INT World Fuel Services Corporation

World Fuel Services Corporation (NYSE:INT), a global leader in the marketing and sale of marine, aviation and land fuel products and related services, today reported fourth quarter net income of $18.1 million, ($0.64 and $0.63 per share on a basic and diluted basis, respectively), compared to $17.3 million, ($0.62 and $0.60 per share on a basic and diluted basis, respectively), in the fourth quarter of 2006. Our 2007 fourth quarter results were adversely affected by an impairment charge of $2.4 million relating to the write down of capitalized software development costs associated with an aviation flight planning company acquired in 1998. The after-tax effect of the impairment charge was $1.7 million, or $0.06 per share on a basic and diluted basis. For the full year, net income was $64.8 million ($2.30 and $2.23 per share on a basic and diluted basis, respectively), compared to $63.9 million ($2.33 and $2.21 per share on a basic and diluted basis, respectively) in 2006. Our full year results were impacted by impairment charges relating to the write down of a commercial paper investment and capitalized software development costs, aggregating $3.0 million after-tax, or $0.11 per share on a basic and diluted basis. �While full year results were clearly impacted by strategic investments in people and systems, we finished the year with a strong fourth quarter,� said Paul H. Stebbins, chairman and chief executive officer of World Fuel Services Corporation. �Our aviation segment which delivered strong growth in volumes and gross profit for the year, generated record gross profit of $39.1 million in the fourth quarter, an increase of 18% sequentially and 37% year-over-year. As in the third quarter, our aviation segment benefited from increases in jet fuel prices during the quarter,� added Stebbins. Our marine segment also delivered solid growth in volume and profitability in 2007, generating gross profit of $32.8 million in the fourth quarter, an increase of 22% from the third quarter and 20% year-over-year. �Our marine segment has now generated year-over-year increases in gross profit for twelve out of the last thirteen quarters and while gross profit in our land segment decreased 8% sequentially, gross profit increased 10% year-over-year, our sixth consecutive year-over-year increase in gross profit,� stated Michael J. Kasbar, president and chief operating officer. �During the fourth quarter, the company also refinanced its bank credit facility, increasing availability under the facility to $475 million and extending the terms of such facility through December 2012,� stated Ira M. Birns, Executive Vice President and Chief Financial Officer. �This facility provides us with increased liquidity to support both organic and strategic growth opportunities going forward,� added Birns. FOURTH QUARTER AND FULL YEAR FINANCIAL HIGHLIGHTS ($ in thousands, except per share data) � � Quarter Ended December 31, � Year Ended December 31, 2007 � 2006 2007 � 2006 Revenue $ 4,145,522 $ 2,618,733 $ 13,729,555 $ 10,785,136 Gross profit $ 73,841 $ 57,721 $ 245,272 $ 214,069 Income from operations $ 24,554 $ 18,837 $ 85,888 $ 76,646 Net income $ 18,130 $ 17,269 $ 64,773 $ 63,948 Basic earnings per share $ 0.64 $ 0.62 $ 2.30 $ 2.33 Diluted earnings per share $ 0.63 $ 0.60 $ 2.23 $ 2.21 About World Fuel Services Corporation Headquartered in Miami, Florida, World Fuel Services Corporation is a global leader in the marketing and sale of marine, aviation and land fuel products and related services. World Fuel Services provides fuel and related services at more than 2,500 airports, seaports and tanker truck loading terminals worldwide. With 43 offices (including satellite offices) strategically located throughout the world, World Fuel Services offers its customers a value-added outsource service for the supply, quality control, logistical support and price risk management of marine, aviation and land fuel. The Company�s global team of market makers provides deep domain expertise in all aspects of marine, aviation and land fuel management. World Fuel Services� marine customers include international container and tanker fleets and time-charter operators, as well as the United States and foreign governments. Aviation customers include commercial airlines, cargo carriers and corporate clientele, as well as the United States and foreign governments. Land customers are primarily petroleum distributors. For more information, call (305) 428-8000 or visit http://www.wfscorp.com. Information Relating to Forward-Looking Statements With the exception of historical information in this news release, this document includes forward-looking statements that involve risks and uncertainties, including, but not limited to, quarterly fluctuations in results, the management of growth, fluctuations in world oil prices or foreign currency, major changes in political, economic, regulatory, or environmental conditions, the loss of key customers, suppliers or key members of senior management, uninsured losses, competition, credit risk associated with accounts and notes receivable, and other risks detailed from time to time in the Company�s Securities and Exchange Commission filings. Actual results may differ materially from any forward-looking statements set forth herein. WORLD FUEL SERVICES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA) � � � For the Three Months Ended For the Year Ended December 31, December 31, 2007 2006 2007 2006 � Revenue $ 4,145,522 $ 2,618,733 $ 13,729,555 $ 10,785,136 Cost of sales � 4,071,681 � 2,561,012 � 13,484,283 � 10,571,067 Gross profit � 73,841 � 57,721 � 245,272 � 214,069 � Operating expenses: Compensation and employee benefits 26,104 21,828 94,809 82,987 Executive severance costs - - - 1,545 Provision for bad debts 1,298 2,292 1,892 3,869 General and administrative � 21,885 � 14,764 � 62,683 � 49,022 � 49,287 � 38,884 � 159,384 � 137,423 � Income from operations 24,554 18,837 85,888 76,646 � Interest and other income, net � 582 � 2,278 � 698 � 4,753 � Income before income taxes 25,136 21,115 86,586 81,399 Provision for income taxes � 6,876 � 3,698 � 21,235 � 17,353 18,260 17,417 65,351 64,046 � Minority interest in income of consolidated subsidiaries � 130 � 148 � 578 � 98 � Net income $ 18,130 $ 17,269 $ 64,773 $ 63,948 � Basic earnings per share $ 0.64 $ 0.62 $ 2.30 $ 2.33 � Basic weighted average shares � 28,213 � 27,835 � 28,102 � 27,467 � Diluted earnings per share $ 0.63 $ 0.60 $ 2.23 $ 2.21 � Diluted weighted average shares � 29,004 � 29,021 � 29,062 � 28,923 WORLD FUEL SERVICES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED - IN THOUSANDS) � � As of December 31, 2007 2006 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 36,151 $ 176,495 Restricted cash 10,000 - Short-term investments 8,100 12,500 Accounts and notes receivable, net 1,370,656 860,084 Inventories 103,029 74,519 Receivables related to derivative contracts 86,531 37,070 Prepaid expenses and other current assets � 50,841 � 35,423 � Total current assets 1,665,308 1,196,091 � PROPERTY AND EQUIPMENT, NET 36,870 26,730 � GOODWILL 52,104 44,321 � IDENTIFIABLE INTANGIBLE ASSETS, NET 26,478 4,961 � OTHER ASSETS � 17,286 � 5,297 � $ 1,798,046 $ 1,277,400 � LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term debt $ 53 $ 10 Accounts payable 1,066,971 720,790 Payables related to derivative contracts 88,302 34,209 Customer deposits 38,452 23,399 Accrued expenses and other current liabilities � 37,333 � 48,353 � Total current liabilities 1,231,111 826,761 � DEBT � 45,191 20,062 � LONG-TERM LIABILITIES 37,867 4,608 � SHAREHOLDERS' EQUITY � 483,877 � 425,969 � $ 1,798,046 $ 1,277,400 WORLD FUEL SERVICES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED - IN THOUSANDS) � � � For the Three Months Ended For the Year Ended December 31, December 31, 2007 2006 2007 2006 Cash flows from operating activities: Net income $ 18,130 � $ 17,269 � $ 64,773 � $ 63,948 � Adjustments to reconcile net income to net cash (used in) provided by operating activities: Provision for bad debts 1,298 2,292 1,892 3,869 Depreciation and amortization 2,710 1,431 6,901 4,866 Deferred income tax (benefit) provision (2,373 ) 814 (3,020 ) 4,187 Unrealized derivatives losses (gains), net 715 561 107 (856 ) Share based payment compensation costs for employees and non-employee directors 1,731 2,152 7,166 7,035 Software write-down 2,445 - 2,445 - Impairment on short-term investments - - 1,900 - Other non-cash operating charges (credits) 688 133 449 73 Changes in operating assets and liabilities: Accounts receivable (175,411 ) (31,831 ) (454,293 ) (174,348 ) Inventories 11,481 (7,912 ) (26,780 ) (37,871 ) Other current assets (44,704 ) (3,155 ) (57,182 ) 3,607 Other assets (7,623 ) 29 (9,094 ) (26 ) Accounts payable 88,980 59,979 316,277 185,215 Accrued expenses and other current liabilities 41,765 12,175 60,351 8,406 Other � 9,074 � � (746 ) � 10,181 � � (221 ) Total adjustments � (69,224 ) � 35,922 � � (142,700 ) � 3,936 � Net cash (used in) provided by operating activities � (51,094 ) � 53,191 � � (77,927 ) � 67,884 � Cash flows from investing activities: Capital expenditures (3,912 ) (4,698 ) (16,581 ) (20,031 ) Purchases of short-term investments - (27,500 ) (30,060 ) (58,555 ) Proceeds from the sale of short-term investments - 25,000 32,560 56,055 Acquisition of business, net of cash acquired � (54,907 ) � - � � (54,907 ) � (2,646 ) Net cash used in investing activities � (58,819 ) � (7,198 ) � (68,988 ) � (25,177 ) Cash flows from financing activities: Dividends paid on common stock (1,064 ) (1,066 ) (4,253 ) (4,160 ) Borrowings (repayments), net, under revolving credit facility 20,000 - 20,000 - Restricted cash (10,000 ) - (10,000 ) - Other � 2,675 � � 1,370 � � 824 � � 4,664 � Net cash used in financing activities � 11,611 � � 304 � � 6,571 � � 504 � Net (decrease) increase in cash and cash equivalents (98,302 ) 46,297 (140,344 ) 43,211 Cash and cash equivalents, at beginning of period � 134,453 � � 130,198 � � 176,495 � � 133,284 � Cash and cash equivalents, at end of period $ 36,151 � $ 176,495 � $ 36,151 � $ 176,495 �