 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 BALANCE SHEETS
(UNAUDITED - IN MILLIONS)
As of December 31,
December 31, 2015 2014 Assets: Current assets: Cash and cash
equivalents $ 582.5 $ 302.3 Accounts receivable, net 1,812.6
2,306.4 Inventories 359.1 437.6 Prepaid expenses and other current
assets
500.4 627.1
Total current assets 3,254.6 3,673.4 Property and equipment,
net 225.6 203.4 Goodwill, identifiable intangible and other
non-current assets
1,069.2
1,004.2 Total assets
$
4,549.4 $ 4,881.0
Liabilities and equity: Liabilities: Current liabilities:
Short-term debt $ 25.5 $ 17.9 Accounts payable 1,349.6 1,850.1
Accrued expenses and other current liabilities
387.7 371.3 Total current
liabilities 1,762.8 2,239.3 Long-term debt 746.7 672.0 Other
long-term liabilities
118.5
104.8 Total liabilities
2,628.0
3,016.1 Equity: World Fuel shareholders'
equity 1,911.4 1,855.4 Noncontrolling interest equity
10.0 9.5 Total equity
1,921.4 1,864.9 Total
liabilities and equity
$ 4,549.4
$ 4,881.0 WORLD FUEL
SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED - IN MILLIONS, EXCEPT EARNINGS
PER SHARE DATA) For the Three Months
ended
For the Year ended
December 31, December 31, 2015 2014 2015
2014 Revenue $ 6,731.9 $ 9,779.6 $ 30,379.7 $
43,386.4 Cost of revenue
6,504.0
9,560.1 29,519.2
42,572.8 Gross profit
227.9 219.5
860.5 813.6
Operating expenses: Compensation and employee benefits 95.3 86.2
365.8 319.8 Provision for bad debt 2.3 0.3 7.5 3.8 General and
administrative
62.4
62.0 240.0
220.9 Total operating expenses
160.0 148.5
613.3 544.5
Income from operations 67.9 71.0 247.2 269.1 Non-operating
(expenses) income, net
(6.9 )
12.2 (27.9
) 0.4 Income before
income taxes 61.0 83.2 219.3 269.5 Provision for income taxes
9.5 16.2
36.3 51.1
Net income including noncontrolling interest 51.5 67.0 183.0
218.4 Net loss attributable to noncontrolling interest
(0.3 ) (0.1
) (3.9 )
(3.3 ) Net income attributable to
World Fuel
$ 51.8 $
67.1 $ 186.9
$ 221.7 Basic earnings per
common share
$ 0.75 $
0.95 $ 2.66
$ 3.13 Basic weighted
average common shares
69.5
70.7 70.2
70.8 Diluted earnings per common share
$ 0.74 $
0.94 $ 2.64
$ 3.11 Diluted weighted
average common shares
69.9
71.3 70.7
71.3
Adjusted diluted earnings per common share was $0.75 and $0.81
for the three months ended December 31, 2015 and 2014, respectively
and $2.73 and $3.04 for the year ended December 31, 2015 and 2014,
respectively. Please see the reconciliation of GAAP to Non-GAAP
Financial Measures for a reconciliation of GAAP diluted earnings
per common share to Adjusted diluted earnings per common share.
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED - IN
MILLIONS) For the Three Months ended
For the Year ended December 31, December 31, 2015
2014 2015 2014 Cash flows from
operating activities: Net income including noncontrolling interest
$ 51.5 $
67.0 $ 183.0
$ 218.4
Adjustments to reconcile net income
including noncontrolling interest to net cash provided by operating
activities:
Depreciation and amortization 18.5 17.5 63.4 59.4 Provision for bad
debt 2.3 0.3 7.5 3.8 Share-based payment award compensation costs
3.8 4.5 17.0 15.8 Other (11.4 ) (20.8 ) (18.1 ) (25.2 ) Change in
cash collateral with financial counterparties 40.4 (257.1 ) 133.3
(288.0 ) Changes in assets and liabilities, net of acquisitions
17.2 200.7
61.4
157.0 Total adjustments 70.8
(54.9 )
264.5 (77.2 ) Net
cash provided by operating activities
122.3
12.1
447.5
141.2 Cash flows from investing activities:
Acquisition of businesses, net of cash acquired and other
investments (14.9 ) (42.9 ) (96.9 ) (273.6 ) Capital expenditures
(14.6 ) (13.1 ) (51.0 ) (50.2 ) Escrow payment related to an
assumed obligation of an acquired business - - - (21.7 ) Proceeds
from sale of crude oil joint venture interests - 43.0 - 43.0 Other
(1.2 ) 6.1 3.2 5.4
Net cash used in investing activities (30.7 ) (6.9 )
(144.7 ) (297.1 ) Cash flows from financing
activities: Borrowings of debt, net (112.2 ) (76.8 ) 79.2 205.8
Dividends paid on common stock (4.2 ) (2.6 ) (15.3 ) (10.6 ) Other
(0.6 ) (11.0 ) (81.0 ) (25.7 ) Net cash
(used in) provided by financing activities (117.0 )
(90.4 ) (17.1 ) 169.5 Effect of
exchange rate changes on cash and cash equivalents (1.7 )
(1.0 ) (5.5 ) (3.4 ) Net (decrease)
increase in cash and cash equivalents (27.1 ) (86.2 ) 280.2 10.2
Cash and cash equivalents, as of beginning of period
609.6 388.5
302.3 292.1
Cash and cash equivalents, as of end of period
$
582.5 $ 302.3
$ 582.5 $
302.3 WORLD FUEL SERVICES
CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES (UNAUDITED - IN MILLIONS, EXCEPT
EARNINGS PER SHARE DATA) For the Three
Months ended For the Year ended December 31, December
31, 2015 2014 2015 2014 Non-GAAP
financial measures and reconciliation: GAAP net income attributable
to World Fuel $ 51.8 $ 67.1 $ 186.9 $ 221.7 Expenses related to
acquisitions, net of taxes (1) 0.9 0.3 3.0 1.9 Deferred revenue
purchase accounting adjustment, net of income taxes (2) - - 1.1 -
Termination of employment agreement, net of income taxes (3) - -
2.3 - Executive non-renewal charge, net of income taxes (4) - - -
3.0 Gain on the sale of the crude oil joint venture interests, net
of income taxes (5) - (9.9 ) - (9.9 )
Adjusted net income attributable to World Fuel $ 52.7 $ 57.5 $
193.3 $ 216.7 Share-based compensation expense, net of income taxes
(6) 2.9 2.9 11.4 9.9 Intangible asset amortization expense, net of
income taxes (7) 6.5 7.6 20.4
22.4 Non-GAAP net income attributable to World Fuel $ 62.1 $
68.0 $ 225.1 $ 249.0 GAAP diluted earnings per
common share $ 0.74 $ 0.94 $ 2.64 $ 3.11 Expenses related to
acquisitions, net of taxes (1) 0.01 0.01 0.04 0.03 Deferred revenue
purchase accounting adjustment, net of income taxes (2) - - 0.02 -
Termination of employment agreement, net of income taxes (3) - -
0.03 - Executive non-renewal charge, net of income taxes (4) - - -
0.04 Gain on the sale of the crude oil joint venture interests, net
of income taxes (5) - (0.14 ) - (0.14 )
Adjusted diluted earnings per common share $ 0.75 $ 0.81 $ 2.73 $
3.04 Share-based compensation expense, net of income taxes (6) 0.04
0.04 0.16 0.14 Intangible asset amortization expense, net of income
taxes (7) 0.09 0.11 0.29 0.31
Non-GAAP diluted earnings per common share $ 0.88 $ 0.96
$ 3.18 $ 3.49
(1) The pre-tax amount of the expenses related to acquisitions
was $1.1 and $0.3 for the three months ended December 31, 2015 and
2014, respectively, and $4.1 and $2.1 for the year ended December
31, 2015 and 2014, respectively.
(2) The pre-tax amount of the deferred revenue purchase
accounting adjustment was $1.5 for the year ended December 31,
2015.
(3) The pre-tax amount of the termination of employment
agreement was $3.8 for the year ended December 31, 2015.
(4 )The pre-tax amount of the executive non-renewal charge was
$4.8 for the year ended December 31, 2014.
(5) The pre-tax amount of the gain on the sale of the crude oil
joint venture interests was $16.0 for the three months and the year
ended December 31, 2014.
(6) The pre-tax amount of share-based compensation expense was
$3.9 and $4.4 for the three months ended December 31, 2015 and
2014, respectively, and $16.3 and $14.6 for the year ended December
31, 2015 and 2014, respectively.
(7) The pre-tax amount of intangible asset amortization expense
was $8.4 and $9.2 for the three months ended December 31, 2015 and
2014, respectively, and $27.3 and $29.1 for the year ended December
31, 2015 and 2014, respectively.
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
BUSINESS SEGMENTS INFORMATION (UNAUDITED - IN MILLIONS)
For the Three Months ended
For the Year ended December 31, December 31, 2015
2014 2015 2014 Revenue: Aviation segment $
2,660.6 $ 3,907.0 $ 11,738.2 $ 17,268.8 Marine segment 1,852.9
3,104.7 9,367.2 13,843.3 Land segment
2,218.4
2,767.9 9,274.3
12,274.3 $ 6,731.9
$ 9,779.6 $
30,379.7 $ 43,386.4
Gross profit: Aviation segment $ 86.6 $ 74.7 $ 361.4 $ 321.6 Marine
segment 45.3 59.5 189.6 205.6 Land segment
96.0
85.3 309.5
286.4 $ 227.9 $
219.5 $ 860.5 $
813.6 Income from operations: Aviation segment
$ 30.9 $ 27.8 $ 131.7 $ 142.3 Marine segment 15.7 27.1 73.0 90.0
Land segment
36.1 30.3
103.4 90.3 $ 82.7 $ 85.2 $
308.1 $ 322.6 Corporate overhead - unallocated
14.8 14.2 60.9
53.5 $ 67.9
$ 71.0 $ 247.2
$ 269.1 SALES VOLUME
SUPPLEMENTAL INFORMATION (UNAUDITED - IN MILLIONS) For
the Three Months ended For the Year ended December 31, December 31,
2015 2014 2015 2014 Volume (Gallons): Aviation segment 1,646.5
1,487.4 6,341.9 5,718.2 Marine segment (1) 2,116.6 1,883.7 8,617.7
6,775.3 Land segment
1,382.1
1,125.4 4,932.7
4,246.8 Consolidated total
5,145.2
4,496.5 19,892.3
16,740.3
(1) Converted from metric tons to gallons at a rate of 264
gallons per metric ton. Marine segment metric tons were 8.0 and 7.1
for the three months ended December 31, 2015 and 2014, respectively
and 32.6 and 25.7 for the year ended December 31, 2015 and 2014,
respectively.
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version on businesswire.com: http://www.businesswire.com/news/home/20160211005624/en/
World Fuel Services CorporationIra M. BirnsExecutive Vice
President & Chief Financial OfficerorGlenn Klevitz,
305-428-8000Vice President, Assistant Treasurer
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