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 first quarter net income of $33.7 million or $0.56 diluted earnings per share compared to $25.8 million or $0.44 diluted earnings per share in the first quarter of 2009. Non-GAAP net income for the first quarter, which excludes share-based compensation and amortization of acquired intangible assets, was $36.2 million or $0.60 non-GAAP diluted earnings per share compared to $28.3 million or $0.48 non-GAAP diluted earnings per share in the first quarter of 2009.

The company’s aviation segment generated gross profit of $48.4 million in the first quarter of 2010, a decrease of $0.7 million or 1% sequentially, but an increase of $16.4 million or 51% year-over-year. The marine segment generated gross profit of $39.4 million, decreases of $1.9 million or 5% sequentially, and $7.7 million or 16% from last year’s results. The company’s land segment posted gross profit of $11.1 million in the first quarter, a decrease of 5% sequentially, but an increase of $2.8 million or 34% year-over-year.

“While we are beginning to see slight recoveries in certain markets, we continue our disciplined approach to managing credit and risk,” said Paul H. Stebbins, chairman and chief executive officer of World Fuel Services Corporation. “Our aviation segment increased volumes for the fourth consecutive quarter and generated record operating profit during the first quarter of 2010.”

“Our focus on strategic initiatives continues to diversify our business model within each segment and into new markets and geographies,” stated Michael J. Kasbar, president and chief operating officer. “And our commitment to operational excellence has enabled us to continue to strengthen our global platform for growth.”

“The strength of our balance sheet remains extremely valuable in the current market environment,” stated Ira M. Birns, executive vice president and chief financial officer. “Our solid liquidity profile should enable us to continue investing in organic and external growth opportunities such as the acquisition of Lakeside Oil Company announced a few weeks ago.”

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 200 countries, including airports, seaports, tanker truck loading terminals and other customer storage locations. With 44 strategically located global 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 March 31, 2010 2009     Revenue $ 3,918,021 $ 2,013,943 Cost of revenue   3,819,203   1,926,608     Gross profit   98,818   87,335     Operating expenses: Compensation and employee benefits 34,801 33,793 Provision for bad debt 369 458 General and administrative   21,523   19,979       56,693   54,230     Income from operations 42,125 33,105 Interest and other expense, net   604   1,356     Income before income taxes 41,521 31,749 Provision for income taxes   7,681   5,930     Net income including noncontrolling interest 33,840 25,819 Less: net income (loss) attributable to noncontrolling interest   137   (11 )   Net income attributable to World Fuel $ 33,703 $ 25,830     Basic earnings per share $ 0.57 $ 0.44     Basic weighted average common shares   59,324   58,784     Diluted earnings per share $ 0.56 $ 0.44     Diluted weighted average common shares   60,601   59,172       WORLD FUEL SERVICES CORPORATION CONSOLIDATED BALANCE SHEETS (UNAUDITED - IN THOUSANDS)     As of March 31, December 31, 2010 2009   Assets: Current assets: Cash and cash equivalents $ 303,080 $ 298,843 Short-term investments 8,100 8,100 Accounts receivable, net 1,035,425 951,398 Inventories 121,923 126,793 Short-term derivative assets, net 17,144 12,257 Prepaid expenses and other current assets   73,849   66,587   Total current assets 1,559,521 1,463,978   Property and equipment, net 46,822 38,777   Other assets   240,549   238,473   Total assets $ 1,846,892 $ 1,741,228   Liabilities and equity: Liabilities: Current liabilities: Short-term debt $ 6,893 $ 6,684 Accounts payable 884,960 796,978 Short-term derivative liabilities, net 15,003 10,616 Customer deposits 47,311 63,967 Accrued expenses and other current liabilities   70,084   69,497   Total current liabilities 1,024,251 947,742   Long-term debt 9,647 9,925 Other long-term liabilities   46,739   50,312 Total liabilities   1,080,637   1,007,979   Equity: World Fuel shareholders' equity 765,890 733,021 Noncontrolling interest equity   365   228 Total equity   766,255   733,249   Total liabilities and equity $ 1,846,892 $ 1,741,228     WORLD FUEL SERVICES CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED - IN THOUSANDS)     For the Three Months ended March 31, 2010 2009   Cash flows from operating activities: Net income including noncontrolling interest $ 33,840   $ 25,819   Adjustments to reconcile net income including noncontrolling interest to net cash (used in) provided by operating activities: Depreciation and amortization 4,419 3,838 Provision for bad debt 369 458 Deferred income tax benefit

(1,455

) (2,473 ) Share-based payment award compensation costs 1,306 1,791

Foreign currency losses, net

360

 

213 Other (90 ) 236 Changes in assets and liabilities, net of acquisitions  

(22,183

)   59,724   Total adjustments   (17,274 )   63,787   Net cash provided by operating activities   16,566     89,606     Cash flows used in investing activities, net   (9,206 )   (1,303 )   Cash flows used in financing activities, net   (2,097 )   (16,288 )   Effect of exchange rate changes on cash and cash equivalents   (1,026 )   (39 )   Net increase in cash and cash equivalents 4,237 71,976   Cash and cash equivalents, at beginning of period   298,843     314,352     Cash and cash equivalents, at end of period $ 303,080   $ 386,328       WORLD FUEL SERVICES CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA)     For the Three Months Ended March 31, 2010 2009   Non-GAAP financial measures and reconciliation:   GAAP net income attributable to World Fuel $ 33,703 $ 25,830 Share-based compensation expense, net of taxes 1,003 1,201 Intangible asset amortization expense, net of taxes   1,494   1,265 Non-GAAP net income attributable to World Fuel $ 36,200 $ 28,296   GAAP diluted earnings per share $ 0.56 $ 0.44 Share-based compensation expense, net of taxes 0.02 0.02 Intangible asset amortization expense, net of taxes   0.02   0.02 Non-GAAP diluted earnings per share $ 0.60 $ 0.48     WORLD FUEL SERVICES CORPORATION BUSINESS SEGMENT INFORMATION (UNAUDITED - IN THOUSANDS)     For the Three Months ended March 31, 2010 2009 Revenue: Marine segment $ 2,098,612 $ 1,102,862 Aviation segment 1,459,724 710,415 Land segment   359,685     200,666   $ 3,918,021   $ 2,013,943     Gross profit: Marine segment $ 39,389 $ 47,092 Aviation segment 48,375 32,021 Land segment   11,054     8,222   $ 98,818   $ 87,335     Income from operations: Marine segment $ 20,007 $ 29,342 Aviation segment 26,694 11,672 Land segment   2,348     1,089   49,049 42,103 Corporate overhead   (6,924 )   (8,998 ) $ 42,125   $ 33,105