World Fuel Services Corporation (NYSE: INT), a leading fuel
logistics company, principally engaged in the marketing, sale and
distribution of aviation, marine and land fuel products and related
services, today reported second quarter net income of $50.2 million
or $0.70 diluted earnings per common share compared to $37.0
million or $0.61 diluted earnings per common share in the second
quarter of 2010. Non-GAAP net income for the second quarter, which
excludes share-based compensation and amortization of acquired
intangible assets, was $57.7 million or $0.81 non-GAAP diluted
earnings per common share compared to $40.2 million or $0.66
non-GAAP diluted earnings per common share in the second quarter of
2010.
The company's aviation segment generated gross profit of $82.0
million in the second quarter of 2011, an increase of $11.9 million
or 17% sequentially, and an increase of $29.1 million or 55%
year-over-year. The marine segment generated gross profit of $50.7
million, an increase of $10.5 million or 26% sequentially, and an
increase of $7.5 million or 17% from last year's results. The
company's land segment posted gross profit of $32.4 million in the
second quarter, an increase of $6.0 million or 23% sequentially,
and $20.9 million or 182% year-over-year.
"This quarter’s results demonstrate the durability of our
business model in a wide range of operating environments and the
importance of having a clear business strategy," said Paul H.
Stebbins, chairman and chief executive officer of World Fuel
Services Corporation. "Our investments in people, process and
technology, as well as our continued focus on risk management and
execution have served us well and we are excited about the
prospects for further expansion."
"The record earnings posted this quarter are a testament to our
ability to develop the business through both organic and strategic
investment initiatives," stated Michael J. Kasbar, president and
chief operating officer.
The company also announced today that it has obtained a new $250
million five-year term loan, amended and restated its existing $800
million credit facility and extended the maturity date of the
facility to 2016. Combined, these facilities represent $1.05
billion of committed financing.
"Given continued global economic uncertainty, we are very
pleased with the issuance of a $250 million five-year term loan
which carries an initial rate of approximately 2%, further
enhancing our liquidity profile,” stated Ira M. Birns, executive
vice president and chief financial officer. “We also amended and
restated our credit facility which reduces funding costs, enhances
flexibility and extends the maturity date of the facility to July
2016.”
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 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, 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
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 6,000 locations in 200 countries and territories, including
airports, seaports, tanker truck loading terminals and other
customer storage locations. With 48 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 aviation, marine and land
fuel.
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 (FBO’s), 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. 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 Six Months ended June 30, June 30, 2011 2010
2011 2010 Revenue $
8,708,709
$
4,397,275
$
15,788,115
$
8,315,296
Cost of revenue
8,543,607
4,289,706 15,486,245
8,108,909 Gross profit
165,102 107,569
301,870 206,387
Operating expenses: Compensation and employee
benefits 54,877 38,900 101,946 73,701 Provision for bad debt 3,531
1,696 4,327 2,065 General and administrative
40,591 21,909
73,969 43,432
Total operating expenses
98,999
62,505 180,242
119,198 Income from operations
66,103 45,064 121,628 87,189 Non-operating expenses, net
(4,381 ) (248
) (7,834 )
(852 ) Income before income taxes
61,722 44,816 113,794 86,337 Provision for income taxes
11,049 7,765
21,464 15,446
Net income including noncontrolling interest 50,673 37,051 92,330
70,891 Net income attributable to noncontrolling interest
470 74
1,018 211 Net
income attributable to World Fuel
$
50,203 $ 36,977
$ 91,312 $
70,680 Basic earnings per share
$ 0.71 $
0.62 $ 1.30
$ 1.19 Basic weighted
average common shares
70,856
59,418 70,400
59,371 Diluted earnings per share
$ 0.70 $
0.61 $ 1.28
$ 1.17 Diluted weighted
average common shares
71,558
60,685 71,299
60,646 WORLD FUEL SERVICES
CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(UNAUDITED - IN THOUSANDS) As of June 30, December
31, 2011 2010 Assets: Current assets: Cash and cash
equivalents $ 149,735 $ 272,893 Accounts receivable, net 1,982,962
1,386,700 Inventories 429,206 211,526 Prepaid expenses and other
current assets
232,029
196,748 Total current assets 2,793,932
2,067,867 Property and equipment, net 84,651 64,106
Goodwill, identifiable intangible and non-current other assets
483,475 434,477
Total assets
$ 3,362,058
$ 2,566,450 Liabilities and
equity: Liabilities: Current liabilities: Short-term debt $ 15,787
$ 17,076 Accounts payable 1,646,847 1,131,228 Accrued expenses and
other current liabilities
218,121
210,180 Total current liabilities
1,880,755 1,358,484 Long-term debt 167,020 24,566 Other
long-term liabilities
59,986
56,836 Total liabilities
2,107,761 1,439,886
Equity: World Fuel shareholders' equity 1,243,267 1,127,208
Noncontrolling interest equity (deficit)
11,030
(644 ) Total equity
1,254,297 1,126,564
Total liabilities and equity
$ 3,362,058
$ 2,566,450 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, 2011 2010 2011 2010 Cash flows from
operating activities: Net income including noncontrolling interest
$ 50,673 $
37,051 $ 92,330
$ 70,891 Adjustments to
reconcile net income including noncontrolling interest to net cash
provided by (used in) operating activities: Depreciation and
amortization 10,573 4,205 18,740 8,624 Provision for bad debt 3,531
1,696 4,327 2,065 Share-based payment award compensation costs
2,793 2,411 5,658 3,717 Other 7,295 (1,655 ) 7,046 (2,840 ) Changes
in assets and liabilities, net of acquisitions
(68,078 ) (36,502
) (265,800 )
(58,685 ) Total adjustments
(43,886 ) (29,845
) (230,029 )
(47,119 ) Net cash provided by (used in)
operating activities
6,787
7,206 (137,699
) 23,772 Cash flows
from investing activities: Acquisition of businesses, net of cash
acquired (39,013 ) - (106,013 ) (8,315 )
Capital expenditures
(4,766 )
(3,262 ) (7,394
) (4,153 ) Net cash
used in investing activities
(43,779
) (3,262 )
(113,407 ) (12,468
) Cash flows from financing activities:
Borrowings under revolving credit facility, net 98,000 - 138,000 -
Other
(5,120 )
(9,314 ) (11,682
) (11,411 ) Net cash
provided by (used in) financing activities
92,880 (9,314
) 126,318
(11,411 ) Effect of exchange rate
changes on cash and cash equivalents
473
(324 ) 1,630
(1,350 ) Net
increase (decrease) in cash and cash equivalents 56,361 (5,694 )
(123,158 ) (1,457 ) Cash and cash equivalents, at beginning
of period
93,374
303,080 272,893
298,843 Cash and cash
equivalents, at end of period
$ 149,735
$ 297,386 $
149,735 $ 297,386
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, 2011 2010 2011 2010
GAAP net income attributable to World Fuel $ 50,203 $ 36,977 $
91,312 $ 70,680 Share-based compensation expense, net of taxes
1,879 1,741 3,888 2,744 Intangible asset amortization expense, net
of taxes 5,571 1,447 9,233 2,941
Non-GAAP net income attributable to World Fuel $ 57,653 $ 40,165 $
104,433 $ 76,365 GAAP diluted earnings per share $ 0.70 $
0.61 $ 1.28 $ 1.17 Share-based compensation expense, net of taxes
0.03 0.03 0.05 0.05 Intangible asset amortization expense, net of
taxes 0.08 0.02 0.13 0.05 Non-GAAP
diluted earnings per share $ 0.81 $ 0.66 $ 1.46 $ 1.27
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, 2011 2010 2011 2010 Revenue:
Aviation segment $ 3,364,829 $ 1,691,042 $ 6,011,421 $ 3,150,766
Marine segment 3,532,983 2,276,651 6,532,402 4,375,263 Land segment
1,810,897 429,582
3,244,292 789,267 $
8,708,709 $ 4,397,275
$ 15,788,115 $
8,315,296 Gross profit: Aviation segment $
82,027 $ 52,887 $ 152,155 $ 101,262 Marine segment 50,674 43,204
90,889 82,593 Land segment
32,401
11,478 58,826
22,532 $ 165,102
$ 107,569 $
301,870 $ 206,387
Income from operations: Aviation segment $ 37,624 $ 28,701 $ 75,794
$ 55,395 Marine segment 25,763 23,972 43,118 43,980 Land segment
14,026 1,780
24,689 4,128 77,413 54,453 143,601
103,503 Corporate overhead
11,310
9,389 21,973
16,314 $ 66,103
$ 45,064 $
121,628 $ 87,189
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