World Fuel Services Corporation Reports Solid Second Quarter Results

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World Fuel Services Corporation Reports Solid Second Quarter Results

Quarterly Volume Surpassed 4 Billion Gallons for the First Time

MIAMI--(BUSINESS WIRE)-- World Fuel Services Corporation (NYS: INT) , a leading global 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 $51.0 million or $0.71 diluted earnings per share compared to $48.6 million or $0.68 diluted earnings per share in the second quarter of 2012. Non-GAAP net income and diluted earnings per share for the second quarter, which exclude share-based compensation and amortization of acquired intangible assets, were $57.5 million and $0.80, respectively, compared to $52.8 million and $0.74 in 2012.


"Our second quarter results once again demonstrate the resilience and diversity of our business model. We are pleased with our overall performance especially in our marine segment," said Michael J. Kasbar, President and Chief Executive Officer of World Fuel Services Corporation. "We are confident that we will continue to capitalize on our unique business model in this ever changing marketplace."

The company's aviation segment generated gross profit of $76.0 million, a decrease of $1 million or 1% sequentially, but an increase of $6.9 million or 10% year-over-year. The company's marine segment generated gross profit of $52.3 million, an increase of $10.6 million or 26% sequentially and $600 thousand or 1% year-over-year. The company's land segment posted gross profit of $60.1 million, a decrease of $3.6 million or 6% sequentially, but an increase of $8.9 million or 17% year-over-year.

"We continue to generate positive operating cash flow, with the total amount generated over the past twelve months exceeding $335 million," said Ira M. Birns, Executive Vice President and Chief Financial Officer. "While many of the markets we serve remain challenging, our profitability and cash flow generation are strong, providing us with opportunities to fund both organic growth activities and strategic investments."

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 within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our expectations of opportunities for growth and strategic investments, our ability to capitalize on our business model in a changing marketplace, as well as our expectation about our profitability and liquidity. These forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosures contained in the company's Securities and Exchange Commission ("SEC") filings, including the company's Annual Report on Form 10-K filed with the SEC on February 21, 2013. Actual results may differ materially from any forward-looking statements due to risks and uncertainties, including, but not limited to: our ability to effectively integrate and derive benefits from acquired businesses, our ability to capitalize on new market opportunities, potential liabilities and the extent of any insurance coverage, the impact of quarterly fluctuations in results, the creditworthiness of our 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 and suppliers operate, our failure to effectively hedge certain financial risks associated with the use of derivatives, non-performance by counterparties or customers on derivatives contracts, loss of, or reduced sales, to a significant government customer, uninsured losses, the impact of natural disasters, adverse results in legal disputes, unanticipated tax liabilities, our ability to retain and attract senior management and other key employees and other risks detailed from time to time in the company's SEC filings. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, changes in expectations, future events, or otherwise.

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 8,000 locations in more than 200 countries and territories worldwide.

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 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. The company also offers transaction management services which consist of card payment solutions and merchant processing services to customers in the aviation, marine and land transportation industries. 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,
 2013   2012  2013   2012 
 
 
Revenue$10,479,604$9,618,797$20,663,633$19,097,852
Cost of revenue 10,291,146  9,446,674  20,292,796  18,768,494 
 
Gross profit 188,458  172,123  370,837  329,358 
 
Operating expenses:
Compensation and employee benefits72,74556,183142,174110,710
Provision for bad debt2,7096413,812782
General and administrative 44,268  42,941  89,174  86,252 
 
Total operating expenses 119,722  99,765  235,160  197,744 
 
Income from operations68,73672,358135,677131,614
Non-operating expenses, net (4,771) (5,525) (8,310) (9,620)
 
Income before income taxes63,96566,833127,367121,994
Provision for income taxes 11,608  11,951  23,899  18,566 
 
Net income including noncontrolling interest52,35754,882103,468103,428
Net income attributable to noncontrolling interest 1,341  6,282  3,727  8,413 
 
Net income attributable to World Fuel$51,016 $48,600 $99,741 $95,015 
 
Basic earnings per common share$0.71 $0.68 $1.40 $1.34 
 
Basic weighted average common shares 71,516  71,173  71,483  71,083 
 
Diluted earnings per common share$0.71 $0.68 $1.38 $1.32 
 
Diluted weighted average common shares 72,018  71,767  72,099  71,773 
 

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED - IN THOUSANDS)
 
    As of
June 30, December 31,
20132012
 
Assets:
Current assets:
Cash and cash equivalents$232,480$172,740
Accounts receivable, net2,587,9772,193,866
Inventories551,333572,313
Prepaid expenses and other current assets 312,333 342,458
 
Total current assets3,684,1233,281,377
 
Property and equipment, net136,851112,525
 
Goodwill, identifiable intangible and other non-current assets 708,164 713,849
 
Total assets$4,529,138$4,107,751
 
Liabilities and equity:
Liabilities:
Current liabilities:
Short-term debt$28,709$26,065
Accounts payable2,210,5251,814,794
Accrued expenses and other current liabilities 265,342 308,439
 
Total current liabilities2,504,5762,149,298
 
Long-term debt322,642354,253
Other long-term liabilities 69,642 62,576
Total liabilities 2,896,860 2,566,127
 
Equity:
World Fuel shareholders' equity1,606,9961,517,174
Noncontrolling interest equity 25,282 24,450
Total equity 1,632,278 1,541,624
 
Total liabilities and equity$4,529,138$4,107,751
 

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,
2013 20122013 2012
 
Cash flows from operating activities:
Net income including noncontrolling interest$ 52,357$ 54,882$ 103,468$ 103,428
Adjustments to reconcile net income including
noncontrolling interest to net cash provided by
(used in) operating activities:
Depreciation and amortization11,4398,00922,28717,668
Provision for bad debt2,7096413,812782
Share-based payment award compensation costs4,3253,0538,1975,957
Other197(9,794)(49)(1,023)
Changes in cash collateral with financial counterparties(1,286)(163,152)(723)(128,058)
Changes in assets and liabilities, net of acquisitions(44,679)646(2,420)(55,677)
Total adjustments(27,295)(160,597)31,104(160,351)
Net cash provided by (used in) operating activities25,062(105,715)134,572(56,923)
 
Cash flows from investing activities:
Acquisitions and other investments, net of cash acquired(7,697)(28,948)(7,697)(29,038)
Capital expenditures(11,695)(5,619)(24,644)(9,567)
Purchase of short-term investments(21,588)-(21,588)-
Proceeds from the sale of short-term investments21,588-21,588-
Other-115--
Net cash used in investing activities(19,392)(34,452)(32,341)(38,605)
 
Cash flows from financing activities:
Borrowings (repayments) of debt, net74,44639,085(29,205)37,593
Dividends paid on common stock Read Full Story

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