World Fuel Services Corporation Reports Fourth Quarter and Full Year Earnings

World Fuel Services Corporation Reports Fourth Quarter and Full Year Earnings

Generated Operating Cash Flow of $98 Million in the Fourth Quarter and $146 Million for the Full Year

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 full year net income of $189.3 million or $2.64 diluted earnings per share. Excluding one-time expenses of $4.5 million related to the acquisition of select assets of Multi Service Corporation ("Multi Service"), net income was $192.3 million or $2.68 diluted earnings per share. This compares to $194.0 million or $2.71 diluted earnings per share for the same period in 2011. Non-GAAP net income and diluted earnings per share for the full year, excluding share-based compensation, amortization of acquired intangible assets and expenses related to the Multi Service acquisition, were $215.9 million and $3.01, respectively, compared to $221.1 million and $3.09 in 2011.


For the fourth quarter, net income was $42.8 million or $0.60 diluted earnings per share. Excluding expenses related to the Multi Service acquisition, net income was $45.8 million or $0.64 diluted earnings per share. This compares to $50.1 million or $0.70 diluted earnings per share in the fourth quarter of 2011. Non-GAAP net income and diluted earnings per share for the fourth quarter, excluding share-based compensation, amortization of acquired intangible assets and expenses related to the Multi Service acquisition, were $52.3 million and $0.73, respectively, compared to $57.4 million and $0.81 in the fourth quarter of 2011.

"In 2012, despite a stagnant market, we posted record revenue, gross profit, and volume while completing two strategic acquisitions," stated Michael J. Kasbar, president and chief executive officer of World Fuel Services Corporation. "Multi Service enhances our comprehensive solutions offering and opens up new opportunities for growth and value creation."

For the full year, the company's marine segment generated gross profit of $208.0 million, an increase of approximately $12.9 million or 7 percent year-over-year. The company's aviation segment generated gross profit of $294.6 million, a decrease of $11.5 million or 4 percent year-over-year. The company's land segment posted gross profit of $170.8 million, an increase of $37.0 million or 28 percent year-over-year.

"The two accretive and strategic acquisitions we completed this past year will further expand the value proposition we offer to our customers and suppliers and provide new avenues for growth," said Ira M. Birns, executive vice president and chief financial officer. "Our operating cash flow contributed to our very strong and liquid balance sheet enabling us to further fuel organic growth as well as make additional 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, amortization of acquired intangible assets and one-time expenses related to the acquisition of select assets of Multi Service, 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 value creation, as well as our expectation about our value proposition. 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 filings, including the company's Annual Report on Form 10-K. 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, 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 Securities and Exchange Commission 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 Year ended

December 31,

December 31,

2012

2011

2012

2011

Revenue

$

9,935,813

$

9,323,947

$

38,945,338

$

34,622,854

Cost of revenue

9,772,476

9,161,661

38,271,891

33,987,851

Gross profit

163,337

162,286

673,447

635,003

Operating expenses:

Compensation and employee benefits

60,809

56,114

237,362

215,275

Provision for bad debt

377

1,424

4,790

8,173

General and administrative

47,790

40,329

174,272

154,583

Total operating expenses

108,976

97,867

416,424

378,031

Income from operations

54,361

64,419

257,023

256,972

Non-operating expenses, net

(4,341

)

(4,501

)

(17,428

)

(18,769

)

Income before income taxes

50,020

59,918

239,595

238,203

Provision for income taxes

4,995

6,888

38,244

39,001

Net income including noncontrolling interest

45,025

53,030

201,351

199,202

Net income attributable to noncontrolling interest

2,189

2,968

12,006

5,173

Net income attributable to World Fuel

$

42,836

$

50,062

$

189,345

$

194,029

Basic earnings per common share

$

0.60

$

0.70

$

2.66

$

2.74

Basic weighted average common shares

71,232

71,036

71,154

70,687

Diluted earnings per common share

$

0.60

$

0.70

$

2.64

$

2.71

Diluted weighted average common shares

71,906

71,772

71,817

71,510

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED - IN THOUSANDS)

As of

December 31,

December 31,

2012

2011

Assets:

Current assets:

Cash and cash equivalents

$

172,740

$

205,415

Accounts receivable, net

2,193,866

2,160,561

Inventories

572,313

472,584

Prepaid expenses and other current assets

342,458

283,667

Total current assets

3,281,377

3,122,227

Property and equipment, net

112,525

90,710

Goodwill, identifiable intangible and non-current other assets

713,849

484,309

Total assets

$

4,107,751

$

3,697,246

Liabilities and equity:

Liabilities:

Current liabilities:

Short-term debt

$

26,065

$

17,800

Accounts payable

1,814,794

1,739,678

Accrued expenses and other current liabilities

308,439

268,664

Total current liabilities

2,149,298

2,026,142

Long-term debt

354,253

269,348

Other long-term liabilities

62,576

55,038

Total liabilities

2,566,127

2,350,528

Equity:

World Fuel shareholders' equity

1,517,174

1,332,961

Noncontrolling interest equity

24,450

13,757

Total equity

1,541,624

1,346,718

Total liabilities and equity

$

4,107,751

$

3,697,246

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED - IN THOUSANDS)

For the Three Months ended

For the Year ended

December 31,

December 31,

2012

2011

2012

2011

Cash flows from operating activities:

Net income including noncontrolling interest

$

45,025

$

53,030

$

201,351

$

199,202

Adjustments to reconcile net income including

noncontrolling interest to net cash provided by (used in)

operating activities:

Depreciation and amortization

9,914

11,419

36,714

40,530

Provision for bad debt

377

1,424

4,790

8,173

Share-based payment award compensation costs

3,738

2,842

14,079

11,041

Other

292

(501

)

(7,193

)

(3,276

)

Change in cash collateral deposits held by financial counterparties

(18,000

)

5,252

(11,059

)

4,957

Changes in assets and liabilities, net of acquisitions

56,174

861

(92,891

)

(403,163

)

Total adjustments

52,495

21,297

(55,560

)

(341,738

)

Net cash provided by (used in) operating activities

97,520

74,327

145,791

(142,536

)

Cash flows from investing activities:

Acquisition of businesses, net of cash acquired

(146,445

)

(10,387