Record volume across all three business
segments
Generated operating cash flow of $147 million
during the quarter
World Fuel Services Corporation (NYSE: INT) today reported third
quarter net income of $49.6 million or $0.71 diluted earnings per
share compared to $55.7 million or $0.78 diluted earnings per share
in the third quarter of 2014. Excluding certain one-time
acquisition-related expenses, third quarter net income was $51.7
million or $0.74 diluted earnings per share compared to $56.1
million or $0.79 diluted earnings per share in the third quarter of
2014. Non-GAAP net income and diluted earnings per share for the
third quarter, excluding share-based compensation, amortization of
acquired intangible assets and certain one-time acquisition-related
expenses were $60.1 million and $0.86, respectively, compared to
$64.6 million and $0.91 in 2014.
“We were pleased with our results this quarter as we experienced
strong seasonality in our aviation business as well as a rebound in
both our marine and land segments’ profitability,” stated Michael
J. Kasbar, chairman and chief executive officer of World Fuel
Services Corporation. “Our core businesses remain solid and we
continue to focus on our long-term strategy to drive growth and
deliver value to our customers, suppliers and shareholders.”
The company’s aviation segment generated gross profit of $106.8
million, an increase of $10.6 million or 11% year-over-year. The
company’s marine segment generated gross profit of $48.6 million, a
decrease of $0.8 million or 2% year-over-year. The company’s land
segment posted gross profit of $71.3 million, an increase of $2.3
million or 3% year-over-year.
“We posted strong cash flow from operations this quarter,
bringing our year-to-date total to more than $325 million,” said
Ira M. Birns, executive vice president and chief financial officer.
“Our effective balance sheet management and related solid cash flow
provided us with the opportunity to both deploy capital toward our
strategic initiatives and return approximately $40 million to
shareholders through stock repurchases this quarter.”
Non-GAAP Financial Measures
The non-GAAP financial measures exclude costs associated with
share-based compensation, amortization of acquired intangible
assets, deferred revenue purchase accounting adjustments, expenses
related to the acquisitions, the termination of an employment
agreement and the executive non-renewal charge 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 the acquisitions, the
termination of an employment agreement and the executive
non-renewal charge 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 September 30, December 31, 2015 2014 Assets:
Current assets: Cash and cash equivalents $ 609.6 $ 302.3 Accounts
receivable, net 2,039.1 2,306.4 Inventories 414.0 437.6 Prepaid
expenses and other current assets
638.0
627.1 Total current assets 3,700.7 3,673.4
Property and equipment, net 224.7 203.4 Goodwill,
identifiable intangible and other non-current assets
1,047.5 1,003.7 Total
assets
$ 4,972.9 $
4,880.5 Liabilities and equity: Liabilities:
Current liabilities: Short-term debt $ 23.2 $ 17.9 Accounts payable
1,629.2 1,850.1 Accrued expenses and other current liabilities
453.6 371.3 Total
current liabilities 2,106.0 2,239.3 Long-term debt 861.2
672.0 Other long-term liabilities
129.9
104.3 Total liabilities
3,097.1
3,015.6 Equity: World Fuel shareholders'
equity 1,864.9 1,855.4 Noncontrolling interest equity
10.9 9.5 Total equity
1,875.8 1,864.9 Total
liabilities and equity
$ 4,972.9
$ 4,880.5 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 Nine Months ended September 30, September 30, 2015
2014 2015 2014 Revenue $ 7,810.7 $ 11,713.5 $
23,647.8 $ 33,606.8 Cost of revenue
7,584.0
11,498.9
23,015.2 33,012.7
Gross profit
226.7
214.6 632.6
594.1 Operating expenses: Compensation
and employee benefits 94.2 85.2 270.5 233.6 Provision for bad debt
1.6 1.2 5.2 3.5 General and administrative
64.5
54.1 177.6
158.8 Total operating
expenses
160.3 140.5
453.3 395.9
Income from operations 66.4 74.1 179.3 198.2
Non-operating expenses, net
(6.0 )
(6.2 ) (21.0
) (11.9 )
Income before income taxes 60.4 67.9 158.3 186.3 Provision for
income taxes
11.8
13.4 26.8
35.0 Net income including noncontrolling
interest 48.6 54.5 131.5 151.3 Net loss attributable to
noncontrolling interest
(1.0 )
(1.2 ) (3.6
) (3.3 ) Net
income attributable to World Fuel
$ 49.6
$ 55.7 $
135.1 $ 154.6
Basic earnings per common share
$
0.71 $ 0.79
$ 1.92 $
2.18 Basic weighted average common
shares
70.0 70.8
70.5 70.8
Diluted earnings per common share
$
0.71 $ 0.78
$ 1.90 $
2.17 Diluted weighted average common
shares
70.3 71.3
71.0 71.3
WORLD FUEL SERVICES
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED - IN MILLIONS) For the Three Months
ended For the Nine Months ended September 30, September 30, 2015
2014 2015 2014 Cash flows from operating activities: Net
income including noncontrolling interest
$
48.6 $ 54.4
$ 131.5 $
151.3 Adjustments to reconcile net income
including noncontrolling interest to net cash provided by operating
activities: Depreciation and amortization 16.5 14.8 44.9 41.9
Provision for bad debt 1.6 1.2 5.2 3.5 Share-based payment award
compensation costs 4.8 3.6 13.2 11.3 Other (17.0 ) (8.8 ) (6.7 )
(4.4 ) Change in cash collateral with financial counterparties
(56.3 ) (29.7 ) 92.9 (30.9 ) Changes in assets and liabilities, net
of acquisitions 149.2 (8.4 )
44.2 (43.6 ) Total adjustments
98.8 (27.3 )
193.7
(22.2 ) Net cash provided by operating activities
147.4 27.1
325.2 129.1 Cash flows
from investing activities: Acquisition of businesses, net of cash
acquired and other investments (75.5 ) (66.5 ) (82.0 ) (230.7 )
Capital expenditures (14.5 ) (17.1 ) (36.4 ) (37.1 ) Escrow payment
related to an assumed obligation of an acquired business - - -
(21.7 ) Other - 0.2 4.4
(0.7 )
Net cash used in investing activities
(90.0 ) (83.4 ) (114.0 ) (290.2 )
Cash flows from financing activities: Borrowings of debt,
net 110.9 65.6 191.4 282.5 Dividends paid on common stock (4.2 )
(2.6 ) (11.1 ) (7.9 ) Other (41.5 ) (11.3 )
(80.4 ) (14.7 ) Net cash provided by financing activities
65.2 51.7 99.9
259.9 Effect of exchange rate changes on cash and
cash equivalents (2.7 ) (3.4 ) (3.8 )
(2.3 ) Net increase (decrease) in cash and cash equivalents
119.9 (8.0 ) 307.3 96.5 Cash and cash equivalents, as of
beginning of period
489.7
396.6 302.3
292.1 Cash and cash equivalents, as of
end of period
$ 609.6
$ 388.6 $
609.6 $ 388.6
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
Nine Months ended September 30, September 30, 2015 2014 2015 2014
Non-GAAP financial measures and reconciliation: GAAP
net income attributable to World Fuel $ 49.6 $ 55.7 $ 135.1 $ 154.6
Share-based compensation expense, net of income taxes (1) 3.3 2.5
8.5 7.0 Intangible asset amortization expense, net of income taxes
(2) 5.1 6.0 13.9 14.8 Expenses related to acquisitions, net of
taxes (3) 2.1 0.4 2.1 1.5 Deferred revenue purchase accounting
adjustment, net of income taxes (4) - - 1.1 - Termination of
employment agreement, net of income taxes (5) - - 2.3 - Executive
non-renewal charge, net of income taxes (6) - -
- 3.0 Non-GAAP net income attributable to World Fuel
$ 60.1 $ 64.6 $ 163.0 $ 180.9 GAAP diluted earnings per
common share $ 0.71 $ 0.78 $ 1.90 $ 2.17 Share-based compensation
expense, net of income taxes (1) 0.05 0.04 0.12 0.10 Intangible
asset amortization expense, net of income taxes (2) 0.07 0.08 0.20
0.21 Expenses related to acquisitions, net of taxes (3) 0.03 0.01
0.03 0.02 Deferred revenue purchase accounting adjustment, net of
income taxes (4) - - 0.02 - Termination of employment agreement,
net of income taxes (5) - - 0.03 - Executive non-renewal charge,
net of income taxes (6) - - - 0.04
Non-GAAP diluted earnings per common share $ 0.86 $ 0.91 $ 2.30 $
2.54
(1) The pre-tax amount of share-based
compensation expense was $4.8 and $3.6 million for the three
months ended September 30, 2015 and 2014, respectively, and $12.4
and $10.2 for the nine months ended September 30, 2015 and 2014
respectively.
(2) The pre-tax amount of intangible asset
amortization expense was $6.7 million for the three
months ended September 30, 2015 and 2014, respectively, and $18.9
and $19.7 for the nine months ended September 30, 2015 and 2014,
respectively.
(3) The pre-tax amount of the expenses
related to acquisitions was $3.0 and $0.6 million for the
three months ended September 30, 2015 and 2014, respectively, and
$3.0 and $1.7 for the nine months ended September 30, 2015 and 2014
respectively.
(4) The pre-tax amount of the deferred
revenue purchase accounting adjustment was $1.5 million for
the nine months ended September 30, 2015.
(5) The pre-tax amount of the termination
of employment agreement was $3.8 million for the nine
months ended September 30, 2015.
(6) The pre-tax amount of the executive
non-renewal charge was $4.8 million for the nine months
ended September 30, 2014.
WORLD FUEL
SERVICES CORPORATION AND SUBSIDIARIES BUSINESS SEGMENTS
INFORMATION (UNAUDITED - IN MILLIONS) For the Three
Months ended For the Nine Months ended September 30, September 30,
2015 2014 2015 2014 Revenue: Aviation segment $ 2,995.3 $ 4,675.6 $
9,077.6 $ 13,361.8 Marine segment 2,388.1 3,725.6 7,514.3 10,738.6
Land segment
2,427.3
3,312.3 7,055.9
9,506.4 $ 7,810.7
$ 11,713.5 $
23,647.8 $ 33,606.8
Gross profit: Aviation segment $ 106.8 $ 96.2 $ 274.8 $ 246.9
Marine segment 48.6 49.4 144.3 146.1 Land segment
71.3 69.0
213.5 201.1 $
226.7 $ 214.6 $
632.6 $ 594.1 Income
from operations: Aviation segment $ 47.0 $ 47.3 $ 100.8 $ 114.5
Marine segment 17.5 20.9 57.3 62.9 Land segment
19.1 19.1 67.3
60.0 $ 83.6 $ 87.3 225.4 237.4 Corporate
overhead - unallocated
17.2
13.2 46.1 39.2
$ 66.4 $ 74.1
$ 179.3 $ 198.2
SALES VOLUME SUPPLEMENTAL
INFORMATION (UNAUDITED - IN MILLIONS) For the Three
Months ended For the Nine Months ended September 30, September 30,
2015 2014 2015 2014 Volume (Gallons): Aviation segment 1,673.3
1,508.5 4,695.4 4,230.8 Marine segment (1) 2,263.4 1,705.5 6,501.1
4,891.6 Land segment
1,259.1
1,101.6 3,550.6
3,121.4 Consolidated total
5,195.8
4,315.6 14,747.1
12,243.8
(1) Converted from metric tons to gallons
at a rate of 264 gallons per metric ton. Marine segment metric
tonswere 8.6 and 6.5 for the three months ended September 30, 2015
and September 30, 2014, respectively and 24.6and 18.5 for the nine
months ended September 30, 2015 and September 30, 2014,
respectively.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151028006712/en/
World Fuel Services CorporationIra M. Birns, Executive Vice
President &Chief Financial OfficerorGlenn KlevitzVice
President, Assistant Treasurer305-428-8000
World Fuel Services (NYSE:INT)
Historical Stock Chart
From Mar 2024 to Apr 2024
World Fuel Services (NYSE:INT)
Historical Stock Chart
From Apr 2023 to Apr 2024