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 $34.5 million or $0.57 diluted earnings per share compared to $28.7 million or $0.49 diluted earnings per share in the fourth quarter of 2008. Non-GAAP net income for the fourth quarter, which excludes share-based compensation and amortization of acquired intangible assets, was $37.5 million or $0.62 non-GAAP diluted earnings per share compared to $36.3 million or $0.62 non-GAAP diluted earnings per share in the fourth quarter of 2008.

The company’s aviation segment generated gross profit of $49.1 million in the fourth quarter of 2009, an increase of $6.2 million or 14% sequentially and $14.0 million or 40% year over year. The marine segment generated gross profit of $41.3 million, an increase of $1.1 million or 3% sequentially, but a decrease of 30% from last year’s results. The company’s land segment posted gross profit of $11.6 million in the fourth quarter, flat sequentially, but an increase of $2.0 million or 21% year over year.

“Our superior value proposition and expertise in the marketplace allowed us to continue to perform well in a difficult operating environment,” said Paul H. Stebbins, chairman and chief executive officer of World Fuel Services Corporation. “We continue to deliver solid results while managing risk in what remain soft market conditions and we are well positioned to benefit as the economy recovers.”

“Focus on leveraging our global scale has provided us with a solid platform for growth, both organically and through strategic acquisition,” stated Michael J. Kasbar, president and chief operating officer. “We continue to execute on our strategy, which will enable us to capitalize on further growth opportunities in the marketplace,” added Kasbar.

For the full year, net income was $117.1 million or $1.96 diluted earnings per share compared to $105.0 million or $1.80 diluted earnings per share in 2008. For the full year, non-GAAP net income was $127.9 or $2.13 non-GAAP diluted earnings per share compared to $120.1 million or $2.06 non-GAAP diluted earnings per share in 2008.

“In addition to posting record annual earnings, we closed and integrated two strategic acquisitions, doubled our dividend, and further enhanced business processes and commercial execution, all of which helped drive above average returns to our shareholders,” stated Ira M. Birns, executive vice president and chief financial officer. “Our continued focus on working capital and risk management has allowed us to keep our balance sheet strong and liquid.”

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 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 that involve risks and uncertainties, including, but not limited to, quarterly fluctuations in results, the creditworthiness of customers and counterparties and our ability to collect accounts receivable and settle derivatives contracts, 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 operate, our failure to effectively hedge certain financial risks associated with the use of derivatives, non-performance by counterparties or customers on derivatives contracts, the integration of acquired businesses, uninsured losses, our ability to retain and attract senior management and other key employees 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.

About World Fuel Services Corporation

Headquartered in Miami, Florida, World Fuel Services is a global leader in the marketing and sale of marine, aviation and land fuel products, as well as related services. World Fuel Services sells fuel and delivers services to its clients at more than 6,000 locations in more than 190 countries, including airports, seaports, tanker truck loading terminals and other customer storage locations. With 44 strategically located global offices (including satellite offices), World Fuel Services offers its clients 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 include petroleum distributors, retail petroleum operators, and industrial, commercial and government accounts. For more information, call 305-428-8000 or visit http://www.wfscorp.com.

  WORLD FUEL SERVICES CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA)         For the Three Months ended For the Year ended December 31, December 31, 2009 2008 2009 2008     Revenue $ 3,545,241 $ 2,913,448 $ 11,295,177 $ 18,509,403 Cost of revenue   3,443,285   2,810,001     10,919,586   18,114,020   Gross profit   101,956   103,447     375,591   395,383   Operating expenses: Compensation and employee benefits 36,177 39,899 137,408 140,280 Provision for bad debt 1,856 (818 ) 4,552 16,081 General and administrative   20,033   23,085     79,636   85,282     58,066   62,166     221,596   241,643   Income from operations 43,890 41,281 153,995 153,740 Interest and other expense, net   830   5,849     4,086   16,165   Income before taxes 43,060 35,432 149,909 137,575 Provision for income taxes   8,356   6,818     32,346   32,370  

Net income including noncontrolling

interest 34,704 28,614 117,563 105,205

Less: net income (loss) attributable to

noncontrolling interest   209   (39 )   424   166   Net income attributable to World Fuel $ 34,495 $ 28,653   $ 117,139 $ 105,039   Basic earnings per share $ 0.58 $ 0.49   $ 1.99 $ 1.82   Basic weighted average common shares   59,298   58,304     59,003   57,707   Diluted earnings per share $ 0.57 $ 0.49   $ 1.96 $ 1.80   Diluted weighted average common shares   60,534   58,684     59,901   58,244     The results for the three months ended December 31, 2008 include approximately $4.1 million in pre-tax net foreign currency losses included in Interest and other (expense) income, net, which relate to prior quarterly periods in 2008, none of which were considered material individually or in the aggregate. The out-of-period after-tax amount of the net foreign currency losses was approximately $3.8 million, or $0.06 per diluted share in the fourth quarter. In addition, because these amounts were all within 2008, there was no impact on the income statement for the full fiscal year.     WORLD FUEL SERVICES CORPORATION CONSOLIDATED BALANCE SHEETS (UNAUDITED - IN THOUSANDS)     As of December 31, December 31, 2009 2008   Assets: Current assets: Cash and cash equivalents $ 298,843 $ 314,352 Short-term investments 8,100 8,100 Accounts receivable, net 951,398 676,100 Inventories 126,793 28,726 Short-term derivative assets, net 12,257 72,260 Prepaid expenses and other current assets   66,587   72,612   Total current assets 1,463,978 1,172,150   Property and equipment, net 38,777 35,328   Other assets   238,473   197,148   Total assets $ 1,741,228 $ 1,404,626   Liabilities and equity: Liabilities: Current liabilities: Short-term debt $ 6,684 $ 23,840 Accounts payable 796,978 548,876 Short-term derivative liabilities, net 10,616 66,302 Customer deposits 63,967 40,961 Accrued expenses and other current liabilities   69,497   70,808   Total current liabilities 947,742 750,787   Long-term debt 9,925 9,537 Other long-term liabilities   50,312   36,156 Total liabilities   1,007,979   796,480   Equity: World Fuel shareholders' equity 733,021 607,887 Noncontrolling interest equity   228   259 Total equity   733,249   608,146   Total liabilities and equity $ 1,741,228 $ 1,404,626     WORLD FUEL SERVICES CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED - IN THOUSANDS)         For the Three Months ended For the Year ended December 31, December 31, 2009 2008 2009 2008   Cash flows from operating activities: Net income including noncontrolling interest $ 34,704   $ 28,614   $ 117,563   $ 105,205   Adjustments to reconcile net income including noncontrolling interest to net cash (used in) provided by operating activities: Depreciation and amortization 3,829 4,001 16,956 13,870 Provision for bad debt 1,856 (818 ) 4,552 16,081 Deferred income tax provision (benefit) 1,579 (1,538 ) 7,495 (5,390 ) Share-based payment award compensation costs 2,009 7,866 6,480 14,674

Foreign currency losses

(gains), net 508 (2,154 ) (1,163 ) (652 ) Other 279 (32 ) 1,052 275 Changes in assets and liabilities, net of acquisitions   (83,998 )   157,721     (75,014 )   249,389   Total adjustments   (73,938 )   165,046     (39,642 )   288,247   Net cash (used in) provided by operating activities   (39,234 )   193,660     77,921     393,452     Cash flows used in investing activities   (4,612 )   (738 )   (61,828 )   (100,157 )   Cash flows used in financing activities   (6,257 )   (37,376 )   (34,436 )   (13,372 )   Effect of exchange rate changes on cash and cash equivalents   442     (220 )   2,834     (1,722 )   Net (decrease) increase in cash and cash equivalents (49,661 ) 155,326 (15,509 ) 278,201   Cash and cash equivalents, at beginning of period   348,504     159,026     314,352     36,151     Cash and cash equivalents, at end of period $ 298,843   $ 314,352   $ 298,843   $ 314,352       WORLD FUEL SERVICES CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA)         For the Three Months Ended For the Year Ended December 31, December 31, 2009 2008 2009 2008   Non-GAAP financial measures and reconciliation:   GAAP net income attributable to World Fuel $ 34,495 $ 28,653 $ 117,139 $ 105,039 Share-based compensation expense, net of taxes 1,485 6,363 4,729 11,065 Intangible asset amortization expense, net of taxes   1,499   1,308   5,986   3,997 Non-GAAP net income attributable to World Fuel $ 37,479 $ 36,324 $ 127,854 $ 120,101   GAAP diluted earnings per share $ 0.57 $ 0.49 $ 1.96 $ 1.80 Share-based compensation expense, net of taxes 0.02 0.11

0.07

0.19 Intangible asset amortization expense, net of taxes  

0.03

  0.02   0.10   0.07 Non-GAAP diluted earnings per share $

0.62

$ 0.62 $

2.13

 

$ 2.06    

The share-based compensation expense, net of taxes, amounts in the above table for the three months and year ended December 31, 2008 include the impact of approximately $3.8 million ($4.5 million pre-tax), or $0.07 per diluted share, related to a special bonus award to certain members of executive management that was settled in our common stock in March 2009.

    WORLD FUEL SERVICES CORPORATION BUSINESS SEGMENT INFORMATION (UNAUDITED - IN THOUSANDS)         For the Three Months ended For the Year ended December 31, December 31, 2009 2008 2009 2008 Revenue: Marine segment $ 1,850,133 $ 1,528,801 $ 6,040,643 $ 9,915,291 Aviation segment 1,352,779 1,124,841 4,049,565 7,294,466 Land segment   342,329     259,806     1,204,969     1,299,646   $ 3,545,241   $ 2,913,448   $ 11,295,177   $ 18,509,403     Gross profit: Marine segment $ 41,261 $ 58,730 $ 168,890 $ 203,345 Aviation segment 49,073 35,072 163,730 165,834 Land segment   11,622     9,645     42,971     26,204   $ 101,956   $ 103,447   $ 375,591   $ 395,383     Income from operations: Marine segment $ 23,597 $ 38,123 $ 97,636 $ 121,818 Aviation segment 24,859 14,067 75,462 68,142 Land segment   3,063     2,437     10,778     3,489   51,519 54,627 183,876 193,449 Corporate overhead   (7,629 )   (13,346 )   (29,881 )   (39,709 ) $ 43,890   $ 41,281   $ 153,995   $ 153,740