NEW YORK (TheStreet) -- UTi Worldwide (UTIW - Get Report) was plunging 23.95% to $11.60 Wednesday after the global supply chain management solutions company announced a refinancing plan and issued guidance well below analysts' expectations.
The company announced it had breached some debt covenants and would need to raise approximately $525 million to pay off a minimum debt of $400 million that could come due in April. UTi said it would issue $350 million in senior notes due 2019 in a private offering. and also plans to raise $175 million through the issuing of convertible preferred shares to its largest shareholder, P2 Capital Partners. This would raise P2's stake in the company to 18.1% from 10.76%, according to Thomson Reuters.
Furthermore, UTi forecast a loss of 33 to 38 cents a share and revenue of $1.05 billion to $1.1 billion for the fourth quarter ended Jan. 31. Analysts expected a profit of 6 cents a share on revenue of $1.13 billion, according to Thomson Reuters.
- Net operating cash flow has increased to -$22.20 million or 48.49% when compared to the same quarter last year. In addition, UTI WORLDWIDE INC has also vastly surpassed the industry average cash flow growth rate of -79.65%.
- UTIW, with its decline in revenue, slightly underperformed the industry average of 4.6%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Air Freight & Logistics industry and the overall market, UTI WORLDWIDE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for UTI WORLDWIDE INC is currently lower than what is desirable, coming in at 34.09%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.78% trails that of the industry average.
- You can view the full analysis from the report here: UTIW Ratings Report