Aviation Segment Achieves Record Volume
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 revenue
10,307,320 9,730,921
30,600,116
28,499,415 Gross profit
186,341 180,752
557,178 510,110
Operating expenses: Compensation and employee
benefits 72,184 65,843 214,358 176,553 Provision for bad debt 1,863
3,631 5,675 4,413 General and administrative
48,091 40,230
137,265 126,482
Total operating expenses
122,138
109,704 357,298
307,448 Income from
operations 64,203 71,048 199,880 202,662 Non-operating expenses,
net
(5,715 )
(3,467 ) (14,025
) (13,087 )
Income before income taxes 58,488 67,581 185,855 189,575 Provision
for income taxes
8,191
14,683 32,090
33,249 Net income including
noncontrolling interest 50,297 52,898 153,765 156,326 Net (loss)
income attributable to noncontrolling interest
(1,175 ) 1,404
2,552 9,817
Net income attributable to World Fuel
$
51,472 $ 51,494
$ 151,213 $
146,509 Basic earnings per common share
$ 0.72 $
0.72 $ 2.12
$ 2.06 Basic weighted
average common shares
71,371
71,216 71,387
71,128 Diluted earnings per common share
$ 0.72 $
0.72 $ 2.10
$ 2.04 Diluted weighted
average common shares
71,877
71,816 71,970
71,791 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 non-current assets
727,598 713,849
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 interest
$ 50,297 $
52,898 $ 153,765
$ 156,326 Adjustments to
reconcile net income including noncontrolling interest to net cash
provided by operating activities: Depreciation and amortization
10,525 9,132 32,812 26,800 Provision for bad debt 1,863 3,631 5,675
4,413 Share-based payment award compensation costs 4,381 4,384
12,578 10,341 Other (413 ) (6,462 ) (462 ) (7,485 ) Changes in cash
collateral with financial counterparties 20,516 134,999 19,793
6,941 Changes in assets and liabilities, net of acquisitions
(25,712 ) (93,388
) (10,414 )
(149,065 ) Total adjustments
11,160 52,296
59,982 (108,055
) Net cash provided by operating activities
61,457 105,194
213,747 48,271
Cash flows from investing activities: Acquisitions
and other investments, net of cash acquired (14,997 ) (42,299 )
(40,412 ) (71,337 ) Capital expenditures (25,642 ) (9,170 ) (50,286
) (18,737 ) Purchase of short-term investments - - (21,588 ) -
Proceeds from the sale of short-term investments - - 21,588 - Other
(469 ) (386
) (469 )
(386 ) Net cash used in investing
activities
(41,108 )
(51,855 ) (91,167
) (90,460 )
Cash flows from financing activities: Borrowings (repayments) of
debt, net 104,385 (50,453 ) 75,180 (12,860 ) Dividends paid on
common stock (2,678 ) (2,669 ) (8,020 ) (8,019 ) Other
(22,025 ) 1,335
(28,431 )
(4,612 ) Net cash provided by (used in)
financing activities
79,682
(51,787 ) 38,729
(25,491 ) Effect of
exchange rate changes on cash and cash equivalents
712 1,173
(826 ) 1,666
Net increase (decrease) in cash and cash equivalents 100,743
2,725 160,483 (66,014 ) Cash and cash equivalents, as of
beginning of period
232,480
136,676 172,740
205,415 Cash and cash
equivalents, as of end of period
$
333,223 $ 139,401
$ 333,223 $
139,401 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
ended For the Nine Months ended September 30, September 30, 2013
2012 2013 2012 Non-GAAP financial measures and
reconciliation: GAAP net income attributable to World Fuel $
51,472 $ 51,494 $ 151,213 $ 146,509 Share-based compensation
expense, net of income taxes (1) 2,909 2,475 8,370 6,583 Intangible
asset amortization expense, net of income taxes (2) 3,501
3,953 10,809 10,537 Non-GAAP net income
attributable to World Fuel $ 57,882 $ 57,922 $ 170,392 $ 163,629
GAAP diluted earnings per common share $ 0.72 $ 0.72 $ 2.10
$ 2.04 Share-based compensation expense, net of income taxes (1)
0.04 0.03 0.12 0.09 Intangible asset amortization expense, net of
income taxes (2) 0.05 0.06 0.15 0.15
Non-GAAP diluted earnings per common share $ 0.81 $ 0.81 $ 2.37 $
2.28
(1)
The pre-tax amount of share-based compensation expense was $4,381
and $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.
(2)
The pre-tax amount of intangible asset amortization expense was
$5,471 and $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 - unallocated
8,924
14,241 29,823
35,348 $ 64,203
$ 71,048 $
199,880 $ 202,662
World Fuel Services CorporationIra M. Birns,
305-428-8000Executive Vice President & Chief Financial
Officer
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