UTi Worldwide Reports Fiscal 2015 Third Quarter Results

Reaffirms Adjusted EBITDA Target of $190-210 Million for Fiscal 2016


LONG BEACH, Calif., Dec. 9, 2014 (GLOBE NEWSWIRE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported financial results for its fiscal 2015 third quarter ended October 31, 2014.

Fiscal Third Quarter 2015 vs. 2014 Results:

  • Revenues were $1,078.3 million, a decrease of 6.6 percent from $1,154.4 million.
  • Net revenues (revenues minus purchased transportation costs) were $381.0 million, a decrease of 3.1 percent from $393.5 million.
  • On a constant currency basis, revenues decreased 4.3 percent and net revenues increased 0.1 percent versus the comparable prior year period.
  • Net loss attributable to UTi Worldwide Inc. was $34.0 million in the fiscal 2015 third quarter. Net loss attributable to common shareholders after dividends on preferred stock was $0.35 per diluted common share.
  • Net loss attributable to UTi Worldwide Inc. in the fiscal 2014 third quarter was $9.1 million, or $0.09 per diluted common share.
  • The company recorded severance and other costs of $23.7 million compared to $13.2 million. The $23.7 million includes a $19.6 million receivable impairment resulting from a customer bankruptcy. In addition, UTi recorded additional tax expense exceeding its normalized tax rate of $7.0 million, or $0.06 per diluted common share.
  • Non-GAAP net loss attributable to UTi Worldwide Inc. was $4.8 million. Non-GAAP net loss attributable to common shareholders after preferred stock dividends was $0.08 per diluted common share.
  • Earnings before interest, taxes, depreciation and amortization, as adjusted for severance and other costs (adjusted EBITDA), totaled $23.1 million (which includes $11.3 million in temporary costs) compared to $39.8 million.
  • All references to adjusted items, free cash flow (defined as cash flow from operations less net capital expenditures), constant currency items, EBITDA and adjusted EBITDA in this release refer to non-GAAP results. A reconciliation of these non-GAAP results to the most directly comparable financial measures calculated in accordance with GAAP is provided in the supplemental financial information attached to this release.

Edward G. Feitzinger, chief executive officer, said, "Earlier this year, we were working through service issues and billing challenges associated with the rollout of our freight forwarding system in the United States. Since then, our service has improved dramatically. These past issues adversely impacted freight forwarding growth and free cash flow for several quarters. The third quarter marked a turning point in a number of areas. Airfreight kilos improved on a year over year basis for the month of October and adjusted EBITDA improved each month during the quarter. Free cash flow also turned positive in a quarter where we have historically had negative cash flow. In addition, by the end of Q3 we had completed approximately half of our previously announced incremental $45 million annualized cost savings target for fiscal year 2015. These actions, together with growth initiatives and other improvements, give us confidence in our previously-stated fiscal 2016 adjusted EBITDA target of $190 million to $210 million."

"In the third quarter, adjusted EBITDA decreased approximately $17 million as compared to the same period last year, primarily due to lower freight forwarding revenues and $11 million in temporary costs. Contract logistics and distribution adjusted EBITDA was flat on a year over year basis, but the results were negatively impacted by new business start-ups and the timing of project related work. Adjusted EBITDA in freight forwarding declined primarily due to lower air freight volumes and costs related to transformation."

Operating expenses less purchased transportation costs were $403.2 million in the third quarter of fiscal 2015. Excluding severance and other costs, adjusted operating expenses less purchased transportation costs were $379.6 million, compared to $373.1 million in the same period last year.

The company recorded a tax provision of $2.3 million in the fiscal 2015 third quarter on a pretax loss of $33.0 million, due to increases in valuation allowances and the mix of taxable income across the company's tax jurisdictions.

Free cash flow was positive $8.5 million in the fiscal 2015 third quarter, which represents a $48 million improvement as compared to the same quarter last year. Richard G. Rodick, chief financial officer, said, "We improved our free cash flow significantly in the fiscal 2015 third quarter. As a result, the fiscal 2015 third quarter was our first positive free cash flow period in seven quarters, and better than any third quarter since fiscal 2012. We continue to believe that positive free cash flow for the full fiscal year is achievable, and we have additional incremental opportunity in fiscal 2016."

The company recorded a $19.6 million receivable impairment in the fiscal 2015 third quarter relating to a customer bankruptcy. The total amount owed to the company is $24.9 million. The company filed an insurance claim for approximately $16 million under the terms of a policy related to a portion of the impaired amount. The company's insurance provider has not yet accepted or rejected the claim. The company believes that a substantial portion of the claim will eventually be paid, but as required under GAAP, the company has not recognized any benefit from its potential insurance recovery.

Investor Conference Call:

UTi management will host an investor conference call today, December 9, 2014, at 8:00 A.M. PST (11:00 A.M. EST) to review the company's financial results for the fiscal 2015 third quarter. Investment professionals are invited to participate in the live call by dialing 888-378-0320 (domestic) or 719-457-2689 (international) using conference ID 8516326. The call will be open to all interested investors through a live, listen-only audio Internet broadcast at www.go2uti.com. The slides that will be referenced during the call will be available on the company's website at www.go2uti.com (click on "Investor Relations" and then click on "Webcasts & Presentations"). The slides will contain disclosures of certain non-GAAP financial measures, which will be identified in the slides. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures will be included in the slides. For those who are not available to listen to the live broadcast, the call will be archived for one year on the company's website. A telephonic playback of the conference call also will be available from approximately 11:00 A.M. PST, today, through December 12, 2014, by calling 888-203-1112 (domestic) or 719-457-0820 (international) and using replay passcode 8516326.

About UTi Worldwide:

UTi Worldwide Inc. is an international, non-asset-based supply chain services and solutions company providing air and ocean freight forwarding, contract logistics, customs brokerage, distribution, inbound logistics, truckload brokerage and other supply chain management services. The company serves a large and diverse base of global and local companies, including clients operating in industries with unique supply chain requirements such as the pharmaceutical, retail, apparel, chemical, automotive and technology industries. The company seeks to use its global network, proprietary information technology systems, relationships with transportation providers, and expertise in outsourced logistics services to deliver competitive advantage to each of its clients' supply chains.

Use of Non-GAAP Financial Information:

This press release includes "non-GAAP financial measures" within the meaning of the Securities and Exchange Commission rules. UTi believes that meaningful analysis of its financial performance requires an understanding of the factors underlying that performance and short-term patterns and long-term trends may be obscured by the impact of certain items. For this reason, the company has included information in this press release relating to constant currency revenue and net revenue changes, which are adjusted to exclude the impact of currency fluctuations between comparable periods. The company also has referred to operating expenses less purchased transportation costs, and to adjusted operating expenses less purchased transportation costs, which are operating expenses less purchased transportation costs that are further adjusted to exclude severance and other costs (including a receivable impairment). The company has further referred to non-GAAP net loss attributable to UTi Worldwide Inc., which is adjusted to exclude severance and other costs (including a receivable impairment), valuation allowances on deferred tax assets, and changes in the company's normalized tax rate, as described above, and non-GAAP net loss per diluted share attributable to common shareholders. In addition, the company has referred to free cash flow, which is cash flow from operations less purchases of property, plant and equipment (net of proceeds from disposals), as well as purchases of software and other intangible assets. Finally, the company has referred to earnings before interest, taxes, depreciation and amortization (EBITDA), and to adjusted EBITDA, which is EBITDA adjusted to exclude severance and other costs (including a receivable impairment). This information is among the information the company uses as a basis for evaluating company performance on a comparable basis over time, allocating resources and planning and forecasting of future periods. The company has also provided this information because such adjustments make performance information more comparable to prior disclosures for investors, and may enhance the ability of investors to analyze the company's performance. In addition, the company's management believes that presenting adjusted EBITDA provides useful information to investors regarding underlying business trends and performance of the company's ongoing operations. This information is not intended to be considered in isolation or as a substitute for, or superior to, the relevant measures prepared and presented in accordance with U.S. GAAP. Further, adjusted EBITDA does not represent cash flow from operations as defined by GAAP, is not derived in accordance with GAAP, and should not be considered as an alternative to net income. For more information on these non-GAAP financial measures, please see the tables at the end of this press release.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release which address activities, events or developments that UTi expects or anticipates will or may occur in the future, including such things as the third quarter marking a turning point in a number of areas; the Company completing its previously announced incremental $45 million run rate cost savings target by the end of its fiscal year 2015; the fact that the Company is targeting adjusted EBITDA in fiscal 2016 in the range of $190 million to $210 million; the fact that the company believes that positive free cash flow for the full 2015 fiscal year is still achievable or that incremental opportunities exist in fiscal 2016; and other such matters, are forward-looking statements. These statements are based on certain assumptions and analyses made by UTi in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as "may," "will," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue" and other similar expressions or the negative of these terms or other comparable terms. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Factors that might cause or contribute to a material difference include, but are not limited to, the risks in UTi's filings with the SEC, including those listed in Item 1A "Risk Factors" in its annual report on Form 10-K relating to the fiscal year ended January 31, 2014, and the following: UTi's ability to maintain sufficient liquidity and capital resources to fund its business; UTi's ability to complete its business transformation initiatives in the timeframe and for the costs anticipated and achieve the expected benefits; UTi's ability to generate sufficient cash to service its debts and other obligations; delays or inability to pay by UTi's customers; UTi's ability to execute its working capital plan, and to improve free cash flow; volatility with respect to global trade; global economic, political and market conditions and unrest, including those in Africa, Asia Pacific and EMENA (which is comprised of Europe, Middle East and North Africa); risks associated with UTi's ongoing business transformation initiative, which include unanticipated difficulties, delays, additional costs and expenses as well as potential billing delays; volatile fuel costs; transportation capacity, pricing dynamics and the ability of UTi to secure space on third party aircraft, ocean vessels and other modes of transportation; changes in interest and foreign exchange rates, particularly with respect to the South African rand; material interruptions in transportation services; risks of international operations; risks associated with, and the potential for penalties, fines, costs and expenses the company may incur as a result of investigations by the governments of Brazil and Singapore into the international air freight and air cargo transportation industry; risks of adverse legal judgments or other liabilities not limited by contract or covered by insurance, including but not limited to the ongoing securities class action lawsuit; UTi's ability to retain clients while facing increased competition; the financial condition of UTi's clients; disruptions caused by epidemics, natural disasters, conflicts, strikes, wars and terrorism; the impact of changes in UTi's effective tax rates; the other risks and uncertainties described herein and in UTi's other filings with the SEC; and other factors outside UTi's control. All forward-looking statements set forth in this press release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on UTi or its business or operations. Forward-looking statements set forth in this press release speak only as of the date hereof and UTi does not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except as required by law.

UTi Worldwide Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
         
  Three months ended Nine months ended
  October 31, October 31,
  2014 2013 2014 2013
  (Unaudited) (Unaudited)
         
Revenues:        
Airfreight forwarding  $ 319,057  $ 342,447  $ 955,407  $ 1,021,396
Ocean freight forwarding  264,265  334,622  807,758  957,087
Customs brokerage  55,854  37,948  162,680  100,074
Contract logistics  199,142  190,699  583,833  557,758
Distribution  164,604  157,301  470,561  450,257
Other  75,357  91,389  234,274  277,905
Total revenues  1,078,279  1,154,406  3,214,513  3,364,477
         
Other operating expenses:        
Purchased transportation costs:        
Airfreight forwarding  250,968  263,162  737,700  788,560
Ocean freight forwarding  216,302  279,388  666,875  801,711
Customs brokerage  9,965  7,317  32,912  12,691
Contract logistics  50,436  44,858  142,498  135,272
Distribution  114,436  110,096  328,871  314,308
Other  55,154  56,092  150,511  157,059
         
Staff costs  218,105  221,075  668,151  665,567
Depreciation  14,207  13,628  42,235  39,766
Amortization of intangible assets  7,398  5,730  21,417  11,276
Severance and other  23,674  13,184  25,964  19,033
Other operating expenses  139,843  132,630  415,746  397,936
Total other operating expenses  1,100,488  1,147,160  3,232,880  3,343,179
Operating (loss)/income  (22,209)  7,246  (18,367)  21,298
Interest expense, net  (10,557)  (4,923)  (29,220)  (11,663)
Loss on debt extinguishment  --   --   (21,820)  -- 
Other expense, net  (205)  (294)  (1,201)  (1,256)
Pretax (loss)/income  (32,971)  2,029  (70,608)  8,379
Provision for income taxes  2,293  9,334  21,573  30,054
Net loss  (35,264)  (7,305)  (92,181)  (21,675)
Net (loss)/income attributable to non-controlling interests  (1,269)  1,770  1,940  4,262
         
Net loss attributable to UTi Worldwide Inc.  $ (33,995)  $ (9,075)  $ (94,121)  $ (25,937)
         
Basic and diluted loss per common share attributable to UTi Worldwide Inc. common shareholders  $ (0.35)  $ (0.09)  $ (0.97)  $ (0.25)
         
Number of weighted average common shares outstanding used for per share calculations        
Basic and diluted shares  105,438,911  104,746,663  105,257,604  104,450,366
     
UTi Worldwide Inc.    
Condensed Consolidated Balance Sheets    
(in thousands)    
     
  October 31, 2014 January 31, 2014
  (Unaudited) (Audited)
     
ASSETS    
Cash and cash equivalents  $ 191,869  $ 204,384
Cash held as collateral  32,801  -- 
Trade receivables, net  1,080,406  977,885
Deferred income taxes  10,116  8,889
Other current assets  157,024  154,465
Total current assets  1,472,216  1,345,623
     
Property, plant and equipment, net  207,696  222,036
Goodwill and other intangible assets, net  447,419  464,867
Investments  1,034  1,075
Deferred income taxes  13,112  11,693
Other non-current assets  50,189  36,768
Total assets  $ 2,191,666  $ 2,082,062
     
LIABILITIES & EQUITY    
Bank lines of credit  $ 83,109  $ 260,700
Short-term borrowings  10,037  7,551
Current portion of long-term borrowings  1,776  3,488
Current portion of capital lease obligations  11,994  12,374
Trade payables and other accrued liabilities  752,274  754,965
Income taxes payable  19,742  17,877
Deferred income taxes  3,348  3,236
Total current liabilities  882,280  1,060,191
     
Long-term borrowings, excluding current portion  366,297  205,862
Capital lease obligations, excluding current portion  61,104  60,784
Deferred income taxes  14,700  14,390
Other non-current liabilities  36,744  38,098
     
Convertible preference shares  178,732  -- 
     
Commitments and contingencies    
     
UTi Worldwide Inc. shareholders' equity:    
Common stock  572,204  517,762
Retained earnings  211,624  313,974
Accumulated other comprehensive loss  (147,057)  (143,317)
Total UTi Worldwide Inc. shareholders' equity  636,771  688,419
Non-controlling interests  15,038  14,318
Total equity  651,809  702,737
Total liabilities and equity  $ 2,191,666  $ 2,082,062
     
UTi Worldwide Inc.    
Condensed Consolidated Statements of Cash Flows    
(in thousands)    
     
  Nine months ended October 31,
  2014 2013
  (Unaudited)
     
OPERATING ACTIVITIES:    
Net loss  $ (92,181)  $ (21,675)
Adjustments to reconcile net loss to net cash used in operating activities:    
Share-based compensation costs  10,365  9,782
Depreciation  42,235  39,766
Amortization of intangible assets  21,417  11,276
Amortization of debt issuance costs  2,805  524
Make-whole payment  20,830  -- 
Accretion of convertible senior notes  5,290  -- 
Deferred income taxes  (2,615)  7,102
Uncertain tax positions  792  (4)
Gain on disposal of property, plant and equipment  (522)  (548)
Provision for doubtful accounts  4,328  4,220
Proceeds from the sale of trade receivables  --   20,211
Installment receivable impairment and other  20,449  3,375
Net changes in operating assets and liabilities  (138,790)  (142,891)
Net cash used in operating activities  (105,597)  (68,862)
     
INVESTING ACTIVITIES:    
Net increase in cash held as collateral  (32,801)  -- 
Purchases of property, plant and equipment, excluding software  (20,989)  (36,545)
Proceeds from disposals of property, plant and equipment  4,058  3,583
Purchases of software and other intangible assets  (9,845)  (27,484)
Net increase in other non-current assets  (560)  (3,292)
Net cash used in investing activities  (60,137)  (63,738)
     
FINANCING ACTIVITIES:    
Net (repayments)/borrowings under bank lines of credit  (175,830) 98,970
Net increase in short-term borrowings  2,472  1,031
Proceeds from issuances of long-term borrowings  404,644  639
Repayments of long-term borrowings  (203,517)  (5,514)
Make-whole payment  (20,830)  -- 
Proceeds from the issuance of preference shares  175,000  -- 
Debt and preferred shares issuance costs  (25,789)  -- 
Repayments of capital lease obligations  (10,770)  (10,168)
Distributions to non-controlling interests and other  (1,416)  (2,180)
Ordinary shares settled under share-based compensation plans  (1,807)  (2,487)
Proceeds from issuance of ordinary shares  89  3,345
Dividends paid  --   (6,282)
Net cash provided by financing activities  142,246  77,354
     
Effect of foreign exchange rate changes on cash and cash equivalents  10,973  (10,810)
Net decrease in cash and cash equivalents  (12,515)  (66,056)
     
Cash and cash equivalents at beginning of period  204,384  237,276
     
Cash and cash equivalents at end of period  $ 191,869  $ 171,220
         
UTi Worldwide Inc.        
Segment Reporting        
(in thousands)        
(Unaudited)        
         
  Three months ended October 31, 2014
 
Freight
Forwarding
Contract
Logistics and
Distribution


Corporate


Total
         
Revenues  $ 689,807  $ 388,472  $ --   $ 1,078,279
         
Purchased transportation costs  523,942  173,319  --   697,261
Staff costs  104,492  104,442  9,171  218,105
Depreciation  4,245  8,546  1,416  14,207
Amortization of intangible assets  6,472  926  --   7,398
Severance and other  22,139  1,318  217  23,674
Other operating expenses  47,842  82,076  9,925  139,843
Total operating expenses  709,132  370,627  20,729  1,100,488
Operating (loss)/income  $ (19,325)  $ 17,845  $ (20,729)  (22,209)
Interest expense, net        (10,557)
Other expense, net        (205)
Pretax loss        (32,971)
Provision for income taxes        2,293
Net loss        (35,264)
Net loss attributable to non-controlling interests        (1,269)
Net loss attributable to UTi Worldwide Inc.        $ (33,995)
         
         
  Three months ended October 31, 2013
 
Freight
Forwarding
Contract
Logistics and
Distribution


Corporate


Total
         
Revenues  $ 778,446  $ 375,960  $ --   $ 1,154,406
         
Purchased transportation costs  596,663  164,250  --   760,913
Staff costs  108,985  103,582  8,508  221,075
Depreciation  4,269  7,994  1,365  13,628
Amortization of intangible assets  4,404  1,205  121  5,730
Severance and other  6,083  7,004  97  13,184
Other operating expenses  44,390  79,485  8,755  132,630
Total operating expenses  764,794  363,520  18,846  1,147,160
Operating income/(loss)  $ 13,652  $ 12,440  $ (18,846)  7,246
Interest expense, net        (4,923)
Other expense, net        (294)
Pretax income        2,029
Provision for income taxes        9,334
Net loss        (7,305)
Net income attributable to non-controlling interests        1,770
Net loss attributable to UTi Worldwide Inc.        $ (9,075)
   
   
  Nine months ended October 31, 2014
 
Freight
Forwarding
Contract
Logistics and
Distribution


Corporate


Total
         
Revenues  $ 2,081,720  $ 1,132,793  $ --   $ 3,214,513
         
Purchased transportation costs  1,559,265  500,102  --   2,059,367
Staff costs  327,642  312,365  28,144  668,151
Depreciation  13,071  24,890  4,274  42,235
Amortization of intangible assets  18,586  2,831  --   21,417
Severance and other  23,649  1,578  737  25,964
Other operating expenses  144,419  243,677  27,650  415,746
Total operating expenses  2,086,632  1,085,443  60,805  3,232,880
Operating (loss)/income  $ (4,912)  $ 47,350  $ (60,805)  (18,367)
Interest expense, net        (29,220)
Loss on debt extinguishment        (21,820)
Other expense, net        (1,201)
Pretax loss        (70,608)
Provision for income taxes        21,573
Net loss        (92,181)
Net income attributable to non-controlling interests        1,940
Net loss attributable to UTi Worldwide Inc.        $ (94,121)
         
         
  Nine months ended October 31, 2013
 
Freight
Forwarding
Contract
Logistics and
Distribution


Corporate


Total
         
Revenues  $ 2,266,765  $ 1,097,712  $ --   $ 3,364,477
         
Purchased transportation costs  1,732,000  477,601  --   2,209,601
Staff costs  322,856  314,999  27,712  665,567
Depreciation  12,491  23,356  3,919  39,766
Amortization of intangible assets  6,645  3,648  983  11,276
Severance and other  8,512  8,313  2,208  19,033
Other operating expenses  136,969  237,205  23,762  397,936
Total operating expenses  2,219,473  1,065,122  58,584  3,343,179
Operating income/(loss)  $ 47,292  $ 32,590  $ (58,584)  21,298
Interest expense, net        (11,663)
Other expense, net        (1,256)
Pretax income        8,379
Provision for income taxes        30,054
Net loss        (21,675)
Net income attributable to non-controlling interests        4,262
Net loss attributable to UTi Worldwide Inc.        $ (25,937)
             
UTi Worldwide Inc.
Geographic Reporting
(in thousands)
(Unaudited)
           
             
  Three months ended October 31, 2014
 
Freight
Forwarding
Revenues
Contract
Logistics and
Distribution
Revenues

Freight
Forwarding
Net Revenues
Contract
Logistics and
Distribution
Net Revenues


Operating
(Loss)/Income


Severance and
Other
EMENA  $ 211,773  $ 58,244  $ 50,971  $ 33,623  $ (8,612)  $ 1,628
Americas  126,763  223,994  38,444  100,247  (3,681)  2,043
Asia Pacific  275,278  23,133  53,423  14,802  13,736  163
Africa  75,993  83,101  23,027  66,481  (2,923)  19,623
Corporate  --   --   --   --   (20,729)  217
Total  $ 689,807  $ 388,472  $ 165,865  $ 215,153  $ (22,209)  $ 23,674
             
             
  Three months ended October 31, 2013
 
Freight
Forwarding
Revenues
Contract
Logistics and
Distribution
Revenues

Freight
Forwarding
Net Revenues
Contract
Logistics and
Distribution 
Net Revenues


Operating
(Loss)/Income


Severance and
Other
EMENA  $ 220,317  $ 58,031  $ 57,698  $ 33,883  $ (6,682)  $ 4,855
Americas  164,113  206,693  47,938  90,803  3,854  2,627
Asia Pacific  262,281  22,567  50,957  15,791  15,374  1,431
Africa  131,735  88,669  25,190  71,233  13,546  4,174
Corporate  --   --   --   --   (18,846)  97
Total  $ 778,446  $ 375,960  $ 181,783  $ 211,710  $ 7,246  $ 13,184
   
   
  Nine months ended October 31, 2014
 
Freight
Forwarding
Revenues
Contract
Logistics and
Distribution
Revenues

Freight
Forwarding
Net Revenues
Contract
Logistics and
Distribution
Net Revenues


Operating
(Loss)/Income


Severance and
Other
EMENA  $ 650,254  $ 176,747  $ 170,345  $ 102,533  $ (14,858)  $ 2,194
Americas  406,235  644,337  124,766  288,431  (7,583)  2,747
Asia Pacific  790,440  64,907  161,145  42,333  41,580  620
Africa  234,791  246,802  66,199  199,394  23,299  19,666
Corporate  --   --   --   --   (60,805)  737
Total  $ 2,081,720  $ 1,132,793  $ 522,455  $ 632,691  $ (18,367)  $ 25,964
             
             
  Nine months ended October 31, 2013
 
Freight
Forwarding
Revenues
Contract
Logistics and
Distribution
Revenues

Freight
Forwarding
Net Revenues
Contract
Logistics and
Distribution
Net Revenues


Operating
(Loss)/Income


Severance and
Other
EMENA  $ 648,940  $ 167,898  $ 174,721  $ 98,641  $ (10,088)  $ 6,774
Americas  519,652  600,134  140,404  264,668  8,837  3,520
Asia Pacific  745,549  61,413  146,528  41,272  39,016  2,035
Africa  352,624  268,267  73,112  215,530  42,117  4,496
Corporate  --   --   --   --   (58,584)  2,208
Total  $ 2,266,765  $ 1,097,712  $ 534,765  $ 620,111  $ 21,298  $ 19,033
 
UTi Worldwide Inc. Supplemental Financial Information – Reconciliation to US GAAP
(in thousands, except per share amounts)
(Unaudited)
     
  Three months ended
October 31, 2014
Three months ended
October 31, 2013
GAAP Revenues  $ 1,078,279  $ 1,154,406
Less: Purchased transportation costs  (697,261)  (760,913)
Net revenues  $ 381,018  $ 393,493
     
GAAP Operating expenses  $ 1,100,488  $ 1,147,160
Less: Purchased transportation costs  (697,261)  (760,913)
Operating expenses less purchased transportation costs  403,227  386,247
Less: Adjustment for severance and other(1)  (23,674)  (13,184)
Non-GAAP Operating expenses  $ 379,553  $ 373,063
     
GAAP Operating (loss)/income  $ (22,209)  $ 7,246
Add: Adjustment for severance and other(1)  23,674  13,184
Non-GAAP Operating income  $ 1,465  $ 20,430
     
Non-GAAP operating income as a percentage of net revenues 0.4% 5.2%
     
GAAP Pretax (loss)/income  $ (32,971)  $ 2,029
Add: Adjustment for severance and other(1)  23,674  13,184
Non-GAAP Pretax (loss)/income  $ (9,297)  $ 15,213
     
GAAP Provision for income taxes  $ 2,293  $ 9,334
Add: Adjustment for severance and other(2)  1,463  1,220
Less: Adjustment for deferred tax asset valuation allowance(3)  (7,010)  (5,229)
Non-GAAP (Benefit)/provision for income taxes  $ (3,254)  $ 5,325
     
GAAP Net loss attributable to UTi Worldwide Inc.  $ (33,995)  $ (9,075)
Adjustment for:    
Severance and other(1)  23,674  13,184
Income tax effect severance and other(2)  (1,463)  (1,220)
Deferred tax asset valuation allowance(3)  7,010  5,229
Non-GAAP Net loss attributable to UTi Worldwide Inc.  $ (4,774)  $ 8,118
     
GAAP Diluted loss per common share  $ (0.35)  $ (0.09)
Adjustment for:    
Severance and other(1)  0.22  0.13
Income tax effect severance and other(2)  (0.01)  (0.01)
Deferred tax asset valuation allowance(3)  0.06  0.05
Non-GAAP Diluted (loss)/earnings per common share  $ (0.08)  $ 0.08
     
(1) During the three months ended October 31, 2014 and 2013, the company recorded pre-tax severance and facility exit costs of $4,080 and $13,184, respectively, primarily related to transformation activities. Included in severance and other the company incurred an impairment charge of $19,594 during the three months ended October 31, 2014, in connection with an impairment of the South African Installment Receivable Agreement and other receivables.    
(2) The provision for income tax adjustment related to the severance and other costs was calculated based on the prevailing tax rate in each jurisdiction.    
(3) The company recorded additional tax expense exceeding its normalized tax rates. This is due to valuation allowances and the mix of taxable income across the company's tax jurisdictions. The company's estimated normalized tax rate was 35%, for the three months ended October 31, 2014, and 2013. This rate is estimated based upon historical average effective tax rates experienced by the company for the periods FY10 through FY12 during which the company had consistent profitability. These rates are dependent upon many factors including but not limited to the mix of income and loss generated across jurisdictions and enacted statutory tax rates.    
     
  Nine months ended
October 31, 2014
Nine months ended
October 31, 2013
GAAP Revenues  $ 3,214,513  $ 3,364,477
Less: Purchased transportation costs  (2,059,367)  (2,209,601)
Net revenues  $ 1,155,146  $ 1,154,876
     
GAAP Operating expenses  $ 3,232,880  $ 3,343,179
Less: Purchased transportation costs  (2,059,367)  (2,209,601)
Operating expenses less purchased transportation costs  1,173,513  1,133,578
Less: Adjustment for severance and other(4)  (25,964)  (19,033)
Non-GAAP Operating expenses  $ 1,147,549  $ 1,114,545
     
GAAP Operating (loss)/income  $ (18,367)  $ 21,298
Add: Adjustment for severance and other(4)  25,964  19,033
Non-GAAP Operating income  $ 7,597  $ 40,331
     
Non-GAAP operating income as a percentage of net revenues 0.7% 3.5%
     
GAAP Pretax (loss)/income  $ (70,608)  $ 8,379
Add: Adjustment for severance and other(4)  25,964  19,033
Add: Adjustment for loss on debt extinguishment(5)  21,820  -- 
Non-GAAP Pretax (loss)/income  $ (22,824)  $ 27,412
     
GAAP Provision for income taxes  $ 21,573  $ 30,054
Add: Adjustment for severance and other(6)  1,820  1,582
Less: Adjustment for deferred tax asset valuation allowance(7)(8)  (31,381)  (22,042)
Non-GAAP (Benefit)/provision for income taxes  $ (7,988)  $ 9,594
     
GAAP Net loss attributable to UTi Worldwide Inc.  $ (94,121)  $ (25,937)
Adjustment for:    
Severance and other(4)  25,964  19,033
Income tax effect severance and other(5)  (1,820)  (1,582)
Loss on debt extinguishment(6)  21,820  -- 
Deferred tax asset valuation allowance(7)(8)  31,381  22,042
Non-GAAP Net (loss)/income attributable to UTi Worldwide Inc.  $ (16,776)  $ 13,556
     
GAAP Diluted loss per common share  $ (0.97)  $ (0.25)
Adjustment for:    
Severance and other(4)  0.25  0.18
Income tax effect severance and other(5)  (0.02)  (0.02)
Loss on debt extinguishment(6)  0.21  -- 
Deferred tax asset valuation allowance(7)(8)  0.29  0.22
Non-GAAP Diluted (loss)/earnings per common share  $ (0.24)  $ 0.13
     
(4) During the nine months ended October 31, 2014 and 2013, the company recorded pre-tax severance and facility exit costs of $6,370 and $19,033, respectively, primarily related to transformation activities. Included in severance and other the company incurred an impairment charge of $19,594 for the nine months ended October 31, 2014, in connection with an impairment of the South African Installment Receivable Agreement and other receivables.    
(5) The provision for income tax adjustment related to the severance and other costs was calculated based on the prevailing tax rate in each jurisdiction.    
(6) Loss on debt extinguishment for the nine months ended October 31, 2014, includes a make-whole payment   of $20,830 with respect to the prepayment of the company's $200,000 aggregate principal amount of private placement notes issued on January 25, 2013, as well as a non-cash charge of $990 related to unamortized debt issuance costs.    
(7) Adjustments for deferred tax asset valuation allowances include the effects of current period valuation allowances. For the nine months ended October 31, 2013, there was an adjustment that included an out of period adjustment to income tax expense of $6,098 to increase the valuation allowances for certain of its deferred tax assets.    
(8) The company recorded additional tax expense exceeding its normalized tax rates. This is due to valuation allowances and the mix of taxable income across the company's tax jurisdictions. The company's estimated normalized tax rate was 35%, for the nine months ended October 31, 2014, and 2013. This rate is estimated based upon historical average effective tax rates experienced by the company for the periods FY10 through FY12 during which the company had consistent profitability. These rates are dependent upon many factors including but not limited to the mix of income and loss generated across jurisdictions and enacted statutory tax rates.    
 
UTi Worldwide Inc.
Constant Currency Reconciliation
(Unaudited)
           
Set forth below is a reconciliation of the company's constant currency rates and the growth rates based on the company's GAAP reported results in the company's revenues, net revenues and operating expenses less purchased transportation costs for the three and nine months ended October 31, 2014. Constant currency is a non-GAAP measure that excludes the impact of foreign currency translation.
           
  Three months ended
October 31, 2014
 
Total Net
Change

+/(--)
Currency Impact

Constant
Currency
+/(--)
Non-GAAP
Items(9)
Adjusted
Constant
Currency
Revenues  (7)%  3%  (4)%  --%   (4)%
Net revenues  (3)%  3%  --%  --%   --%
Operating expenses less          
purchased transportation costs  4%  4%  8%  (3)%  5%
           
  Nine months ended
October 31, 2014
 
Total Net
Change

+/(--)
Currency Impact

Constant
Currency
+/(--)
Non-GAAP
Items(10)
Adjusted
Constant
Currency
Revenues  (4)%  2%  (2)%  --%  (2)%
Net revenues  --%  3%  3%  --%  3%
Operating expenses less           
purchased transportation costs  4%  3%  7%  (1)%  6%
           
(9) During the three months ended October 31, 2014 and 2013, the company recorded pre-tax severance and facility exit costs of $4,080 and $13,184, respectively, primarily related to transformation activities. Included in severance and other the company incurred an impairment charge of $19,594 during the three months ended October 31, 2014, in connection with an impairment of the South African Installment Receivable Agreement and other receivables.
(10) During the nine months ended October 31, 2014 and 2013, the company recorded pre-tax severance and facility exit costs of $6,370 and $19,033, respectively, primarily related to transformation activities. Included in severance and other the company incurred an impairment charge of $19,594 for the nine months ended October 31, 2014, in connection with an impairment of the South African Installment Receivable Agreement and other receivables.
         
UTi Worldwide Inc.
EBITDA and Adjusted EBITDA Calculation
(in thousands)
(Unaudited)
       
         
  Three months ended Nine months ended
  October 31, October 31,
  2014 2013 2014 2013
EBITDA:        
Net loss  $ (35,264)  $ (7,305)  $ (92,181)  $ (21,675)
Provision for income taxes  2,293  9,334  21,573  30,054
Interest expense, net  10,557  4,923  29,220  11,663
Other expense, net  205  294  1,201  1,256
Depreciation  14,207  13,628  42,235  39,766
Amortization of intangible assets  7,398  5,730  21,417  11,276
Total EBITDA before adjusting items  (604)  26,604  23,465  72,340
         
Adjusting items:        
Loss on debt extinguishment(11)  --   --   21,820  -- 
Severance and other(12)(13)  23,674  13,184  25,964  19,033
Adjusted EBITDA  $ 23,070  $ 39,788  $ 71,249  $ 91,373
         
         
(11) Loss on debt extinguishment for the nine months ended October 31, 2014, includes a make-whole payment of $20,830 with respect to the prepayment of the company's $200,000 aggregate principal amount of private placement notes issued on January 25, 2013, as well as a non-cash charge of $990 related to unamortized debt issuance costs.
(12) During the three months ended October 31, 2014 and 2013, the company recorded pre-tax severance and other exit costs of $4,080 and $13,184, respectively, primarily related to transformation activities. Included in severance and other the company incurred an impairment charge of $19,594 during the three months ended October 31, 2014, in connection with an impairment of the South African Installment Receivable Agreement and other receivables.
(13) During the nine months ended October 31, 2014 and 2013, the company recorded pre-tax severance and facility exit costs of $6,370 and $19,033, respectively, primarily related to transformation activities. Included in severance and other the company incurred an impairment charge of $19,594 for the nine months ended October 31, 2014, in connection with an impairment of the South African Installment Receivable Agreement and other receivables.
         
UTi Worldwide Inc.
Free Cash Flow Calculation
(in thousands)
(Unaudited)
       
         
  Three months ended Nine months ended
  October 31, October 31,
  2014 2013 2014 2013
Net cash provided by/(used in) operating activities  $ 19,490  $ (22,199)  $ (105,597)  $ (68,862)
Purchases of property, plant and equipment, excluding software  (8,748)  (10,213)  (20,989)  (36,545)
Proceeds from disposals of property, plant and equipment  1,670  1,699  4,058  3,583
Purchases of software and other intangible assets  (3,917)  (9,097)  (9,845)  (27,484)
Free cash flow  $ 8,495  $ (39,810)  $ (132,373)  $ (129,308)
         
UTi Worldwide Inc.
Basic and Diluted GAAP and Non-GAAP Calculation
(in thousands)
(Unaudited)
       
         
  Three months ended Nine months ended
  October 31, October 31,
  2014 2013 2014 2013
Basic and Diluted EPS Calculation        
Net loss attributable to UTi Worldwide Inc.  $ (33,995)  $ (9,075)  $ (94,121)  $ (25,937)
Less: Dividends paid-in kind on Convertible Preference Shares  (3,169)  --   (8,229)  -- 
Loss attributable to UTi Worldwide Inc. common shareholders for calculation of basic and diluted earnings per share  (37,164)  (9,075)  (102,350)  (25,937)
         
Number of weighted average common shares outstanding used for per share calculations        
Basic and diluted shares  105,438,911  104,746,663  105,257,604  104,450,366
         
Basic and diluted loss per common share attributable to UTi Worldwide Inc. common shareholders  $ (0.35)  $ (0.09)  $ (0.97)  $ (0.25)
         
         
Non-GAAP Basic and Diluted EPS Calculation        
Non-GAAP Net (loss)/income attributable to UTi Worldwide Inc.  $ (4,774)  $ 8,118  $ (16,776)  $ 13,556
Less: Dividends paid-in kind on Convertible Preference Shares  (3,169)  --   (8,229)  -- 
Non-GAAP (Loss)/income attributable to UTi Worldwide Inc. common shareholders for calculation of basic and diluted (loss)/earnings per share  (7,943)  8,118  (25,005)  13,556
         
Number of weighted average common shares outstanding used for per share calculations        
Basic and diluted shares  105,438,911  104,746,663  105,257,604  104,450,366
         
Non-GAAP Basic and diluted (loss)/earnings per common share attributable to UTi Worldwide Inc. common shareholders  $ (0.08)  $ 0.08  $ (0.24)  $ 0.13


            

Coordonnées