World Fuel Services Corporation Reports First Quarter 2017 Earnings
Generates
Completes Acquisition of ExxonMobil On-Airport Fueling Operations
“In the first quarter, we witnessed continued strength in the aviation
segment and closed the final phases of the
The company’s aviation segment generated gross profit of
“During the first quarter, we generated
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, including
Non-GAAP and adjusted net income and diluted earnings per share (“EPS”)
for the three months ended
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 and adjusted net
income and Non-GAAP and adjusted diluted earnings per common share may
not be comparable to the presentation of such metrics by other
companies. Non-GAAP and adjusted diluted earnings per common share is
computed by dividing non-GAAP net income and adjusted net income,
respectively, attributable to
Information Relating to Forward-Looking Statements
This release includes forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including
statements regarding our expectations about executing on our strategy,
reducing costs and gaining identified efficiencies, as well as our
expectations about improving our level of profitability. These
forward-looking statements are qualified in their entirety by cautionary
statements and risk factor disclosures contained in the Company’s
About
Headquartered in
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 (FBOs), as well as
-- Some amounts in this press release may not add due to rounding. All percentages have been calculated using unrounded amounts --
|
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited - In millions, except per share data) |
||||||||
| As of | ||||||||
| March 31, | December 31, | |||||||
| 2017 | 2016 | |||||||
| Assets: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 619.3 | $ | 698.6 | ||||
| Accounts receivable, net | 2,209.1 | 2,344.0 | ||||||
| Inventories | 460.0 | 458.0 | ||||||
| Prepaid expenses | 46.4 | 46.5 | ||||||
| Short-term derivative assets, net | 50.0 | 58.9 | ||||||
| Other current assets | 204.4 | 230.6 | ||||||
| Total current assets | 3,589.2 | 3,836.6 | ||||||
| Property and equipment, net | 317.3 | 311.2 | ||||||
| Goodwill | 883.4 | 835.8 | ||||||
| Identifiable intangible and other non-current assets | 473.6 | 429.1 | ||||||
| Total assets | $ | 5,263.6 | $ | 5,412.6 | ||||
| Liabilities: | ||||||||
| Current liabilities: | ||||||||
| Short-term debt | $ | 17.1 | $ | 15.4 | ||||
| Accounts payable | 1,729.5 | 1,770.4 | ||||||
| Customer deposits | 98.5 | 90.8 | ||||||
| Accrued expenses and other current liabilities | 249.6 | 306.0 | ||||||
| Total current liabilities | 2,094.7 | 2,182.7 | ||||||
| Long-term debt | 1,065.8 | 1,170.8 | ||||||
| Non-current income tax liabilities, net | 88.5 | 84.6 | ||||||
| Other long-term liabilities | 39.0 | 34.5 | ||||||
| Total liabilities | 3,288.0 | 3,472.6 | ||||||
| Commitments and contingencies | ||||||||
| Equity: | ||||||||
| World Fuel shareholders' equity: | ||||||||
| Preferred stock, $1.00 par value; 0.1 shares authorized, none issued | — | — | ||||||
| Common stock, $0.01 par value; 100.0 shares authorized, 69.6 and 69.9 issued and outstanding as of March 31, 2017 and December 31, 2016, respectively | 0.7 | 0.7 | ||||||
| Capital in excess of par value | 391.8 | 399.9 | ||||||
| Retained earnings | 1,706.5 | 1,679.3 | ||||||
| Accumulated other comprehensive loss | (138.1 | ) | (154.8 | ) | ||||
| Total World Fuel shareholders' equity | 1,960.8 | 1,925.0 | ||||||
| Noncontrolling interest equity | 14.8 | 15.0 | ||||||
| Total equity | 1,975.6 | 1,940.0 | ||||||
| Total liabilities and equity | $ | 5,263.6 | $ | 5,412.6 | ||||
|
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited – In millions, except per share data) |
||||||||
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2017 | 2016 | |||||||
| Revenue | $ | 8,194.3 | $ | 5,190.8 | ||||
| Cost of revenue | 7,962.9 | 4,969.3 | ||||||
| Gross profit | 231.4 | 221.5 | ||||||
| Operating expenses: | ||||||||
| Compensation and employee benefits | 104.5 | 95.9 | ||||||
| Provision for bad debt | 2.5 | 1.5 | ||||||
| General and administrative | 74.1 | 63.1 | ||||||
| 181.1 | 160.5 | |||||||
| Income from operations | 50.3 | 61.0 | ||||||
| Non-operating expenses, net: | ||||||||
| Interest expense and other financing costs, net | (12.7 | ) | (7.6 | ) | ||||
| Other (expense) income, net | (1.6 | ) | 1.3 | |||||
| (14.3 | ) | (6.3 | ) | |||||
| Income before income taxes | 36.1 | 54.8 | ||||||
| Provision for income taxes | 5.0 | 3.1 | ||||||
| Net income including noncontrolling interest | 31.1 | 51.6 | ||||||
| Net loss attributable to noncontrolling interest | (0.3 | ) | (0.1 | ) | ||||
| Net income attributable to World Fuel | $ | 31.3 | $ | 51.8 | ||||
| Basic earnings per common share | $ | 0.46 | $ | 0.74 | ||||
| Basic weighted average common shares | 68.7 | 69.5 | ||||||
| Diluted earnings per common share | $ | 0.45 | $ | 0.74 | ||||
| Diluted weighted average common shares | 69.2 | 70.0 | ||||||
| Comprehensive income: | ||||||||
| Net income including noncontrolling interest | $ | 31.1 | $ | 51.6 | ||||
| Other comprehensive income (loss): | ||||||||
| Foreign currency translation adjustments | 6.4 | 1.3 | ||||||
| Cash Flow hedges, net of income tax benefit of $6.5 for the three months ended March 31, 2017 | 10.5 | (0.2 | ) | |||||
| Other comprehensive income | 16.9 | 1.0 | ||||||
| Comprehensive (loss) income including noncontrolling interest | 48.0 | 52.7 | ||||||
| Comprehensive (loss) income attributable to noncontrolling interest | (0.1 | ) | 1.5 | |||||
| Comprehensive income attributable to World Fuel | $ | 48.0 | $ | 51.2 | ||||
|
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - In millions) |
||||||||
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2017 | 2016 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income including noncontrolling interest | $ | 31.1 | $ | 51.6 | ||||
| Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 22.6 | 18.4 | ||||||
| Provision for bad debt | 2.5 | 1.5 | ||||||
| Share-based payment award compensation costs | 4.1 | 4.1 | ||||||
| Deferred income tax (benefit) provision | (6.3 | ) | 1.8 | |||||
| Extinguishment of liabilities, net | (1.0 | ) | (1.8 | ) | ||||
| Foreign currency losses (gains), net | (3.0 | ) | 6.2 | |||||
| Other | 0.1 | 1.4 | ||||||
| Changes in assets and liabilities, net of acquisitions: | ||||||||
| Accounts receivable, net | 129.5 | 142.9 | ||||||
| Inventories | 0.7 | 26.1 | ||||||
| Prepaid expenses | (0.2 | ) | 11.7 | |||||
| Short-term derivative assets, net | 10.1 | 85.1 | ||||||
| Other current assets | 21.0 | (12.8 | ) | |||||
| Cash collateral with financial counterparties | 15.8 | 54.0 | ||||||
| Other non-current assets | 4.1 | 7.1 | ||||||
| Accounts payable | (44.7 | ) | (191.2 | ) | ||||
| Customer deposits | 7.3 | (23.6 | ) | |||||
| Accrued expenses and other current liabilities | (54.6 | ) | (37.3 | ) | ||||
| Non-current income tax, net and other long-term liabilities | (2.1 | ) | (6.7 | ) | ||||
| Total adjustments | 105.9 | 86.9 | ||||||
| Net cash provided by operating activities | 137.0 | 138.6 | ||||||
| Cash flows from investing activities: | ||||||||
| Acquisition of businesses, net of cash acquired and other investments | (88.1 | ) | (45.3 | ) | ||||
| Capital expenditures | (10.0 | ) | (14.1 | ) | ||||
| Other investing activities, net | 0.2 | 6.9 | ||||||
| Net cash used in investing activities | (97.9 | ) | (52.6 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Borrowings of debt | 818.8 | 689.6 | ||||||
| Repayments of debt | (922.5 | ) | (664.6 | ) | ||||
| Dividends paid on common stock | (4.1 | ) | (4.2 | ) | ||||
| Purchases of common stock | (11.1 | ) | — | |||||
| Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards | (1.2 | ) | (0.9 | ) | ||||
| Other financing activities, net | (0.1 | ) | (0.2 | ) | ||||
| Net cash (used in) provided by financing activities | (120.2 | ) | 19.6 | |||||
| Effect of exchange rate changes on cash and cash equivalents | 1.8 | 1.5 | ||||||
| Net (decrease) increase in cash and cash equivalents | (79.3 | ) | 107.2 | |||||
| Cash and cash equivalents, as of beginning of period | 698.6 | 582.5 | ||||||
| Cash and cash equivalents, as of end of period | $ | 619.3 | $ | 689.7 | ||||
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WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited - In millions, except per share data) |
|||||||
| For the Three Months Ended | |||||||
| March 31, | |||||||
| Non-GAAP financial measures and reconciliation: | 2017 | 2016 | |||||
| GAAP net income attributable to World Fuel | $ | 31.3 | $ | 51.8 | |||
| Acquisition related charges, net of income taxes (1) | 2.1 | 1.2 | |||||
| Severance and other restructuring-related costs, net of income taxes (2) | 1.2 | — | |||||
| Adjusted net income attributable to World Fuel | $ | 34.6 | $ | 53.0 | |||
| Share-based compensation expense, net of income taxes (3) | 2.7 | 2.8 | |||||
| Intangible asset amortization expense, net of income taxes (4) | 7.2 | 6.7 | |||||
| Non-GAAP net income attributable to World Fuel | $ | 44.5 | $ | 62.5 | |||
| GAAP diluted earnings per common share | $ | 0.45 | $ | 0.74 | |||
| Acquisition related charges, net of income taxes (1) | 0.03 | 0.02 | |||||
| Severance and other restructuring-related costs, net of income taxes (2) | 0.02 | — | |||||
| Adjusted diluted earnings per common share | $ | 0.50 | $ | 0.76 | |||
| Share-based compensation expense, net of income taxes (3) | 0.04 | 0.04 | |||||
| Intangible asset amortization expense, net of income taxes (4) | 0.10 | 0.10 | |||||
| Non-GAAP diluted earnings per common share | $ | 0.64 | $ | 0.90 | |||
| (1) | The pre-tax amount of acquisition related charges was $2.9 million and $1.5 million for the three months ended March 31, 2017 and 2016, respectively. | ||||||
| (2) | The pre-tax amount of severance and other restructuring-related costs was $1.9 million for the three months ended March 31, 2017 | ||||||
| (3) | The pre-tax amount of share-based compensation expense was $4.1 million and $4.1 million for the three months ended March 31, 2017 and 2016, respectively. | ||||||
| (4) | The pre-tax amount of intangible asset amortization expense attributable to World Fuel Services was $9.7 million and $8.4 million for the three months ended March 31, 2017 and 2016, respectively. |
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WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES BUSINESS SEGMENTS INFORMATION (Unaudited - In millions) |
||||||||
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| Revenue: | 2017 | 2016 | ||||||
| Aviation segment | $ | 3,317.4 | $ | 2,219.4 | ||||
| Land segment | 2,783.4 | 1,695.0 | ||||||
| Marine segment | 2,093.5 | 1,276.5 | ||||||
| $ | 8,194.3 | $ | 5,190.8 | |||||
| Gross profit: | ||||||||
| Aviation segment | $ | 100.0 | $ | 88.7 | ||||
| Land segment | 97.8 | 93.6 | ||||||
| Marine segment | 33.6 | 39.2 | ||||||
| $ | 231.4 | $ | 221.5 | |||||
| Income from operations: | ||||||||
| Aviation segment | $ | 40.4 | $ | 34.0 | ||||
| Land segment | 21.4 | 34.0 | ||||||
| Marine segment | 8.3 | 11.4 | ||||||
| 70.1 | 79.4 | |||||||
| Corporate overhead - unallocated | (19.8 | ) | (18.4 | ) | ||||
| $ | 50.3 | $ | 61.0 | |||||
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SALES VOLUME SUPPLEMENTAL INFORMATION (Unaudited - In millions) |
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| For the Three Months Ended | ||||
| March 31, | ||||
| Volume (Gallons): | 2017 | 2016 | ||
| Aviation Segment | 1,831.0 | 1,626.4 | ||
| Land Segment | 1,497.1 | 1,213.1 | ||
| Marine Segment (1) | 1,803.6 | 2,022.9 | ||
| Consolidated Total | 5,131.7 | 4,862.4 | ||
| (1) | Converted from metric tons to gallons at a rate of 264 gallons per metric ton. Marine segment metric tons was 6.8 for the three months ended March 31, 2017. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170427006681/en/
Source:
World Fuel Services Corporation
Ira M Birns, 305-428-8000
Executive
Vice President & Chief Financial Officer
or
Glenn Klevitz,
305-428-8000
Vice President, Assistant Treasurer
