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 second quarter net income of
$37.0 million or $0.61 diluted earnings per share compared to $27.7
million or $0.46 diluted earnings per share in the second quarter
of 2009. Non-GAAP net income for the second quarter, which excludes
share-based compensation and amortization of acquired intangible
assets, was $40.2 million or $0.66 non-GAAP diluted earnings per
share compared to $30.7 million or $0.51 non-GAAP diluted earnings
per share in the second quarter of 2009. Our second quarter GAAP
and non-GAAP results were favorably affected by a gain of $1.9
million relating to a commercial paper investment for which a $1.9
million impairment charge was taken in the third quarter of 2007.
The after-tax effect of the gain was $1.4 million, or $0.02 per
share.
The company’s aviation segment generated record gross profit of
$52.9 million in the second quarter of 2010, an increase of $4.5
million or 9% sequentially, and an increase of $13.1 million or 33%
year over year. The marine segment generated gross profit of $43.2
million, increases of $3.8 million or 10% sequentially, and $2.9
million or 7% from last year’s results. The company’s land segment
posted gross profit of $11.5 million in the second quarter, an
increase of 4% sequentially, and flat year over year.
“We posted strong results in the second quarter with record
aviation volume as well as sequential and year over year volume
increases in both the marine and land segments,” said Paul H.
Stebbins, chairman and chief executive officer of World Fuel
Services Corporation. “We continue to focus on driving profitable
growth while maintaining our risk management discipline, which
positions us well as end markets begin to recover.”
“We saw improvements in the marine segment, which achieved the
highest level of quarterly gross profit since the first quarter of
2009,” stated Michael J. Kasbar, president and chief operating
officer. “Furthermore, as evidenced by the recent Lakeside Oil
acquisition, we remain committed to growth, both organically and
through strategic acquisitions.”
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 AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED - IN THOUSANDS,
EXCEPT PER SHARE DATA) For the Three
Months ended For the Six Months ended June 30, June 30, 2010 2009
2010 2009 Revenue $ 4,397,275 $ 2,533,340 $ 8,315,296
$ 4,547,283 Cost of revenue
4,289,706
2,441,772 8,108,909
4,368,380 Gross profit
107,569 91,568
206,387 178,903 Operating
expenses: Compensation and employee benefits 38,900 35,079 73,701
68,872 Provision for bad debt 1,696 464 2,065 922 General and
administrative
21,909
19,898 43,432
39,877 Total operating expenses
62,505 55,441
119,198 109,671 Income from
operations 45,064 36,127 87,189 69,232 Non-operating expenses, net
248 561
852 1,917 Income before
income taxes 44,816 35,566 86,337 67,315 Provision for income taxes
7,765 7,623
15,446 13,553 Net income
including noncontrolling interest 37,051 27,943 70,891 53,762 Less:
net income attributable to noncontrolling interest
74 201 211
190 Net income attributable to World
Fuel
$ 36,977 $
27,742 $ 70,680
$ 53,572 Basic earnings per share
$ 0.62 $ 0.47
$ 1.19 $ 0.91
Basic weighted average common shares
59,418 58,864
59,371 58,586 Diluted
earnings per share
$ 0.61 $
0.46 $ 1.17 $
0.91 Diluted weighted average common shares
60,685 59,846
60,646 59,132 WORLD FUEL
SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS (UNAUDITED - IN THOUSANDS) As of June 30,
December 31, 2010 2009 Assets: Current assets: Cash and cash
equivalents $ 297,386 $ 298,843 Short-term investments 10,000 8,100
Accounts receivable, net 1,115,878 951,398 Inventories 140,693
126,793 Short-term derivative assets, net 10,171 11,853 Prepaid
expenses and other current assets
81,082
66,991 Total current assets 1,655,210 1,463,978
Property and equipment, net 47,840 38,777 Goodwill,
identifiable intangible and other assets
240,393 238,473 Total
assets
$ 1,943,443 $
1,741,228 Liabilities and equity: Liabilities:
Current liabilities: Short-term debt $ 6,259 $ 6,684 Accounts
payable 947,214 796,978 Short-term derivative liabilities, net
10,970 9,133 Customer deposits 52,582 63,967 Accrued expenses and
other current liabilities
71,106
70,980 Total current liabilities 1,088,131
947,742 Long-term debt 4,728 9,925 Other long-term
liabilities
49,607 50,312
Total liabilities
1,142,466
1,007,979 Equity: World Fuel shareholders'
equity 800,538 733,021 Noncontrolling interest equity
439 228 Total equity
800,977 733,249 Total
liabilities and equity
$ 1,943,443
$ 1,741,228 WORLD FUEL SERVICES
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED - IN THOUSANDS)
For the Three Months ended For the Six Months ended June 30, June
30, 2010 2009 2010 2009 Cash flows from operating
activities: Net income including noncontrolling interest
$ 37,051 $
27,943 $ 70,891
$ 53,762
Adjustments to reconcile net
income including noncontrolling interest to net cash provided by
operating activities:
Depreciation and amortization 4,205 4,302 8,624 8,140 Provision for
bad debt 1,696 464 2,065 922 Gain on short-term investments (1,900
) - (1,900 ) - Deferred income tax provision (benefit) 183 5,657
(1,272 ) 3,184 Share-based payment award compensation costs 2,411
2,094 3,717 3,885 Foreign currency losses (gains), net 68 (405 )
428 (192 ) Other (6 ) 289 (96 ) 525 Changes in assets and
liabilities, net of acquisitions
(36,502
) (8,965 )
(58,685 ) 50,759
Total adjustments
(29,845 )
3,436 (47,119
) 67,223 Net cash provided
by operating activities
7,206
31,379 23,772
120,985 Cash flows used in investing
activities, net
(3,262 )
(59,169 ) (12,468
) (60,472 )
Cash flows used in financing activities, net
(9,314 ) (6,595
) (11,411 )
(22,883 )
Effect of exchange rate changes on
cash and cash equivalents
(324 ) 868
(1,350 )
829 Net (decrease) increase in cash and
cash equivalents (5,694 ) (33,517 ) (1,457 ) 38,459 Cash and
cash equivalents, beginning of period
303,080
386,328
298,843 314,352
Cash and cash equivalents, end of period
$
297,386 $ 352,811
$ 297,386 $
352,811 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 Six Months ended June 30, June 30, 2010 2009 2010
2009 Non-GAAP financial measures and reconciliation:
GAAP net income attributable to World Fuel $ 36,977 $ 27,742 $
70,680 $ 53,572 Share-based compensation expense, net of taxes
1,741 1,325 2,744 2,526 Intangible asset amortization expense, net
of taxes 1,447 1,592 2,941 2,857
Non-GAAP net income attributable to World Fuel $ 40,165 $ 30,659 $
76,365 $ 58,955 GAAP diluted earnings per share $ 0.61 $
0.46 $ 1.17 $ 0.91 Share-based compensation expense, net of taxes
0.03 0.02 0.05 0.04 Intangible asset amortization expense, net of
taxes 0.02 0.03 0.05 0.05 Non-GAAP
diluted earnings per share $ 0.66 $ 0.51 $ 1.27 $ 1.00
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES BUSINESS
SEGMENT INFORMATION (UNAUDITED - IN THOUSANDS)
For the Three Months ended For the Six Months ended June 30,
June 30, 2010 2009 2010 2009 Revenue: Marine segment $ 2,276,651 $
1,381,496 $ 4,375,263 $ 2,484,358 Aviation segment 1,691,042
832,166 3,150,766 1,542,581 Land segment
429,582 319,678
789,267 520,344
$ 4,397,275 $
2,533,340 $ 8,315,296
$ 4,547,283 Gross
profit: Marine segment $ 43,204 $ 40,347 $ 82,593 $ 87,439 Aviation
segment 52,887 39,744 101,262 71,765 Land segment
11,478 11,477
22,532 19,699
$ 107,569 $
91,568 $ 206,387
$ 178,903 Income
from operations: Marine segment $ 23,972 $ 22,639 $ 43,980 $ 51,981
Aviation segment 28,701 17,727 55,395 29,399 Land segment
1,780 3,882
4,128 4,971 54,453
44,248 103,503 86,351 Corporate overhead
(9,389
) (8,121 )
(16,314 ) (17,119
) $ 45,064
$ 36,127 $
87,189 $ 69,232
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